Judge: Joel L. Lofton, Case: 23AHCV01677, Date: 2024-01-25 Tentative Ruling
Case Number: 23AHCV01677 Hearing Date: January 25, 2024 Dept: X
Tentative Ruling
Judge Joel L. Lofton,
Department X
HEARING DATE: January 25, 2024 TRIAL
DATE: No date set.
CASE: OMAR GUERRA, an
individual, v. VOLT INFORMATION SCIENCES, INC., a New York Corporation; Clary
Corporation, a California Corporation; ART KNAPP, an individual; RICHARD
ESCOFFERY, an individual; PANKAJ GOEL, an individual; JOHN P. CLARY, an
individual; HUGH L. CLARY, an individual; DONALD G. ASH, an individual; and
DOES 1 through 80 inclusive.
CASE NO.: 23AHCV01677
MOTION
TO COMPEL ARBITRATION
MOVING PARTY: Volt Information Sciences, Inc.
RESPONDING PARTY: Plaintiff
Omar Guerra
SERVICE: Filed December 29, 2023
OPPOSITION: Filed January 11, 2024
REPLY: Filed January 18, 2024
RELIEF
REQUESTED
Volt moves to compel Plaintiff to
submit this claim to binding arbitration.
BACKGROUND
This case arises out of Plaintiff
Omar Guerra’s (“Plaintiff”) claim that he was unlawfully discriminated against
and wrongfully terminated during his employment with Volt information,
Sciences, Inc. (“Volt”), an employment agency. Plaintiff filed this complaint
on July 24, 2023, alleging ten causes of action for (1) failure to provide
Covid pay, (2) waiting time penalties, (3) disability discrimination, (4)
retaliation, (5) failure to prevent discrimination and retaliation, (6) retaliation,
(7) failure to provide reasonable accommodation, (8) failure to engage in good
faith interactive process, (9) unfair and unlawful business practices, and (10)
wrongful termination.
TENTATIVE RULING
Volt’s motion to compel arbitration
is GRANTED.
This motion
is ordered STAYED pursuant to Code of Civil Procedure section 1281.4.
LEGAL STANDARD
“California
and federal law both favor enforcement of valid arbitration agreements.” (Aanderud
v. Superior Court (2017) 13 Cal.App.5th 880, 889.) “A party who files
a motion to compel arbitration ‘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.’’ (Cisnero Alverez v. Altamed
Health Services Corporation (2021) 60 Cal.App.5th 572, 580.)
DISCUSSION
Existence of a Valid Agreement To
Arbitrate
The arbitration provision at issue provides, in part: “I understand and
agree that both Volt and I waive our respective rights to trial by jury in
connection with any claims covered by this agreement to arbitrate. Instead, any
disputes arising out of or related to my employment with and/or termination
from Volt, my assignment with any Volt Client and/or end of such assignment,
including privacy claims shall be settled by final and binding arbitration
pursuant to the Federal Arbitration Act.” (Baker Decl. ¶ 6. Exhibit A.) The agreement also provides
that “any issues pertaining to the enforceability, application or validity of
this agreement to arbitrate shall be decided only by a court of competent
jurisdiction and not by an arbitrator.” (Ibid.)
The party moving to compel
arbitration “bears the burden of producing ‘prima facie evidence of a written
agreement to arbitrate the controversy.’ ” (Gamboa v. Northeast Community
Clinic (2021) 72 Cal.App.5th 158, 165 (“Gamboa”).) The moving party
“can meet its initial burden by attaching to the petition a copy of the
arbitration agreement purporting to bear the respondent's signature.” (Bannister
v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543-44.) “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,
supra, 72 Cal.App.5th at p. 165.)
In support
of its motion, Volt includes pages 20 and 21 of an employee guide, which
include the agreement to arbitrate and Plaintiff’s printed and digitally signed
name. (Baker Decl. ¶ 6, Exhibit A.) In opposition,
Plaintiff states that he does not recall signing the agreement or anyone
explaining the agreement to him. (Guerra Decl. ¶ 3.)
“Under Civil Code section 1633.7 . . . an electronic
signature has the same legal effect as a handwritten signature”. (Ruiz v.
Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 843.) “An electronic
record or electronic signature is attributable to a person if it was the act of
the person. The act of the person may be shown in any manner, including a
showing of the efficacy of any security procedure applied to determine the
person to which the electronic record or electronic signature was
attributable.” (Civ. Code section 1633.9, subd. (a).)
