Judge: Jon R. Takasugi, Case: 22STCV17672, Date: 2022-11-02 Tentative Ruling

Case Number: 22STCV17672    Hearing Date: November 2, 2022    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ motion to compel arbitration of Plaintiff’s claim and stay the PAGA claim is GRANTED.

            On 5/27/2022, Plaintiff Reina Aguilar (Plaintiff) filed suit against the Hain Celestial Group, Inc., EmployBridge, LLC, Employbridge Holding Company, and Select, alleging: (1) wrongful termination; (2) retaliation; (3) disability discrimination; (4) failure to accommodate; (5) failure to engage in interactive process; (6) failure to take reasonable steps to prevent discrimination and retaliation; (7) failure to provide meal breaks; (8) failure to provide accurate itemized statements; (9) failure to provide accurate itemized statements; (10) failure to provide accurate itemized statements; (11) failure to reimburse expenses; (12) unlawful withholding of wages; (13) waiting time penalties; (14) California Private Attorney General Act; (15) negligence; (16) negligent infliction of emotional distress; and (17) unfair business practices.

            Now, Defendants Employbridge, LLC and Employbridge Holding Company dba Select Staffing dba Real Time Staffing Services, LLC (collectively, Defendants), joined by the Hain Celestial Group, move to compel arbitration of Plaintiff’s claim and stay the PAGA claim.

Legal Standard

Where the Court has determined that an agreement to arbitrate a controversy exists, the Court shall order the petitioner and the respondent to arbitrate the controversy …unless it determines that…  grounds exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2.) Among the grounds which can support rescission are fraud, duress, and unconscionability. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.) The Court may also decline to compel arbitration wherein there is possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., § 1281.2 (c).)

I.                   Defendants’ Burden

The party moving to compel arbitration “bears the burden of proving [the] existence [of an arbitration agreement] by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) The moving party also bears the burden of demonstrating that the claims fall within the scope of the arbitration agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)

A.    Existing Agreement

Here, Defendants submitted evidence that Plaintiff applied for employment with Real Time (a staffing agency that fills positions for businesses, including Defendant HCG.) (Sanchez Decl. ¶¶ 2, 5.) Hain develops, manufactures and distributes health and wellness products for nationwide and international distribution. (Powers Decl., ¶ 2.) Plaintiff was placed on a temporary work assignment at HCG from approximately March 11, 2020 to March 23, 2021, where she worked as a packer in HCG’s Personal Care Division. (Powers Decl., ¶ 2; Sanchez Decl., ¶ 5; Complaint ¶ 10.) Plaintiff’s job duties included supporting the assembly line with production of finished goods and packing products for distribution throughout the Country. (Powers Decl., ¶ 2.) Defendant submitted evidence that in connection with her employment application with Real Time, Plaintiff entered into a voluntary arbitration agreement (“Arbitration Agreement”), providing, in relevant part:

In the event there is any dispute between you and the Company1 relating to or arising out of the employment or the termination of your employment, whether such claims arise before or after the signing of this Agreement, which you and the Company are unable to resolve informally through direct discussion, regardless of the kind or type of dispute, you and the Company agree to submit all such claims or disputes to be resolved by final and binding arbitration, instead of going to court, in accordance with the procedural rules of the Federal Arbitration Act….

In California, discovery will be governed by section 1283.05 of the California Code of Civil Procedure. You are agreeing to this on your own accord and understand[] that said disputes may include but are not limited to claims for or under: breach of contract… wages, salary, compensation, reimbursement, penalties, wrongful termination, constructive termination…the Federal Labor Standards Act and comparable state or local laws…the Americans with Disabilities Act, and/or other federal or comparable state or local laws that prohibit discrimination, harassment or retaliation based on...physical, mental or emotional impairment, disability, medical condition… and comparable state or local laws… and state laws regarding unfair competition or unfair business practices….

Except as prohibited under applicable law, you and the Company expressly intend and agree that: (1) class action, collective action, and representative action procedures shall not be asserted, nor will they apply, in any arbitration proceeding pursuant to this Agreement; (2) neither [you] nor the Company will assert any class action, collective action, or representative action claims against each other in arbitration, in any court, or otherwise; and (3) you and the Company shall only submit your own respective, individual claims in arbitration and will not seek to represent the interests of any other person….

(Sanchez Decl., ¶¶ 4, 6-7, Exh. A.)

