Judge Kenneth J. Medel, Case 37-2023-00004507-CU-OE-CTL 2023-08-25 Tentative Ruling

Judge: Kenneth J. Medel, Case: 37-2023-00004507-CU-OE-CTL, Date: 2023-08-25 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - August 24, 2023

08/25/2023 09:30:00 AM C-66 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Kenneth J Medel

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Civil - Unlimited Other employment Motion Hearing (Civil) 37-2023-00004507-CU-OE-CTL SMITH VS CHG MEDICAL STAFFING INC [E-FILE] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 03/21/2023

CHG Medical Staffing, Inc.'s Motion to Compel Arbitration is GRANTED. This is a Wage & Hour purported class action against CHG – a national healthcare staffing company.

Defendant moves to compel arbitration based upon an arbitration agreement in the PSA signed by plaintiff on or about July 5, 2022, prior to commencing an assignment at Tri-City.

The agreement signed on July 5, 2022 included an 'DISPUTE RESOLUTION' provision. In pertinent part, Plaintiff and RNN 'agree to use binding arbitration pursuant to the Federal Arbitration Act, instead of going to court, for any 'Covered Claims' that arise or have arisen between [Plaintiff] and RNN, its related and affiliated companies, and/or any current or former employee of RNN or a related or affiliated company.' ''Covered claims' means any and all legal disputes arising out of or related to [Plaintiff's] employment with RNN, which include, but are not limited to, those claims arising from [Plaintiff's] application for employment with RNN, [Plaintiff's] employment, or the termination of [Plaintiff's] employment[],' as well as 'statutory and common law claims for underpayment or overpayment of wages[.]' 'Covered Claims will be arbitrated only on an individual basis[.]' '[B]oth RNN and [Plaintiff] waive the right to [participate] in or receive money or any other relief from any class, collective, or representative proceeding[,]' and '[n]either Party may bring a claim on behalf of other individuals[.]' The Arbitration Provision 'shall survive . . . expiration or termination of this Agreement.' 'The AAA's employment dispute resolution rules in effect at the time of the filing of the demand for arbitration . . . will apply to any arbitration pursuant to this Agreement.' Reed Dec. ¶ 5, Exh. A. The PSA also provides that '[i]f any provision of this Agreement is found to be invalid, all other provisions shall remain enforceable.' (Reed Dec. ¶ 5, Exh. A.) In opposition, Plaintiff claims that her Arbitration Agreement with CHG is unenforceable on the basis of alleged unconscionability.

Under the seminal case of Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000), unconscionability must consider first procedural and then substantive unconscionability.

Procedural unconscionability is found in oppression arising from unequal bargaining power and surprise arising from hidden or buried terms in a long or complex printed form. Substantive unconscionability, by contrast, is evidenced by unduly-harsh or one-sided results. '[I]n order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability,' the agreement must be both procedurally and substantively unconscionable. Armendariz, 24 Cal.4th at 114.

This assessment is made on a 'sliding scale;' the less procedurally unconscionable the contract term, the more evidence of substantive unconscionability required to find an agreement unenforceable.

Armendariz, 24 Cal.4th at 114.

Procedural Unconscionability Calendar No.: Event ID: TENTATIVE RULINGS

2952533 46 CASE NUMBER: CASE TITLE: SMITH VS CHG MEDICAL STAFFING INC [E-FILE] 37-2023-00004507-CU-OE-CTL Plaintiff first contends the Arbitration Agreement is 'oppressive' because it was imposed as a condition of employment. See Pl.'s Opposition at 2:10-20. Courts have held mandatory arbitration agreements imposed as conditions of employment are lawful, and that state laws restricting the ability of employers to mandate arbitration are preempted by the FAA. Baltazar v. Forever 21, Inc., 62 Cal.4th 1237, 1244 (2016); Dotson v. Amgen, Inc., 181 Cal.App.4th 975, 981-982 (2010); Chamber of Commerce v. Bonta, 62 F.4th 473 (9th Cir. 2023).

