Judge: George F. Bird, Jr., Case: 22CMCV00567, Date: 2023-03-16 Tentative Ruling

Case Number: 22CMCV00567    Hearing Date: March 16, 2023    Dept: B

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES – SOUTH CENTRAL DISTRICT

I.       BACKGROUND

            Plaintiff Erika Vazquez (“Plaintiff”) filed the Complaint in this action on November 18, 2022, alleging six causes of action against National Retail Transportation, Inc. (“NRT”) and Partners Personnel-Management Services, LLC (“PPMS”), erroneously sued as Partners Personnel-Management Resources, LLC (collectively “Defendants”). PPMS is alleged to be a staffing company and NRT used PPMS to hire Plaintiff. (Complaint (“Compl.”), ¶ 9.) Plaintiff alleges she was employed as a checker on or about October 1, 2021, by NRT. (Compl., ¶ 10.) In or around January of 2022, Plaintiff alleges she informed her supervisor that she was pregnant. (Compl., ¶ 11.) Plaintiff alleges that shortly after she informed her supervisor that she was pregnant, Plaintiff was transferred to another department which involved more lifting of objects than her prior position. (Compl., ¶ 12.)  Plaintiff alleges that she requested not to be transferred and raised concerns about the increased lifting due to her pregnancy, but Plaintiff was still transferred. (Ibid.) In April of 2022, Plaintiff alleges she requested an accommodation and presented a doctor’s note which included the restriction of “no lifting over 25 pounds,” to which the company responded, “this company does not accept any restrictions.” (Compl., ¶¶ 13, 14.) Plaintiff was allegedly sent home and terminated after requesting the accommodation. (Compl., ¶ 14.)

            Plaintiff now brings causes of action for (1) pregnancy discrimination, (2) failure to prevent pregnancy discrimination, (3) retaliation in violation of the Fair Employment and Housing Act, (4) failure to accommodate, (5) failure to engage in the good faith interactive process, and (6) wrongful termination in violation of public policy.

II.       MOTION TO COMPEL ARBITRATION

A.    Motion filed January 13, 2023.

            PPMS alleges that Plaintiff entered into a written arbitration agreement (the “Agreement”) when Plaintiff signed her employment paperwork. PPMS argues that the Agreement requires Plaintiff to arbitrate employment-related disputes such as the claims made here. PPMS argues that the Agreement is not unconscionable and should be enforced. Finally, PPMS argues that the Agreement may be enforced by NRT under theories of equitable estoppel and agency. PPMS seeks to have the current action dismissed or stayed.

B.     Opposition filed March 3, 2023.  

            Plaintiff argues that the Agreement is substantively and procedurally unconscionable because Plaintiff was not provided a Spanish translation of the Agreement. Plaintiff declares she informed PPMS and NRT that she was a native Spanish speaker and could not read nor write in English. (Decl. of Erika Vazquez, ¶ 3.) Plaintiff argues that NRT is not a signatory to the Agreement and thus this Court should not compel arbitration to avoid the possibility of conflicting rulings by the court and the arbitrator.

C.     Reply filed March 9, 2023.

            PPMS argues that the burden to ask for a Spanish translation of the Agreement fell onto Plaintiff and Plaintiff’s failure to read and understand the Agreement prior to signing should not prevent PPMS from enforcing the Agreement. PPMS argues that the Agreement is not unconscionable as Plaintiff had the opportunity to read, understand, and challenge the Agreement but Plaintiff failed to do so. PPMS also argues that the terms of the Agreement are fair. Finally, PPMS argues that NRT may enforce the Agreement as a third-party beneficiary.

III.       LEGAL STANDARDS

            “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists…” unless one of the grounds listed in Code of Civil Procedure section 1281.2 exist for not enforcing the agreement to arbitrate. (Code Civ. Proc., § 1281.2.) To bring a motion to compel arbitration the moving party has the burden to plead and prove (1) the parties have a written agreement to arbitrate the controversy, (2) a request or demand was made by one party to the other party or parties for arbitration of such controversy pursuant to and under the terms of their written arbitration agreement, and (3) the refusal of the other party or parties to arbitrate such controversy. (Sky Sports, Inc. v. Superior Court (2011) 201 Cal.App.4th 1363, 1368 [134 Cal.Rptr.3d 405, 409].)