Defendant also submitted evidence that:

The Arbitration Agreement is contained within Real Time’s onboarding documents as part of the employment application process, and Plaintiff signed it and checked the “Accept Agreement” option electronically on March 10, 2020. (Ibid.) To complete the application and onboarding documents, and to sign the Arbitration Agreement, Plaintiff had to create an account through Real Time’s website, with her own unique username and password. (Sanchez Decl., ¶¶ 6-7.) The only way to access Plaintiff’s application and onboarding documents was by signing in using the unique username and confidential password that Plaintiff created when she began the application process. (Id. at ¶¶ 6-7, 9.) Plaintiff had the opportunity to work on her application for employment at her own convenience, including from the comfort of her own home, or anywhere else she had internet access. (Id. at ¶ 11.) If she chose to do so, Plaintiff was able to begin her application, including the onboarding documents, and resume and finalize it later, by logging back in with her own username and confidential password. (Id.) Only Plaintiff, using her unique username and confidential password, had the ability to electronically access and sign Real Time’s onboarding documents. (Id. at ¶¶ 6-7, 9, 12.) Plaintiff consented to and accepted her Arbitration Agreement by signing and checking the “Accept Agreement” option on her Arbitration Agreement, which subsequently was maintained in his personnel file in the regular course of business. (Id. at ¶¶ 6-7, 8-9, 12, Exh. A.)

In opposition, Plaintiff disputes signing the arbitration agreement. More specifically, Plaintiff argues that she did not complete the application herself. Rather, she argues that her application was completed by a supervisor named Ana:

11. I did not sign any employment application online as I do not know how to use a computer. I do not know how to sign any documents electronically. I also had my application filled out by my supervisor Ana Doe (“Ana”) so there was no need for me to fill out the application online.

12. When I applied to SELECT after HCG switched my agency from Volt to SELECT, my application was filled out by Ana in the dining room of the company. Ana would call each person individually. She would manually fill out our application. She would ask us questions and then she would manually write in our response in the application. The questions were typical general information questions that were asked in a job application such as name, address, etc. I was told that they were doing it this way because it was much faster. Once the application was completed, Ana showed me the application for my review. I recall the application being in English only, so I just made sure the general information had been written in correctly by Ana. I then proceeded to manually sign the application. No copy of the application was given to me to my recollection.

            (Plaintiff Decl., ¶ 12.)

It is “generally unreasonable…to neglect to read a written contract before signing.” (Sanchez v. Velencia Holding Co., LLC (2015) 61 Cal.App.4th 899.) Here, by Plaintiff’s own admission, she was provided with the completed application for review before submission. Moreover, Plaintiff states that because the application was in English only, she “just made sure the general information had been written in correctly by Ana.” Plaintiff does not explain how her English capabilities would be sufficient to understand this general information but insufficient review other provisions.  Moreover, the arbitration provision is accompanied by a very large bold blue writing and requires multiple signatures:

The next document is the Mutual Agreement Regarding Arbitration and Class Claims. Signing this agreement is voluntary and not a condition of employment. Please review, choose accept or decline and sign and date as indicated. Please initial here to proceed with review.

Plaintiff does not indicate that she ever requested more time to review this (or any) provision given the language barrier, or asked Ana for clarification or translation. She was provided with the application for review and does not claim she was pressured in any way to sign. During her review, she did not ask for clarification or ask for assistance understanding the provisions of the document. Rather, she reviewed the English language document to confirm her general information and did not inquire about the character of the additional terms.  Accordingly, taken together, Plaintiff’s evidence fails to indicate that she was deprived a reasonable opportunity to learn the character and essential terms of the document. Moreover, given that Plaintiff does not dispute submitting the application which included arbitration provision, the Court finds inadequate evidence to conclude that Plaintiff did not provide the electronic signature on the arbitration agreement. 

B.    Covered Claims

Here, the arbitration agreement provides that it applies to “any dispute” between her and Real Time “relating to or arising out of [his] employment” including, without limitation, “claims for or under: …wages, salary, compensation, reimbursement, penalties, wrongful termination, constructive termination…the Federal Labor Standards Act and comparable state or local laws… the Americans with Disabilities Act, and/or other federal or comparable state or local laws that prohibit discrimination, harassment or retaliation based on...physical, mental or emotional impairment, disability, medical condition… and comparable state or local laws…and state laws regarding unfair competition or unfair business practices….” As such, Plaintiff’s claims here fall within the scope of the Complaint.

In opposition, Plaintiff does not argue that her claims against Moving Defendants do not fall within the scope of the agreement. Rather, Plaintiff only objects as to the joining parties, arguing that: “DEFENDANTS failed to identify defendant THE HAIN CELESTIAL GROUP, INC. as a third-party beneficiary in the purported Arbitration Agreement. Id. Therefore, it renders defendant THE HAIN CELESTIAL GROUP, INC. an irrelevant party to the Arbitration Agreement.” (Opp., 8: 8-11.)

