Judge: Gail Killefer, Case: 24TRCV01282, Date: 2024-09-25 Tentative Ruling

Case Number: 24TRCV01282    Hearing Date: September 25, 2024    Dept: 37

HEARING DATE:                 Wednesday, September 25, 2024

CASE NUMBER:                   24TRCV01282

CASE NAME:                        Hadiza Jimada v. UHS of Delaware, Inc., et al.

MOVING PARTY:                 Defendants UHS of Delaware, Inc. and Del Amo Hospital, Inc.

OPPOSING PARTY:             Plaintiff Hadiza Jimada

TRIAL DATE:                        Not set.

PROOF OF SERVICE:           OK

PROCEEDING:                      Motion to Compel Arbitration

OPPOSITION:                        07 August 2024

REPLY:                                  14 August 2024

TENTATIVE:                         Defendants’ motion to compel Plaintiff’s individual PAGA claims to arbitration is granted. The action is stayed as to the representative PAGA claims pending arbitration.  The Court sets an OSC Re: Status of Arbitration for September 25, 2025, at 8:30 a.m.  Defendants to give notice.

Background

On April 15, 2024, Hadiza Jimada (“Plaintiff”) filed a Complaint under the Private Attorneys General Act (“PAGA”) against UHS Delaware, Inc.; Del Amo Hospital, Inc.; Del Amo Behavioral Health System; Del Amo Behavioral Health System of California; and Does 1 to 100.

Defendants UHS of Delaware, Inc. and Del Amo Hospital, Inc. (collectively “Defendants”) move to compel Plaintiff’s individual PAGA claims to arbitration. Plaintiff opposes the Motion. The matter is now before the court.

motion to compel arbitration

I.         Legal Standard

“California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes.¿ To further that policy, Code of Civil Procedure, section 1281.2 requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions applies.¿ Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal¿ issues.”¿ (CCP, § 1281.2; Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967.)¿ Similarly, public policy under federal law favors arbitration and the fundamental principle that arbitration is a matter of contract and that courts must place arbitration agreements on an equal footing with other contracts and enforce them according to their terms.¿ (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.)¿¿¿ 

¿¿ 

In deciding a motion or petition to compel arbitration, trial courts must first decide whether an enforceable arbitration agreement exists between the parties and then determine whether the claims are covered within the scope of the agreement.¿(Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)¿ The opposing party has the burden to establish any defense to enforcement.¿ (Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 579 [“The petitioner ... bears the burden of proving the existence of a valid arbitration agreement and the opposing party, plaintiffs here, bears the burden of proving any fact necessary to its defense.”].)¿ 

II.        Evidentiary Objections

Plaintiff objects to the Declaration of Curt Shander on the basis that the declaration lacks foundation and personal knowledge. The court overrules Objections Nos. 1 to 13 on the basis that Shander as the Assistant Director of Recruitment Operations for Defendants has personal knowledge about Defendants’ security procedures and the steps an employee must undertake to affix their electronic signature to a document. (CCP, § 1633.9.)

As to Plaintiff’s Objections Nos. 1 to 5 to the Declaration of Kim Minix, Minix was the Director of Human Resources for Defendants and has personal knowledge about the onboarding documents Plaintiff was required to sign as an employee of Defendants.  Therefore, the objections are also overruled.

III.      Request for Judicial Notice

Defendants request judicial notice of the following:

1)     Complaint filed on April 15, 2024, by Plaintiff Hadiza Jimada in the Los Angeles Superior Court, Case No. 24TRCV01282.

Defendants’ request for judicial notice is granted.

IV.       Discussion

Defendants move to compel Plaintiff’s individual PAGA claims to arbitration and stay the representative PAGA action pending arbitration completion.

A.        Existence of an Agreement to Arbitrate 

“The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination. No jury trial is available for a petition to compel arbitration.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972 [Citations Omitted].)¿ 

Defendants assert that as part of the onboarding process, Plaintiff reviewed and executed an arbitration agreement entitled Alternative Resolution for Conflicts (“ARC”) Agreement (the “ARC”). (Minix Decl., ¶ 5; Shaner Decl., ¶¶ 9, 10, Ex. A, B.) The ARC states in pertinent part:

            1. How This Agreement Applies

This Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. and evidences a transaction involving commerce. Except as it otherwise provides, this Agreement applies to any past, present or future dispute arising out of or related to Employee's application for employment, employment and/or termination of employment with DEL AMO HOSPITAL INC or one of its affiliates, subsidiaries or parent companies ("Company") and survives after the employment relationship terminates. . . .

Except as it otherwise provides, this Agreement is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before a forum other than arbitration. This Agreement requires all such disputes to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial. Such disputes include without limitation disputes arising out of or relating to interpretation or application of this Agreement.