            A written arbitration agreement is “valid, enforceable and irrevocable” unless grounds for revocation of any contract exist. (Code Civ. Proc., § 1281.) The court shall order the parties to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists unless grounds exist for rescission of the agreement. (Code Civ. Proc., § 1281.2, subd. (b).) If the court orders arbitration, the court shall stay the action or proceeding. (Code Civ. Proc., § 1281.4.) 

            If the parties specifically contract to designate that the FAA controls the arbitration agreement, then the FAA governs rather than state procedural law. (Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1115.) However, state law is applicable to determine which contracts are binding under Section 2 and enforceable under Section 3. (Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 630-631.)

IV.       DISCUSSION

A.    Validity of the Agreement.

Plaintiff does not contest that she did sign the Agreement presented by PPMS. Rather, Plaintiff argues that Plaintiff did not understand the Agreement, did not intend to agree to arbitrate the disputes, and signed the Agreement without knowing what it said because the Agreement was only presented in English while Plaintiff could only read Spanish. Plaintiff argues that there was a lack of mutual consent to the Agreement and that PPMS cannot enforce a contract that was not validly formed.

Defendant argues that the Agreement was validly formed as the burden was on Plaintiff to read and understand the terms of the Agreement and that the Agreement cannot now be undone simply because Plaintiff is unhappy with the terms. Yesenia Zacarias, a Recruiting Specialist for PPMS, declares that employees are given as much time as they need to review the onboarding packet which includes the Agreement and that an employee may request the Agreement in Spanish. (Decl. of Yesenia Zacarias, ¶ 2.) Yesenia Zacarias declares that Plaintiff did not ask any questions about the agreement nor did Plaintiff request the agreement in Spanish. (Id. at ¶ 4.)

The Court of Appeal has stated “Generally, a party may not avoid enforcement of an arbitration provision because the party has limited proficiency in the English language. If  a party does not speak or understand English sufficiently to comprehend a contract in English, it is incumbent upon the party to have it read or explained to him or her.” (Caballero v. Premier Care Simi Valley LLC (2021) 69 Cal.App.5th 512, 518–519 [284 Cal.Rptr.3d 560, 565, 69 Cal.App.5th 512, 518–519].)

In Caballero, the Court of Appeal reversed the trial court’s denial of a motion to compel arbitration. (Id. at 520.) The plaintiff argued that there was no mutual assent to an arbitration agreement between himself and the defendant because plaintiff could not read English and did not understand the rights he was waiving. (Id. at 518.) The Court of Appeal stated that mutual assent was determined by the objective standard of the outward manifestations of the parties. (Ibid.) The plaintiff had signed the arbitration agreement in two places and the Court of Appeal relied on the theory that “[O]ne who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it. If he cannot read, he should have it read or explained to him.” (Internal quotations omitted.) (Ibid.)

Here, the outward manifestations of Plaintiff demonstrate that she signed the Agreement without asking any questions or requesting a Spanish version of the Agreement. If Plaintiff could not read the agreement, it was incumbent upon her, just as it was the responsibility of the plaintiff in Caballero, to have the Agreement read or explained to her. Plaintiff does not present any evidence that Plaintiff was tricked prevented from understanding the terms of the Agreement. The allegation that Plaintiff was “required to simply click through the pre-employment document and quickly sign each one” does not demonstrate how PPMS enforced such requirements or influenced Plaintiff. (Decl. of Erika Vazquez, ¶ 6.)

Plaintiff does allege that she informed PPMS that she could not read or speak English, but this statement does not demonstrate when Plaintiff informed PPMS of this fact and does not overcome the outward manifestations of assent to the Agreement. (Decl. of Erika Vazquez, ¶ 3.) It was incumbent upon Plaintiff to seek help if she could not understand the agreement before signing. Plaintiff fails to plead any facts that demonstrate PPMS exerted pressure on Plaintiff to sign the documents quickly or prevented Plaintiff from seeking help to understand the documents. Yesenia Zacarias declares that employees were given all the time they needed to read and understand the employment packet which included the Agreement. (Decl. of Yesenia Zacarias, ¶ 2.) Plaintiff could have requested a Spanish version of the Agreement from PPMS or taken the Agreement to another translator, but Plaintiff seemingly failed to seek a translation and instead signed the Agreement.