However, as noted in Celestial’s joinder, the arbitration agreement expressly provides that it is meant to “apply to the Company’s clients where employees may be sent to work as explicit third-party beneficiaries of this agreement.” Accordingly, the agreement expressly contemplates that claims against the Company’s clients where employees are sent to work—in this case, Celestial—will fall within the scope of the agreement.

Given that Defendants have established by a preponderance of the evidence that an arbitration agreement exists, and that Plaintiff’s claims are covered by that agreement, the burden shifts to the Plaintiff to establish that the arbitration clause should not be enforced. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236. (Pinnacle).)

I.                   Plaintiff’s Burden

The party opposing arbitration bears the burden of proving, by a preponderance of the evidence any defense, such as unconscionability or duress. (Pinnacle, supra, 55 Cal.4th at p. 236.) Here, Plaintiff argues the arbitration agreement is invalid because it is unconscionable.

“Unconscionability has both procedural and substantive elements. Although both must appear for a court to invalidate a contract or one of its individual terms, they need not be present in the same degree: ‘[T]he 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.’”  (Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1469. (Roman).) Where the degree of procedural unconscionability is low, “the agreement will be enforceable unless the degree of substantive unconscionability is high.” (Ajamian v. CantorCO2e (2012) 203 Cal.App.4th 771, 796 (Ajamian).)

A.    Procedural Unconscionability

“Procedural unconscionability focuses on the elements of oppression and surprise. ‘Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice … Surprise involves the extent to which the terms of the bargain are hidden in a ‘prolix printed form’ drafted by a party in a superior bargaining position.’” (Roman, supra, 172 Cal.App.4th at p. 1469.)

            Plaintiff argues that the arbitration agreement is procedurally unconscionable because: (1) the adhesive nature of the contract; and (2) it doesn’t incorporate the applicable rules.

I.                   Adhesion Contract

Where employment adhesion contracts are involved, a degree of procedural unconscionability is always present. This is because, “the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration agreement.” (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071 (Little).)  However, where “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.” (Ajamian, supra, 203 Cal.App.4th at p. 796.)

Therefore, while Plaintiff is correct that including the arbitration clause within a contract of adhesion indicates a degree of procedural unconscionability, there must be other indications of oppression or surprise to render the agreement unenforceable. (Little, supra, 29 Cal.4th at p.1071; Ajamian, supra, 203 Cal.App.4th at p. 796.)

II.                Copy of the Arbitration Rules

As additional evidence of procedural unconscionability, Plaintiff points to Defendant’s failure to attach a copy of the applicable JAMS rules to the Arbitration Agreement. However, courts have held that a failure to attach arbitration rules is insufficient, by itself, to sustain a finding of procedural unconscionability. (Peng v. First Republic Bank (2013) 219 Cal.App.4th 1462, 1469.) Moreover, the arbitration agreement does not provide that arbitration will be conducted through JAMS—rather, it provides that it will be conducted by a neutral arbitrator mutually agreed upon by the parties. As such, the applicable rules could not be attached because the arbitration forum is not predetermined.

Taken together, the Court concludes that Defendants’ failure to attach a copy of arbitration rules does not amount to procedural unconscionability.

Because Plaintiff has shown no other indication of oppression or surprise outside of the existence of an employment adhesion agreement, the agreement will be enforceable unless Plaintiff can demonstrate a high degree of substantive unconscionability. (Ajamian, supra, Cal.App.4th at p. 796.)

B.    Substantive Unconscionability

Plaintiff argues that the agreement is substantively unconscionable because it includes within its scope third-party beneficiary claims. Plaintiff argues that “Such clause would cause detriment to PLAINTIFF by contractually engaging her to an unlimited and unidentifiable class of employers without PLAINTIFF’s acknowledgement.” (Opp., 8: 6-8.) However, Plaintiff does not cite a single case wherein a Court concluded that an arbitration agreement’s extension of coverage to claims against third-party beneficiaries has been found to be evidence of substantive unconscionability. Indeed, Courts regularly compel parties to arbitrate claims against third-parties under a theory of third-party beneficiary status or equitable estoppel.

            Plaintiff did not advance any other argument as to why the agreement is substantively unconscionable. 

Conclusion

While Plaintiff presented evidence of procedural unconscionability, Plaintiff has not presented any evidence of substantive unconscionability. As a result, the Court finds that the arbitration agreement is enforceable as to all of Plaintiff’s individual claims. (Ajamian, supra, Cal.App.4th at p. 796.)

Based on the foregoing, Defendants’ motion to compel arbitration of Plaintiff’s claim and stay the PAGA claim is granted.

It is so ordered.

Dated:  November    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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