Except as it otherwise provides, this Agreement also applies, without limitation, to disputes regarding the employment relationship, compensation, breaks and rest periods . . and state statutes, if any, addressing the same or similar subject matters, and all other state statutory and common law claims.

(Shaner Decl., Ex. B, § 1.)

The ARC also contains a PAGA-specific provision which states:

(c) There will be no right or authority for any dispute to be brought, heard or arbitrated as a private attorney general representative action ("Private Attorney General Waiver"). The Private Attorney General Waiver does not apply to any claim an Employee brings in arbitration as a private attorney general solely on the Employee’s own behalf and not on behalf of or regarding others. The Private Attorney General Waiver shall be severable from this Agreement in any case in which (1) the dispute is filed as a private attorney general action and (2) a civil court of competent jurisdiction finds the Private Attorney General Waiver is unenforceable. In such instances, the private attorney general action must be litigated in a civil court of competent jurisdiction.

(Shaner Decl., Ex. B, § 6(c).)

Defendants outline the electronic signature process, unique password requirement, and authentication of Plaintiff’s electronic signature to show that Plaintiff agreed to the terms of the ARC on March 18, 2021, at 2:08 pm. (Shaner Decl., ¶¶ 7-11, Ex. A; Minix Decl., ¶ 6.)

Furthermore, Defendants present evidence that the ARC contained an opt-out provision that gave the employee 30 days to submit a form to opt-out of arbitration, including the website where the form can be accessed. (Shaner Decl., Ex. B, § 9.)

            B.        Challenge to Authenticity of ARC

Plaintiff challenges the authenticity of the ARC because Curt Shander and Kim Minix do not have personal knowledge of the facts and circumstances pertaining to Plaintiff’s signing of the ARC. However, the authenticity of an arbitration agreement is not an initial consideration of the court until it is challenged by the opposing party.

“For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication. ‘[T]he court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists....’ (§ 1281.2) The statute does not require the petitioner to introduce the agreement into evidence. A plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.”

(Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)

“If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)

Plaintiff offers no evidence to show that she did not sign the ARC. Plaintiff asserts she was told that they had to sign all onboarding documents, but that fact alone does not make the ARC invalid. (See Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 110 [mandatory arbitration as a condition of employment is permissible so long as the arbitration does not require the employee to bear any type of expense the employee would not be required to bear if the employee were to bring the action in court].)

Furthermore, while Plaintiff states that she was “provided only with only a limited amount of time to look through had fille the onboarding documents,” Plaintiff does not state that she was prevented from reading the documents or obtaining a copy of the signed documents. Plaintiff also does not state that she was denied the opportunity to request more time to review the documents, consult with an attorney, or that she had questions about the documents that the Defendants’ agents refused to answer. Plaintiff’s failure to thoroughly read the documents she clicked through does not exempt her from being bound by the ARC. “[A] person with capacity of reading and understanding an instrument signs it, he may not, in the absence of fraud, imposition or excusable neglect, avoid its terms on the ground he failed to read it before signing it.” (Bauer v. Jackson (1971) 15 Cal.App.3d 358, 370.) Plaintiff had the capacity to enter a contract and any failure to read or learn the terms of the ARC due to her own actions is insufficient to excuse Plaintiff from being bound by its terms.

Second, Plaintiff asserts that Defendants failed to show that the electronic signature Plaintiff’s signature or the act of Plaintiff. The court disagrees. The Electronic Signatures in Global and National Commerce Act provides that electronic signatures are valid. (15 U.S.C. § 7000(a).) Similarly, the Uniform Electronic Transactions Act provides that an electronic signature has the same legal effect as a handwritten signature and the legal effect of an electronic signature may not be denied simply because of its electronic form. (CCP., §§ 1633.1, 1633.7.) Defendants have showed the electronic signature was the act of Plaintiff by providing evidence of the security precautions needed to sign the ARC—here the unique user password, personal email, and audit trail that are attributable only to the Plaintiff. (See Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 843; Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1062; see also CCP, § 1633.9.)

Based on the above, Plaintiff fails to show her electronic signature on the ARC is invalid.

            C.        The ARC is Not Unconscionable

Plaintiff asserts the ARC is unconscionable. “The burden of proving unconscionability rests upon the party asserting it.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.) A showing of unconscionability requires procedural and substantive unconscionability. Procedural unconscionability asks whether there is oppression from unequal bargaining power or surprise from buried terms.¿¿(Armendariz, supra,  24 Cal.4th at p. 114.) Substantive unconscionability asks whether there are overly harsh, one-sided terms.¿(Ibid.) Both are required to be proven to find unconscionability.¿However, there is a sliding scale; if an agreement is particularly substantively unconscionable, the petitioner need not show a large amount of procedural unconscionability, and vice versa. (Ibid.)