The final sentence of the Agreement just above the signature line states, “I HAVE READ, UNDERSTAND, AND AGREE TO THE FOREGOING.” (Id. at Exhibit A.) By signing, Plaintiff represented to PPMS that she had read and understood the Agreement. PPMS was justified in relying on this representation since Plaintiff did not inform PPMS that she could not read the Agreement nor did Plaintiff ask any questions about the content of the Agreement. This Court finds that there was mutual assent in the outward manifestations of both parties and a valid arbitration agreement exists between the parties.

B.     Unconscionability.

An arbitration agreement may be unenforceable if the agreement is found to be unconscionable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113 [99 Cal.Rptr.2d 745, 766, 6 P.3d 669, 689].) To find an agreement unconscionable, the court must find both procedural and substantive unconscionability. (Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267, 1280–1281 [16 Cal.Rptr.3d 296, 305–306].) Though both types of unconscionability must be present, they do not need to be present in equal amounts. The Supreme Court of California expressed that procedural and substantive unconscionability work as a sliding scale, so “the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v. Foundation Health Psychcare Services, Inc., supra.,  24 Cal.4th at p. 114.)

C.     Procedural unconscionability.

            Procedural unconscionability focuses on the oppression or surprise due to unequal bargaining power between the parties generally demonstrated by a contract of adhesion which is “imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it. [Citations.]” (Internal quotations omitted.) (Nyulassy v. Lockheed Martin Corp., supra., 120 Cal.App.4th at pp. 1280–1281.)

            Plaintiff argues that the agreement is one of adhesion because it was drafted and presented by PPMS, the staffing agency, who had the superior bargaining power over Plaintiff, the employee. Plaintiff also argues that there was significant oppression and surprise because the agreement was only in English and Plaintiff could not read English. PPMS argues that it was Plaintiff’s responsibility to understand the Agreement before signing and that Plaintiff cannot now claim surprise or oppression when Plaintiff failed to ask any questions about the Agreement, failed to seek a translation, and fails to demonstrate facts showing PPMS tricked or deceived Plaintiff to obtain her consent to the Agreement.

            Courts have recognized that employment arbitration agreements are typically adhesion contracts, and that further analysis of the surrounding circumstances determines the level of procedural unconscionability. (Cisneros Alvarez v. Altamed Health Services Corporation (2021) 60 Cal.App.5th 572, 590–591 [274 Cal.Rptr.3d 802, 817, 60 Cal.App.5th 572, 590–591], as modified (Mar. 4, 2021).) “The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party's review of the proposed contract was aided by an attorney.” (Ibid.)

            Here, Plaintiff was allegedly given as much time as needed to consider the employment documents. (Decl. of Yesenia Zacarias, ¶ 2.) While Plaintiff declares that some pressure existed to click through the documents and sign them quickly, Plaintiff does not demonstrate how PPMS exerted any pressure on Plaintiff. (Decl. of Erika Vazquez, ¶ 6.) Plainitff does not argue that any agent of PPMS tricked or pressured Plaintiff to sign the Agreement. The Agreement is a stand-alone agreement from the other employment agreements, four pages in length, clearly labeled “MUTUAL AGREEMENT FOR INDIVIDUAL ARBITRATION,” and the paragraph just before the signature in capital type succinctly expresses that by signing the party will give up their right to trial by jury and that disputes shall be resolved by individual arbitration. (Decl. of Yesenia Zacarias, Exhibit A.) These factors weigh in favor of minimal procedural unconscionability.

             The education and experience of Plaintiff is unclear, but Plaintiff was not aided by an attorney when reviewing the Agreement and Plaintiff declares that PPMS did not advise her to seek advice from an attorney. (Decl. of Erika Vazquez, ¶ 5.)

            Based on the foregoing, the Court finds minimal procedural unconscionability. The Agreement is a traditional employment arbitration agreement written in clear, basic language and Plaintiff does not allege any deception or tricks by PPMS to obtain Plaintiff’s consent to the Agreement.