“If a party
confronted with his or her handwritten signature on an arbitration agreement is
unable to allege that the signature is inauthentic or forged, the fact that
that person does not recall signing the agreement neither creates a factual
dispute as to the signature's authenticity nor affords an independent basis to
find that a contract was not formed.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 845.) The Court
also noted that the plaintiffs had declared that they had signed the large
stack of documents. (Id. at p. 846.) “It is hornbook law that failing to
read an agreement before signing it does not prevent formation of a contract.”
(Ibid.)
Here,
Plaintiff does not challenge the authenticity of the signature on the agreement
but merely contends he does not recall signing in. Volt, however, argues that
their systems support the authenticity of Plaintiff’s signature. Volt provides
that Plaintiff was hired on or about October 8, 2007, and provides that its
employees are required to review and sign documents throughout their employment
on Bullhorn, Volt’s employee portal. (Id. ¶ 5.) Volt provides that employees access
Bullhorn through their unique username and password, which are not shared with
Volt. (Id. ¶ 6.) Employees use Bullhorn to review and electronically
sign documents, including the employee guide attached. (Ibid.) Volt has
met its prima facie burden of establishing the existence a valid agreement to
arbitrate.
Whether the
FAA Applies
The next issue is whether the FAA
applies to the present case.
The
FAA applies “applies
when a contract involves interstate commerce.” (Nixon v. AmeriHome Mortgage
Company, LLC (2021) 67 Cal.App.5th 934, 945.) “The party seeking to enforce
the arbitration agreement also bears the burden of establishing the FAA applies
and preempts otherwise governing provisions of state law or the parties’
agreement.” (Id. at p. 946.) “ ‘[T]he phrase “ ‘involving commerce’ ” in
the FAA is the functional equivalent of the term “ ‘affecting commerce,’ ”
which is a term of art that ordinarily signals the broadest permissible
exercise of Congress's commerce clause power.’ ” (Carbajal v. CWPSC, Inc.
(2016) 245 Cal.App.4th 227, 238.)
Volt
provides staffing services to clients nationwide. (Baker Decl. ¶ 4.) Further, the agreement provides that disputes
covered by the arbitration agreement will be settled “pursuant to the Federal
Arbitration Act.” The FAA applies in the present case.
Unconscionability
Plaintiff argues
that the agreement should not be enforced based on unconscionability.
“ ‘[U]nconscionability has both a
“procedural” and a “substantive” element,’ the former focusing on ‘oppression’
or ‘surprise’ due to unequal bargaining power, the latter on “overly harsh” or
“one-sided” results. [citation.] ‘The prevailing view is that [procedural and
substantive unconscionability] must both be present in order for a court to
exercise its discretion to refuse to enforce a contract or clause under the
doctrine of unconscionability.’ ” (Armendariz v. Foundation Health Psychare
Services, Inc. (2000) 24 Cal.4th 83, 114.)
“Procedural unconscionability
‘addresses the circumstances of contract negotiation and formation, focusing on
oppression or surprise due to unequal bargaining power.’ ” (Carbajal v.
CWPSC, Inc., supra, 245 Cal.App.4th at p. 243.)
Plaintiff argues that the agreement
is procedurally unconscionable because it was contract of adhesion and because
Volt failed to attach the applicable arbitration rules.
“ ‘It is well settled that adhesion
contracts in the employment context, that is, those contracts offered to
employees on a take-it-or-leave-it basis, typically contain some aspects of
procedural unconscionability.’ ” (Id. at p. 243.) “When . . . there is
no other indication of oppression or surprise, ‘the degree of procedural
unconscionability of an adhesion agreement is low, and the agreement will be
enforceable unless the degree of substantive unconscionability is high.’ ” (Serpa
v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704.)
“ ‘ “Numerous cases have held that
the failure to provide a copy of the arbitration rules to which the employee
would be bound, supported a finding of procedural unconscionability.” ’ [Citations.]
‘[T]he failure to provide a copy of the governing rules “contributes to oppression
because the employee ‘is forced to go to another source to find out the full
import of what he or she is about to sign and must go to that effort prior to signing.” ’ ” (Carbajal v.
CWPSC, Inc. (2016) 245 Cal.App.4th 227, 244-45.)
“We agree that the failure to attach
the arbitration rules could be a factor in support of a finding of procedural
unconscionability, but disagree that the failure, by itself, is sufficient to
sustain a finding of procedural unconscionability.” (Lane v. Francis Capital
Management LLC (2014) 224 Cal.App.4th 676, 690.)
The arbitration agreement here was
related to Plaintiff’s employment with Volt. Further, the arbitration agreement
provides that the rules of the American Arbitration Association apply. (Baker
Decl. ¶ 6, Exhibit A.) Further, the
agreement provides “I understand [the rules] can be found at www.adr.org or
provided to me by Volt at my request.” (Ibid.) Here, Plaintiff does not assert that he
was unable to request or access the pertinent rules prior to signing the
agreement, thus reducing the weight of procedural unconscionability outlined in
Carabajal. However, because the contract was one of
adhesion and the rules were not attached to it, Plaintiff has demonstrated some
level of procedural unconscionability.
