Judge Holly J. Fujie, Case Number: 24STCV03068, Date: 2024-10-08 Tentative Ruling

This is an action arising out of an employment relationship. On February 6, 2024, Plaintiff filed this action against Defendant alleging causes of action for (1) Pregnancy Discrimination; (2) Disability Discrimination; (3) Interference with Pregnancy Disability Leave; (4) Failure to Accommodate; (5) Failure to Engage in the Interactive Process; (6) Retaliation in violation of FEHA; (7) Nonpayment of Wages – Lab. Code, §§ 1194, 1197; (8) Nonpayment of Overtime Compensation – Lab. Code, § 1194; (9) Premium Pay for Rest Period Violations – Lab. Code, § 226.7; (10) Premium Pay for Meal Period Violations – Lab. Code, §§ 226.7, 512(a); (11) Itemized Wage Statements Violation – Lab. Code, § 226; (12) Retaliation – Lab. Code, §§ 98.6, 1102.5; (13) Waiting Time Penalty for Nonpayment of Wages – Lab. Code, §§ 203, 218; and (14) Violation of Labor Code section 226 and 1198.5.

On July 8, 2024, Defendant filed a Motion to Compel Arbitration (the “Motion”), seeking to compel Plaintiff’s claims to arbitration and to stay the action pending completion of the arbitration. On September 24, 2024, Plaintiff filed an opposition, and Defendant filed a reply on October 1, 2024.

“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, 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.” (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967; Code Civ. Proc., § 1281.2.) Similarly, “under the FAA, the strong federal policy favoring arbitration agreements requires courts to resolve any doubts concerning arbitrability in favor of arbitration.” (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 176 (internal quotations omitted).)

In deciding a petition to compel arbitration, trial courts must decide first whether an enforceable arbitration agreement exists between the parties, and then determine the second gateway issue 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, T–Mobile here, 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.”].)

Procedurally, a petition to compel arbitration or stay proceedings must state verbatim the provisions providing for arbitration, or must have a copy of them attached. (Cal. R. Ct., rule 3.1330.)

In determining the enforceability of an arbitration agreement, the court considers “two ‘gateway issues’ of arbitrability: (1) whether there was an agreement to arbitrate between the parties, and (2) whether the agreement covered the dispute at issue.” (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)

In California, “defendants may meet their initial burden to show an agreement to arbitrate by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature . . . in compliance with the requirements of [CCP] section 1281.2 and California Rules of Court, rule 3.1330.” (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060; see also, Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160 [“With respect to the moving party’s burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court.”]

Here, Defendant has met its initial burden of showing that an arbitration agreement exists. Defendant submits evidence that on February 14, 2022, Plaintiff signed a “Mutual Agreement to Arbitrate Claims” (the “Agreement”) as a part of the onboarding process at Defendant. (Declaration of Brittany Martin in Support of Motion (“Martin Decl.,”), ¶ 9, Exh. 1.) The Agreement stated in relevant part:

The Company and Employee mutually consent to the resolution by arbitration of all claims (“Claims”), pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by applicable law, whether or not arising out of Employee’s employment (or its termination), that the Company may have against Employee or that Employee may have against the Company (including its officers, directors, members, managers, supervisors, employees, affiliates, parent companies or subsidiaries, in their capacity as such or otherwise).

The Agreement then identifies examples of claims subject to arbitration, including causes

of action arising out of or in connection with the employment relationship and/or the termination of that relationship,” “wage claims,” “benefit claims,” and “discrimination claims” under “Title VII” and “California Government Code Section 12940, et seq.” (Id.)

Because Defendants established the existence of a valid and binding arbitration agreement, the burden shifts to Plaintiff to show why the Agreement should not be enforced.

In opposition, Plaintiff does not dispute that she signed the Agreement or that the Agreement covers the claims asserted in the Complaint. Plaintiff contends, however, that the Agreement is unenforceable because it is unconscionable.

Regardless of the claim asserted, arbitration agreements are only enforceable if they are not unconscionable. (Armendariz, supra, 24 Cal.4th at 113; Baxter v. Genworth N. Am. Corp., (2017) 16 Cal.App.5th 713, 721.) “Both procedural and substantive unconscionability must be present for a court to refuse to enforce a contract, although they need not be present in the same degree.” (Baxter, supra, 16 Cal.App.5th at 721 (citing Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1243.) Procedural unconscionability focuses on (1) “oppression” resulting from unequal bargaining power that adheres the weaker party to nonnegotiable terms and (2) “surprise” involving “the extent to which the supposedly agreed-upon terms are hidden in a prolix printed form drafted by the party seeking to enforce them.” (Flores v. Transamerica HomeFirst, Inc., (2001) 93 Cal.App.4th 846, 853.) Substantive unconscionability “focuses on overly harsh or one-sided results [that lack substantial justification].” (Baxter, supra, 16 Cal.App.5th at 724; Armendariz, supra, 24 Cal.4th at 117-18.)