            Plaintiff argues there is additional procedural unconscionability because Defendant did not provide a copy of the American Arbitration Association’s (“AAA”) rules with the proposed arbitration agreement. The Court of Appeal in Cisneros Alvarez states “the failure to provide a copy of the arbitration rules generally raises procedural unconscionability concerns only if there is a substantively unconscionable provision in the omitted rules.” (Cisneros Alvarez v. Altamed Health Services Corporation, supra., 60 Cal.App.5th at p. 590.) Plaintiff does not argue that any of the provisions of the AAA’s rules are unconscionable. There is no added procedural unconscionability for failure to provide the AAA’s rules to Plaintiff with the Agreement.

D.    Substantive unconscionability.

            Because there is minimal procedural unconscionability presented, Plaintiff must present high substantive unconscionability to demonstrate that the Agreement is unconscionable. Substantive unconscionability determines if the terms of the agreement are so one-sided as to “shock the conscience.” (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1330, 83 Cal.Rptr.2d 348.) There is a rebuttable presumption under California law that an arbitration agreement between an employer and employee is substantively unconscionable unless an employer can demonstrate that the contract has a bilateral effect. (Ingle v. Circuit City Stores, Inc. (9th Cir. 2003) 328 F.3d 1165, 1174.)

            The California Supreme Court identified six elements of an employment arbitration agreement that demonstrate terms that are not substantively unconscionable: (1) provides for neutral arbitrators; (2) provides for more than minimal discovery; (3) provides for a written award; (4) provides for all of the types of relief that would otherwise be available in court; (5) does not require employees to bear unreasonable expenses, arbitration forum costs, or expenses they would not be required to bear if they brought their action in court; and (6) provides a “modicum of bilaterality” between employee and employer. (Armendariz v. Foundation Health Psychcare Services, Inc., supra,  24 Cal.4th at p. 102.)

            The Agreement calls for a “single neutral arbitrator.” (Decl. of Erika Vazquez, Exhibit A.) There is no substantive unconscionability in the selection of the arbitrator.

            In Armendariz, the Supreme Court of California determined that adequate discovery provisions were provided for “by incorporating by reference all the rules set forth in the CAA” which can provide for less than the full range of discovery but “they are at least entitled to discovery sufficient to adequately arbitrate their statutory claim, including access to essential documents and witnesses, as determined by the arbitrator(s).” (Armendariz v. Foundation Health Psychcare Services, Inc., supra., 24 Cal.4th at p. 105.) Here, the Agreement states “The parties shall be entitled to engage in reasonable discovery, as may be limited by the arbitrator, in the forms of requests for documents, interrogatories, requests for admission, physical and/or mental examinations and depositions, in order to obtain information to prosecute or defend the claims brought.” (Decl. of Erika Vazquez, Exhibit A.) Plaintiff is not so limited in their discovery by the agreement that they are unable to “access a fair and simple method of obtaining the necessary information to present their claim,” which is the harm contemplated by this requirement. (Armendariz v. Foundation Health Psychcare Services, Inc., supra., 24 Cal.4th at p. 104.) There is no substantive unconscionability in the discovery procedures presented in the Agreement.

            The Agreement calls for a written award by the arbitrator and the arbitrator has the power to award “any type of relief that would be available in court of competent jurisdiction.” (Decl. of Erika Vazquez, Exhibit A.) There is no substantive unconscionability in the form of judgment or available remedies in the Agreement.

            An employee who is subject to a mandatory arbitration agreement as a condition of employment cannot be made to “bear unreasonable expenses, arbitration forum costs, or expenses they would not be required to bear if they brought their action in court.” (Martinez v. Master Protection Corp. (2004) 118 Cal.App.4th 107, 115-116.) Here, the Agreement states that PPMS “will pay the arbitrator's fee and will bear all administrative charges by AAA.” (Decl. of Erika Vazquez, Exhibit A.) The Agreement does allow for an award of attorney’s fees and costs if the arbitrator finds that the claims or defenses were made without substantial justification, and this is the same standard applicable if the action was brought in court. (See Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1388 [15 Cal.Rptr.2d 53, 56].) There is no substantive unconscionability in how the Agreement allocates costs and attorney’s fees. 