Plaintiff
also argues that the agreement is substantively unconscionable because it
includes a predispute waiver of Plaintiff’s right to jury trial, relying on Grafton
Partners v. Superior Court (2005) 36 Cal.4th 944.
“Substantive unconscionability pertains to the
fairness of an agreement's actual terms and to assessments of whether they are
overly harsh or one-sided.” (The McCaffrey Group, Inc. v. Superior Court (2014)
224 Cal.App.4th 1330, 1348.) “A contractual provision is not substantively
unconscionable simply because it provides one side a greater benefit.” (Carbajal,
supra, 245 Cal.App.4th at p. 248.)
Plaintiff’s
reliance on Grafton is wholly misplaced. In Grafton, supra¸36
Cal.4th at p. 955, the California Supreme Court expressly stated that “[u]nlike
predispute jury waivers, predispute arbitration agreements are specifically
authorized by statute.”
Plaintiff
also argues that the agreement attorney’s fees provision and limited discovery
establish substantive unconscionability. Plaintiff contends that the agreement
would deny him access to statutory rights of recovery. However, the agreement
provides that the arbitrator “will have the authority to award all relief in
law or equity that is requested by the parties and supported by credible,
relevant and admissible evidence.” (Baker Decl. ¶ 6, Exhibit A.) Plaintiff has failed to
demonstrate that the agreement denies him access to certain means of recovery.
Plaintiff also argues that the
agreement provides for insufficient discovery because it states that the
arbitrator shall allow “adequate discovery”. (Baker Decl. ¶ 6, Exhibit A.) “In striking the
appropriate balance between the desired simplicity of limited discovery
and an employee's statutory rights, courts assess the amount of default
discovery permitted under the arbitration agreement, the standard for obtaining
additional discovery, and whether the plaintiffs have demonstrated that the
discovery limitations will prevent them from adequately arbitrating their
statutory claims.” (Davis v. Kozak (2020) 53 Cal.App.5th 897, 910-11.) Plaintiff’s
argument would require reading the agreement’s provision for “adequate
discovery” to mean that Plaintiff will be denied adequate discovery.
Plaintiff’s argument is not supported by the plain text of the agreement.
Plaintiff
has failed to demonstrate that the agreement contains any level of substantive
unconscionably.
Third
Party Beneficiaries
Volt
argues that the Clary Defendants, including the Clary Corporation, John P.
Clary, Hugh L. Clary, and Donald G Ash, are third party-beneficiaries to the
agreement to arbitrate.
Civil Code
section 1559 provides: “A contract, made expressly for the benefit of a
third person, may be enforced by him at any time before the parties thereto
rescind it.” The California Supreme Court in Goonewardene v. ADP, LLC (2019)
6 Cal.5th 817, 830 stated that the following elements must be present for a
third-party to move forward with a claim: “(1) whether the third party would in
fact benefit from the contract, but also (2) whether a motivating purpose of
the contracting parties was to provide a benefit to the third party, and (3) whether
permitting a third party to bring its own breach of contract action against a
contracting party is consistent with the objectives of the contract and the
reasonable expectations of the contracting parties.”
However, “ ‘the “mere fact that a
contract results in benefits to a third party does not render that party a
‘third party beneficiary.’ ” ’ [Citation.] Nor does knowledge that the third
party may benefit from the contract suffice.” (Ochoa, supra, 89
Cal.App.5th at p., 1336.)
Here, the arbitration agreement
expressly provides that “I understand and agree that Volt’s employees/agents,
Volt’s clients, and their employee/agents are third-party beneficiaries to this
agreement.” (Baker Decl. ¶ 6, Exhibit A.) The Clary Defendants would benefit from this
contract and the contract designates them as third-party beneficiaries. Thus,
it makes logical sense that the agreement would apply to the Clary Defendants. Plaintiff
does not address this issue in his opposition.
CONCLUSION
Volt’s
motion to compel arbitration is GRANTED.
This motion
is ordered STAYED pursuant to Code of Civil Procedure section 1281.4.
Court
will set a status conference regarding arbitration on December 11, 2024, at
8:30
Case
Management Conference is off calendar.
Moving
party to give notice.
Dated: January 25,
2024 ___________________________________
Joel
L. Lofton
Judge
of the Superior Court
Parties who intend to submit on this tentative must send an
email to the court indicating their
intention to submit. alhdeptx@lacourt.org