Plaintiff also argues that agreement is 'oppressive' because 'RNN offered Plaintiff, a resident of Texas, a travel assignment in California on July 1, 2022, and demanded that she complete the entire boarding process by July 11, 2022, so that she can begin her assignment on July 18, 2022. Plaintiff Decl. ¶¶ 3-4.

As part of her onboarding process, Plaintiff was required to review and/or sign numerous forms...',Oppo.

at 2:27-3:1; 3:11-17. Limited review is not alone a basis to deny. Cisneros Alvarez v. Altamed Health Servs. Corp., 60 Cal.App.5th 572, 591 (2021). In Cisneros, the court found no oppression where an employee – who was required to sign an arbitration agreement as a condition of employment – was given only a single 'day to review the letter offer and accompanying arbitration agreement[.]' Plaintiff was given 11 days to review and consider the agreement – it was provided to Plaintiff on July 1, 2022. (Declaration of Amy Reed in Support of CHG's Reply ('Reed Decl. II'), ¶ 5). Plaintiff signed the PSA on July 5, 2022, six days earlier than necessary. (Id.). Failure to read and understand agreements signed is not an excuse. See King v. Larsen Realty, Inc., 121 Cal. App. 3d 349, 358 (1981) (enforcing arbitration provision 'despite [plaintiffs'] ignorance' of same because 'a party is bound by the provisions of an agreement which he signs, even though he does not read them and signs unaware of their existence.').

Plaintiff contends that there is a surprise to the agreement requiring her to pay a part of the costs without providing her the AAA fee schedule. Oppo at 3:21-24. This may be an issue with substance, but is not a procedural issue. The provision itself is written in plain English in the PSA and is not hidden or obscured.

Plaintiff seems to contend that the amount of costs is not included in the agreement. 'Failure to attach the applicable AAA rules [does] not increase the procedural unconscionability of the application or its arbitration provision.' Nguyen v. Applied Med. Res. Corp., 4 Cal.App.5th 232, 249 (2016); see also Lane v. Francis Cap. Mgmt. LLC, 224 Cal.App.4th 676, 691 (2014) ('failure to attach a copy of the AAA rules did not render the agreement procedurally unconscionable' because 'the AAA rules are available on the Internet').

Substantive Unconscionability To establish substantive unconscionability, Plaintiff must show the Arbitration Agreement is 'so one-sided as to shock the conscience[.]' Prima Donna Dev. Corp. v. Wells Fargo Bank, N.A., 42 Cal.App.5th 22, 38 (2019) Plaintiff argues that a so-called 'survival clause' renders the agreement unconscionable. Plaintiff complains that this provision lacks bilaterality. The agreement requires arbitration after resignation from CHG, while CHG is free to bring claims against her in court.

However, defendant in reply concedes, the intent of the Arbitration Agreement applies bilaterally. The first sentence of the Arbitration Agreement is labeled 'Mandatory Mutual Arbitration Agreement.' The Arbitration Agreement goes on to expressly provide that 'RNN and Traveler agree to use binding arbitration . . . for any 'Covered Claims' that arise or have arisen between [them] . . .' (Reed Decl. I, ¶ 5, Exh. A, ¶ 4.1). And in case it is at all unclear, CHG's intention was and is that its obligation to arbitrate claims against Plaintiff, if any, survives the ending of the employment relationship between the Parties.

(Reed Decl. II, ¶ 4). There is no provision in this agreement that excludes arbitration claims most likely to be made by the employer.

Plaintiff argues also argues that the 'Remedies Provision' in the PSA (Paragraph 5.5) lacks mutuality because it allows CHG to 'recover certain kinds of damages from Plaintiff, without allowing Plaintiff to do the same.' Oppo. at 6:5-7. Plaintiff misconstrues the Remedies Provision and misapplies the law.