            Finally, Plaintiff argues there is no mutuality or ‘modicum of bilaterality’ in the Agreement. On the face of the Agreement, PPMS is subject to the provisions in equal amount to Plaintiff. The Agreement subjects the following claims to arbitration:

“Claims the Company may have against Employee or that Employee may have against (1) the Company and its affiliated agents, officers, directors, or employees and/or (2) clients of the Company or joint employers. The claims covered by this Agreement include all disputes that the Company or Employee could otherwise pursue against each other in in (sic.) a court of competent jurisdiction….”

The Agreement does not provide PPMS with any special exceptions or force Plaintiff to arbitrate only her claims while PPMS may choose to litigate their claims. Plaintiff does not point out a single provision that is significantly more preferential to PPMS than to Plaintiff. Because the Agreement subjects claims by both parties to the same arbitration procedures, the Agreement is sufficiently mutual and a modicum of bilaterality is sufficiently demonstrated to overcome the presumption of substantive unconscionability.

            This Court finds no substantive unconscionability in the terms of the Agreement. Without a finding of both procedural unconscionability and substantive unconscionability the Agreement cannot be found unconscionable. Based on the foregoing the Agreement is not unconscionable.

E.     Enforcement of the Agreement by NRT.

PPMS seeks to send all of Plaintiff’s claims to arbitration including the claims against NRT. PPMS is a staffing agency and they placed Plaintiff at NRT. Plaintiff alleges the same causes of action against both PPMS and NRT in the Complaint. Plaintiff argues that the Agreement is only between Plaintiff and PPMS so Plaintiff cannot be compelled to arbitrate claims against NRT. Additionally, Plaintiff argues that the court should deny compelling arbitration against PPMS to protect from the possibility of inconsistent results. PPMS argues that the doctrine of equitable estoppel or agency theory allows PPMS to compel arbitration of Plaintiff’s claims against NRT.

“Under the doctrine of equitable estoppel, ‘as applied in both federal and California decisional authority, a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are “intimately founded in and intertwined” with the underlying contract obligations.’” (Felisilda v. FCA US LLC, (2020) 53 Cal.App.5th 486, 495.) The doctrine applies when the claims are “’based on the same facts and inherently inseparable’ from the arbitrable claims against signatory defendants.” (Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 786 [217 Cal.Rptr.3d 793, 795, 11 Cal.App.5th 782, 786].)

In Garcia, the Court of Appeal affirmed granting a motion to compel arbitration when an employee of a staffing company attempted to compel arbitration of the non-signatory customer of the staffing company. (Garcia v. Pexco, LLC, supra, 11 Cal.App.5th at p. 789.) The Court of Appeal applied the doctrine of equitable estoppel and determined that all the claims against both the staffing agency and the customer of the staffing agency were based on identical allegations and that any claims against the customer of the staffing agency were ultimately rooted in the employment relationship with the staffing agency. (Id. at 787.)

Here, Plaintiff’s claims are ultimately rooted in the employment relationship with PPMS. Without the relationship between PPMS and Plaintiff, Plaintiff would not have worked for NRT. Plaintiff also makes no distinction between PPMS and NRT. Just as in Garcia, the causes of action alleged against both parties are identical. Like Garcia, the causes of action are based on the same facts and are inherently inseparable. (Id. at 786.) As employment disputes between Plaintiff and PPMS are subject to arbitration, the causes of action against NRT that are rooted in the employment agreement are also subject to arbitration.

Based on the foregoing, all of Plaintiff’s claims against NRT may be subject to arbitration on a theory of equitable estoppel. As all of Plaintiff’s claims against NRT are subject to arbitration under the equitable estoppel theory, this Court need not address the agency theory presented by PPMS.

V.       CONCLUSION

             This Motion to Compel Arbitration is GRANTED. The Agreement is not unconscionable. All of Plaintiff’s claims, including claims against NRT, are subject to arbitration. This action is stayed in accordance with Code of Civil Procedure section 1281.4.

Dated: March 16, 2023                                               __________________________________

                                                                                                Judge of the Superior Court