Judge: Jon R. Takasugi, Case: 23STCV14464, Date: 2023-12-12 Tentative Ruling

Case Number: 23STCV14464    Hearing Date: December 12, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ motion to compel arbitration is GRANTED. This action is ordered stayed pending the completion of arbitration. 

            On 6/21/2023, Plaintiff Ester Machado (Plaintiff) filed suit against L.A. Downtown Medical Center (Defendant), alleging: (1) retaliation in violation of Labor Code section 1102.5; (2) retaliation in violation of Labor Code section 6310; and (3) unfair business practices.

            Now, Defendant moves to compel Plaintiff to arbitrate her Complaint, and stay this action pending the completion of arbitration.

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).)

Discussion

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.)

            Here, Defendant submitted evidence that on 6/12/2019, Plaintiff executed LADMC’s Agreement to be Bound by Alternative Dispute Resolution Policy. (Rodriguez, Exh. A.)

            In opposition, Plaintiff disputes signing the Agreement and argues that Defendant has presented insufficient evidence to show that the arbitration agreement is between itself and Plaintiff.

            After review, the Court finds that the preponderance of evidence supports a finding that Plaintiff and Defendant entered into a binding agreement to arbitrate for the following reasons.

Plaintiff does not dispute that the signature is hers. While the other signatory on the agreement is not expressly listed as Defendant, the signatory is listed as the Facility Representative and the document presented was part of the onboarding packet for Plaintiff’s employment at Defendant’s facility. The signatory is Arlene Rodriguez who is a Human Resources Coordinator for Defendant. Ms. Rodriguez submitted a declaration that she was responsible for explaining the document to Plaintiff, and that the document was located in Plaintiff’s employee personnel file. Taken together, there is no ambiguity that the “Facility” in question was Defendant, and that it was the other party to the Agreement.   

            Put another way, while Plaintiff claims to have no memory of signing the document, the document was located within her employee personnel file. There is also no dispute that the document is part of a New Hire Packet, and that Plaintiff was participating in employee onboarding at the time. Ms. Rodriguez, the other signatory to the agreement, submitted a declaration stating that it is her normal course of action is to explain the documents to the employees in person, to give them time to review, and to allow them to ask questions. (Rodriguez Decl., ¶ 4.)

Taken together, the evidence indicates that an arbitration exists between Defendant and Plaintiff. Plaintiff’s claims, which arise out of her employment, 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).

II.                Plaintiff’s Burden 

Given that Defendant has 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, 55 Cal.4th at p. 236.)

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

Plaintiff argues that the arbitration agreement is procedurally unconscionable because: (1) Plaintiff was required to sign under pressure; and (2) Plaintiff could not understand the agreement based on the formatting and language.

“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.)

As for the first contention, Plaintiff herself argues that she does not remember signing the agreement. As such, Plaintiff’s contention that she was required to quickly sign the document under pressure carries less weight. Ms. Rodriguez submitted a declaration that Plaintiff, like all new hires, was provided an opportunity to review the document and ask questions before signing. While Plaintiff contends that Defendant only allows employees to take a copy of the Agreement home if they specifically request a copy, Plaintiff does not indicate that she ever requested a copy or was prevented from requesting copy. Plaintiff also does not explain how this would exert pressure over her to sign. Similarly, Plaintiff states that Defendant does not make clear whether or not you had the option to take the Agreement home before signing, but does not state she ever asked.

Moreover, Plaintiff argues that the pressure she faced was “acutely high” given that the contract was one of adhesion, and cites OTO, L.L.C., v. Kho (2019) 447 P.3d 680 in support. However, in Oto, the court found evidence of “substantial oppression” where the plaintiff, who did not speak English as a first language, was approached at his workstation by a human resources “porter” three years after beginning his employment, and “asked him to sign several documents. [Plaintiff] was required to sign them immediately and returned them to the porter, who waited in the workstation.” (OTO, supra, 447 P.3d at p. 720.) Moreover, the Court there noted that the economic pressure to accept an arbitration to keep one’s job is far greater than in a pre-employment context because “[e]mployees who have worked in a job for a substantial length of time have likely come to rely on the benefits of employment. For many, the sudden loss of a job may create major disruptions, including abrupt income reduction and an unplanned reentry in to the job market.” (Id. at p. 727.) 

            Here, the arbitration agreement was presented in a pre-employment context, not as a condition to keep one’s job, there is no evidence that Plaintiff cannot speak, read, or understand English, and the preponderance of evidence suggests that Plaintiff had an opportunity to review the agreement.

            As such, the fact that the employment contract here was one of adhesion evinces only a low degree of procedural unconscionability.

            As for the second contention, the arbitration agreement is only a page long and is legible and clear. Plaintiff did not submit any credible evidence to show that she informed anyone she could not easily read the font, or asked for a larger version. Plaintiff also did not submit credible evidence that she asked for clarification on the meaning of the document before signing.

In sum, the Court finds that Plaintiff’s evidence shows only a degree of procedural unconscionability.  As such, unless Plaintiff can show a high level of substantive unconscionability, the agreement will be enforced.

B.    Substantive Unconscionability

Plaintiff argues the Arbitration Agreement is substantively unconscionable because it is unilateral. 

“Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create ‘overly harsh’ or ‘‘one-sided’ results,’ that is, whether contractual provisions reallocate risks in an objectively unreasonable or unexpected manner.” (Roman, supra, 172 Cal.App.4th at pp. 1469-1470.) Substantive unconscionability ‘may take various forms,’ but typically is found in the employment context when the arbitration agreement is ‘one-sided,’ in favor of the employer without sufficient justification. (Ibid.) Common examples of substantive unconscionability include “when ‘the employee's claims against the employer, but not the employer's claims against the employee, are subject to arbitration’” (ibid), or when employees are required to pay excessive fees to gain access to the administrative forum. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 90-91 (Armendariz).)

Here, Plaintiff argues the Agreement is unilateral based on the third paragraph of the Agreement which provides “I agree that in the event employment disputes arise between my employer (herein referred to as the “Company”, on the one hand, and me, on the other hand, I will be bound by the Company ADR Program, which provides for final and binding arbitration.” Plaintiff argues that this provides that only the employee is bound to arbitrate. However, in paragraph six, the agreement expressly states (original emphasis): “…AND IN CONSIDERATION FOR THE COMPANY’S RETURN AGREEMENT TO BE BOUND BY THE ADR PROGRAM….” As such, contrary to Plaintiff’s contention, Defendant has expressly agreed to be bound by the Company’s ADR Program. 

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 cause of action. (Ajamian, supra, Cal.App.4th at p. 796.)

            Based on the foregoing, Defendants’ motion to compel arbitration is granted, and this action is ordered stayed pending the completion of arbitration.

It is so ordered.

Dated:  December    , 2023

   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.  For more information, please contact the court clerk at (213) 633-0517.