Judge: Gregory Keosian, Case: 21STCV06688, Date: 2022-10-12 Tentative Ruling

Case Number: 21STCV06688    Hearing Date: October 12, 2022    Dept: 61

Defendant Concord Real Estate Services, Inc.’s Motion to Compel Arbitration is GRANTED.

I.                   MOTION TO COMPEL ARBITRATION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendant Concord Real Estate Services, Inc. (Defendant) presents an offer letter electronically signed by Plaintiff on May 19, 2022, which includes an arbitration clause requiring binding arbitration of “[a]ny and all disputes arising out of or relating to this offer letter and/or the employment relationship” between Plaintiff and Defendant. (Kearns Decl. Exh. F.) As this dispute concerns Plaintiff’s employment with Defendant and the termination thereof, this arbitration agreement is facially applicable to this controversy.

Plaintiff in opposition argues that the agreement is unconscionable. “Unconscionability requires a showing of both procedural unconscionability and substantive unconscionability.” (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 795.) Arbitration contracts presented to employees on a take-it-or-leave-it basis and imposed upon employees as a condition of “necessary employment” are at least minimally procedurally unconscionable. (See Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113.) Here, Plaintiff has demonstrated that the agreement presented here was procedurally unconscionable, as it was a contract of adhesion presented to him as a condition of employment in his offer letter.

Plaintiff identifies two provisions of the agreement that he claims are substantively unconscionable. The first is the provision that the parties are entitled to “reasonable discovery, as set forth in the JAMS rules interpreted by the arbitrator.” (Kearns Decl. Exh. F.) Plaintiff claims that JAMS rules limit discovery beyond reasonable bounds, because the rules allow “(a) exchange of relevant documents, (b) identification of witnesses and (c) one deposition for each side, i.e., of the employee and of a supervisor or other decision-maker of the employer. Other discovery should be available at the arbitrator’s discretion.” (Opposition at pp. 6–7.)[1] Plaintiff also argues that the arbitration agreement is applicable to “all disputes” arising out of the employment relationship, without excepting from its coverage claims that require the filing of administrative charges or that seek public injunctive relief. (Opposition at pp. 6–10.)

These arguments are unpersuasive. As to the discovery argument, neither party is limited by the JAMS rules to a specific, limited amount of discovery. Parties are expressly required to exchange all relevant documents, and although initial depositions are limited, the arbitrator is granted the discretion to permit more depositions, without need for any heightened showing of good cause. (JAMS Employment Arbitration Rule 17; see Fitz v. NCR Corp. (2004) 118 Cal.App.4^th 702, 716 [disallowing discovery provision that limited discovery to two depositions and allowed greater discovery only upon a showing of “compelling need”].) Such discovery limitations have been upheld against unconscionability challenges. (See Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 984 [holding that arbitration provision limiting discovery was not unconscionable because arbitrator possessed discretion to allow further discovery without heightened showing of need, and court could not assume that the arbitrator would act unfairly].) Plaintiff has made no showing that discovery in this case requires greater options than that provided by the arbitration agreement.

Plaintiff’s challenge to the scope of the arbitration provision likewise fails. Although it is against public policy for an arbitration agreement to waive an employee’s right to file administrative charges or seek public injunctive relief under California’s Unfair Competition Law or the Consumer Legal Remedies Act, the cases that Plaintiff cites in his support involved arbitration agreements that expressly limited the employee’s right to do so. (See Davis v. O'Melveny & Myers (9th Cir. 2007) 485 F.3d 1066, 1082; McGill v. Citibank, N.A. (2017) 2 Cal.5^th 945, 962.) Here, there is no affirmative language limiting Plaintiff’s right to file administrative charges or to seek public injunctive relief, save the language defining the scope of arbitration to include “[a]ny and all disputes arising out of . . . the employment relationship” between the parties. (Kearns Decl. Exh. F.)

When an arbitration provision is ambiguous, we will interpret that provision, if reasonable, in a manner that renders it lawful, both because of our public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution, and because of the general principle that we interpret a contractual provision in a manner that renders it enforceable rather than void.

(Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 682.) Here, given the absence of any affirmative prohibition on Plaintiff’s right to seek injunctive relief or to bring administrative charges, there is little reason to find the clause unlawful or unconscionable. There is therefore no substantive unconscionability in the arbitration agreement.

The motion is GRANTED.