                        i.          Procedural Unconscionability

Plaintiff argues that the ARC is procedurally unconscionable because Plaintiff was not aware of the ARC’s existence as the documents were part of the onboarding process. As stated above, Plaintiff presents no evidence that Defendants hid or misrepresented the ARC or prevented Plaintiff from reading the ARC. Moreover, Defendants are “under no obligation to highlight the arbitration clause of its contract” or “specifically call the clause to [Plaintiff’s] attention.” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 914 [Noting that any such law would be preempted by the FAA].) Furthermore, Section 9 of the ARC provided Plaintiff with instructions on how to opt-out of the ARC. The fact that Plaintiff did not read the ARC does not mean that the ARC is procedurally unconscionable.

Plaintiff further asserts that the failure to attach arbitration rules to the ARC makes the ARC procedurally unconscionable, but courts have repeatedly held that this is insufficient to show an arbitration agreement is procedurally unconscionable. (See Peng v. First Republic Bank (2013) 219 Cal. App. 4th 1462, 1472 [“[W]e find the failure to attach the [arbitration] rules, standing alone, is insufficient grounds to support a finding of procedural unconscionability.”]; Bigler v. Harker School (2013) 213 Cal. App. 4th 727, 737 [failure to attach incorporated arbitration rules “is of minor significance” to procedural unconscionability]; Lane v. Francis Capital Mgmt. LLC (2014) 224 Cal. App. 4th 676, 691 (2014) [holding the employer’s “failure to attach a copy of the AAA rules did not render the agreement procedurally unconscionable”].)

Therefore, there is little to no showing of procedural unconscionability.

                        ii.         Substantive Unconscionability

Plaintiff asserts the ARC is substantively unconscionable because it transcends the Parties’ employment relationship as it extends to “all other state statutory and common law claims.” (Shaner Decl., Ex. B, § 1.) However, the ARC states that it applies to “all other state statutory and common law claims” that arose out of or are related to the “Employee's application for employment, employment and/or termination of employment.” (Id.)

Plaintiff offers no evidence and cites no case law supporting the interpretation that the ARC extends beyond the employment relationship. While Defendants acknowledge that the ARC applies to claims that an employee is likely to bring against an employer, such as wage and hour claims, Plaintiff fails to show that the ARC does not require arbitration for claims only an employer will likely bring against an employee. Thus, Plaintiff fails to show that there is a lack of mutuality or substantive unconscionability.

Based on the above, the court finds that Plaintiff fails to show that the ARC is unconscionable.

            D.        Plaintiff Fails to Show that the ARC Contains a Wholesale PAGA Waiver

Plaintiff asserts the ARC contains a wholesale waiver of the right to bring a PAGA action. However, the language of the PAGA provision does not support this proposition as the ARC expressly excludes arbitration of representative PAGA actions:

There will be no right or authority for any dispute to be brought, heard or arbitrated as a private attorney general representative action ("Private Attorney General Waiver").

(Shaner Decl., Ex. B, § 6(c).) Furthermore, the ARC does require arbitration of individual PAGA claims:

The Private Attorney General Waiver does not apply to any claim an Employee brings in arbitration as a private attorney general solely on the Employee’s own behalf and not on behalf of or regarding others.

(Id.)

California law holds that PAGA claims are severable from their individual and

representative components. In Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal. App. 5th 533, the Court of Appeal for the Second District found that even if an employee does not bring an individual PAGA action, the employee retains standing to bring a representative PAGA action. “[W]e hold that an employee who does not bring an individual claim against her employer may nevertheless bring a PAGA action for herself and other employees of the company.” (Ibid.) Therefore, there is no merit to Plaintiff’s assertion that the severability clause in the PAGA provision of the ARC is invalid and would not sever an invalid provision of the PAGA provision.

The express terms of the ARC and case law support the finding that the ARC only applies to representative PAGA claims and is not a wholesale invalid PAGA waiver. Therefore, the ARC is valid and the Plaintiff’s individual PAGA claims can be compelled to arbitration.

            F.        Plaintiff Fails to Show that A Stay is Not Necessary

Plaintiff asserts that even if her individual PAGA claims are compelled to arbitration, she should be able to proceed in court without a stay. The question of whether Plaintiff is an aggrieved employee who has suffered Lab. Code violations (§ 2699(c)) and has standing to pursue a PAGA claim is a question that will be answered in arbitration due to the terms of the ARC. If the arbitrator determines that Plaintiff is not an aggrieved employee, then Plaintiff has no standing to pursue a representative PAGA action. (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1123-1124.) Therefore, a stay of the representative PAGA action is necessary.

Conclusion

Defendants’ motion to compel Plaintiff’s individual PAGA claims to arbitration is granted. The

action is stayed as to the representative PAGA claims pending arbitration. The Court sets an

OSC Re: Status of Arbitration for September 25, 2025, at 8:30 a.m.  Defendants to give notice.