Defendant again concedes in Reply that this is not case. The Arbitration Agreement incorporates the AAA employment dispute resolution rules, which vest the arbitrator with authority to 'grant any remedy or relief that would have been available to the parties had the matter been heard in court . . .' See AAA Employment Arbitration Rule 39(d). The Remedies provision in the PSA provides that neither Party may recover various types of damages if the other Party breaches the PSA, with the exception that CHG may recover 'non-refundable expenses and fees incurred . . . in connection with [a] cancelled Assignment[.]' (Reed Decl. I, ¶ 5, Exh. A, ¶¶ 3.3, 5.5). Note that Plaintiff seeks damages for various wage claims in her Calendar No.: Event ID: TENTATIVE RULINGS

2952533 46 CASE NUMBER: CASE TITLE: SMITH VS CHG MEDICAL STAFFING INC [E-FILE] 37-2023-00004507-CU-OE-CTL Complaint, not damages based on breach(es) of the PSA.

Plaintiff also contends the 'Attorneys' Fees' provision is unconscionable. Plaintiff contends that Paragraph 4.3 (the 'Attorneys' Fees Provision') 'deprives' her of her statutory right to recover attorneys' fees under certain Labor Code provisions and, therefore, renders the entire Arbitration Agreement unconscionable. Oppo. at 8: 13-18.

However, the Attorneys' Fees Provision requires both Parties to pay their own attorneys' fees unless and until the arbitrator issues an award granting attorneys' fees to the other Party, which is within the arbitrator's purview pursuant to AAA Rule 39(d) (vesting the arbitrator with authority to 'grant any remedy or relief that would have been available to the parties had the matter been heard in court . . .').

In Roy v. Kooyker, No. No. 8:20-cv-00719-DOC-KES, 2020 WL 8414043, at *5 (C.D. Cal. June 10, 2020), the Court held that 'because the Employment Agreement has incorporated the AAA Rules, which allow the arbitrator to 'grant any remedy or relief that would have been available to the parties had the matter been heard in court 'ncluding awards of attorney's fees and costs,' the Employment Agreement has properly incorporated this provision of attorneys' fees and costs and does not unlawfully limit Plaintiff's remedies . . .' Plaintiff argues the 'Costs' provision is unconscionable. IN its motion, CHG is waiving the provision requiring plaintiff to pay costs. Plaintiff need not incur any costs unique to arbitration, as CHG has agreed to pay all costs over and above those Plaintiff would be required to pay had she filed her lawsuit in court. See Motion at 9:13-27; Reed Decl. I, ¶ 8.

Plaintiff challenges the 'Governmental Agency Proceedings' provision. Paragraph 4.1 (the 'GAP Provision') provides that while Plaintiff may file a claim or charge with any governmental agency, she is 'giving up the opportunity to recover [monetary] amounts from any such governmental agency related claim.' (Reed Decl. I, ¶ 5, Exh. A). Plaintiff contends that the Remedies, Attorneys' Fees, and Costs Provisions render the Arbitration Agreement and process unfair and inaccessible, and she is therefore being required to waive rights without an 'accessible and affordable forum for resolving wage disputes.' Oppo. at 11:19-28. However, it is not clear that arbitration is necessarily 'unfair' and 'inaccessible.' Plaintiff argues Paragraph 4.2 is unconscionable. That section 'waives' class and collective claims.

Plaintiff argues this is a waiver of Plaintiff's right to pursue a PAGA claim. The United States Supreme Court held in Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906, 1917 (2022) that 'wholesale' PAGA waivers are unenforceable, but nonetheless enforced the portion of the waiver that was valid due to the existence of a severability clause. The same is the result here. Like in Viking River Cruises, the PSA contains a severability clause providing that '[i]f any provision of this Agreement is found to be invalid, all other provisions shall remain enforceable.' (Reed Decl. I, ¶ 5, Exh. A, ¶ 5.3).

In this case, as stated in the reply, CHG agrees to waive enforcement of the GAP provision. (Reed Decl.

II, ¶ 9). CHG agrees to partially waive Paragraph 4.2, i.e., to the extent it can be construed to preclude Plaintiff's ability to pursue a claim for violation of PAGA. (Reed Decl. II, ¶ 10).

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