As initial matter, the Court notes that far from being a hidden arbitration provision, the Agreement is a standalone five-page document entitled “MUTUAL AGREEMENT TO ARBITRATE CLAIMS,” highlighting for Plaintiff that she was signing an arbitration agreement and that by signing the Agreement, Plaintiff agreed to arbitrate all arbitrable claims. (Martin Decl., Exh. 1 (emphasis in original).)

Plaintiff’s argument on procedural unconscionability mainly revolves around the circumstances under which she signed the Agreement. Specifically, Plaintiff states that “[w]hile in the hyperbaric chamber, [she] used [her] cellular phone to log into the provided link and review the documents… the only device available to [her] to review the documents was [her] mobile phone. However, [her] cellular phone did not allow [her] to properly review each document, and [she] did not have access to any alternative methods for viewing the documents in their entirety.” (Declaration of Jasmyne Perkins, ¶ 11.) Plaintiff further declares that she was not informed that the documents included an arbitration agreement, nor did she realize that she was signing one. (Id., ¶ 13.)

Plaintiff has not presented any facts, however, to show that she was required to complete all her onboarding documents immediately and sign them right then and there. Although Plaintiff claims to have felt a subjective sense of urgency to sign the documents, no such requirement can be gleaned from the email that was sent to her. (Id., Exh. 1.) “Ordinarily, one 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.” (Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 153, 160.) Thus, Plaintiff’s signature on the agreement manifests an assent to its terms. When a person with the capacity to read and understand an instrument, signs it, he may not, in the absence of fraud, coercion or excusable neglect, avoid its terms on the ground he failed to read it before signing it. (Bauer v. Jackson (1971) 15 Ca1.App.3d 358, 370; Cayanan v. Citi Holdings, Inc. (2013) 928 F.Supp.2d 1182.) Plaintiff, therefore, cannot pass the blame on Defendant for her failure to read the Agreement prior to signing. “A party cannot use his own lack of diligence to avoid an arbitration agreement.” (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215.)

Moreover, the Agreement contained an opt-out provision allowing her to revoke her consent to the Agreement within three days after signing it, under the heading “Right to Withdraw Consent”, stating thus: “Employee shall have three (3) days from the date of execution of this Agreement to withdraw their consent to arbitration by notifying the Company in writing that the employee intends to reject new or ongoing employment.” (Martin Decl., Exh. 1.) Plaintiff, however, did not timely exercise her right to withdraw her consent to arbitration. (Id., ¶ 10.)

Plaintiff also raises the argument that the Agreement incorporated by reference JAMS Rules and Procedures without attaching them, making it procedurally unconscionable. Plaintiff, however, could “access the JAMS Rules from the onboarding system” or by clicking on the live hyperlink in the Agreement itself. (Id., ¶¶ 12, 9, Exh. 1.) Further, failure to attach the JAMS arbitration rules does not in and of itself support a finding of unconscionability absent assertions about the unconscionability of the arbitration rules themselves. (Baltazar v. Forever 21 Inc. (2016) 62 Cal.4th 1237, 1246.) Here, Plaintiff does not challenge any of the underlying JAMS arbitration rules as unconscionable, rendering this argument insufficient to establish procedural unconscionability of the Agreement.

Accordingly, Plaintiff has not sufficiently demonstrated procedural unconscionability and must “make a strong showing of substantive unconscionability to render the arbitration provision unenforceable.” (Gatton, supra, 152 Cal.App.4th at 586.)

Plaintiff’s only argument concerning substantive unconscionability pertains to the confidentiality provision in the Agreement, which states: “The Parties agree that any arbitration complaint, information exchanged by the parties in an arbitration proceeding, any correspondence to or from any arbitrator, and/or any award are highly confidential, and the Parties agree not to disclose such information to any person or entity for any reason…” (Martin Decl., Exh. 1.) As Plaintiff herself acknowledges, a confidentiality provision in an arbitration agreement is not per se unconscionable, as long as it is not overly broad. (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1250.) Here, the confidentiality provision prohibited only four types of disclosures—the arbitration complaint, information exchanged by the parties in an arbitration proceeding, any correspondence to or from any arbitrator, and the arbitration award. (Martin Decl., Exh. 1.) Plaintiff’s assertion that “the arbitration agreement’s confidentiality provision effectively prevents Plaintiff from contacting witnesses disclosed in discovery. As such, the provision prevents Plaintiff from preparing and presenting her case” is not accurate. (Opposition, p. 10.) Thus, Plaintiff has also failed to demonstrate any substantive unconscionability.

In sum, the Court finds that Plaintiff failed to meet her burden of establishing that the arbitration provisions are unenforceable as unconscionable.

Accordingly, the Motion is GRANTED. Plaintiff’s claims are stayed pending completion of arbitration. The Court sets a Status Conference for April 7, 2025, regarding the status of arbitration.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court