Judge Kerry Bensinger, Case Number: 24STCV25779, Date: 2025-02-21 Tentative Ruling

On October 4, 2024, plaintiff Jonathan Thompson (Plaintiff) filed this action against defendant BEHR Sales LLC (Defendant) and Does 1 through 10. The complaint alleges causes of action for (1) Violation of Labor Code §§ 510 and 1194 (Failure to Pay Overtime); (2) Violation of California Labor Code §§ 201, 202, 203 (Failure to Pay Wages Due at Separation of Employment); (3) Violation of California Labor Code §§ 226 (Failure to Provide Accurate Itemized Wage Statements); (4) Violation of Labor Code §§ 226.7 (Failure to Pay Meal Break Premiums); (5) Violation of Business and Professional Code §§ 17200 et seq. (Unlawful Business Practice); and (6) Violation of California Labor Code § 1102.5 (Whistleblower).

On March 14, 2022, Defendant hired Plaintiff to work as an hourly Pro Paint Specialist. Defendant signed the initial Arbitration Agreement on March 16, 2022. (Reyes Decl., Exh. A.)

On February 14, 2023, Plaintiff signed an updated Arbitration Agreement after receiving an employee handbook with updated policies. (Reyes Decl., Exh. B.) The updated policies included the Arbitration Agreement. The Arbitration Agreement provides, in part:

The disputes covered by this Policy include any claim under applicable state or federal common or statutory law the Company might have against the team member, including, for example, theft of property, misuse of Company information, and fraud. Also included is any claim under applicable state or federal common or statutory law a team member might have against the Company including, for example, all claims for: wages or other compensation due; breach of any contract; violations of public policy; negligence; intentional torts; any alleged exception to the workers’ compensation laws; defamation; all forms of unlawful discrimination and retaliation (including, but not limited to, race, color, sex, religion, national origin, disability, marital status or age); denial of fringe benefits; violation of any federal, state, or other governmental law, statute, regulation, or ordinance; and, any other matters arising under common or statutory law. Disputes covered by this Policy shall also include any claim a team member might have against any officer, director, team member, or agent of the Company, or any of the Company’s subsidiaries, divisions, and affiliates, if that claim in any way arises out of or relates to the application process, the employment relationship, or the separation of the employment relationship. It is the intent of all parties to submit to mediation and arbitration, to the fullest extent permitted by law, all covered disputes and claims the Company might have against a team member and all covered disputes and claims a team member might have against the Company and any of the Company’s subsidiaries, divisions, affiliates, officers, directors, team members, and agents. Because this Policy promotes mediation and arbitration as the exclusive remedy for claims and disputes covered by this Policy, the Company and the team member agree to be bound by those laws best promoting the enforceability of mediation and arbitration agreements, including the Federal Arbitration Act, federal common law, and any applicable state laws promoting arbitration.

On December 20, 2023, an employee of Defendant fired Plaintiff. Defendant alleges Plaintiff was terminated for his involvement in theft of a competitor’s proprietary information. Plaintiff believes he was fired for reporting a coworker’s illegal activities to his supervisor.

On November 19, 2024, Defendant filed this Motion to Compel Arbitration and Stay Proceedings Pending Arbitration along with supporting documents to arbitrate the underlying action.

On January 14, 2025, Plaintiff filed and served his opposition and supporting documents.

Under California¿law,¿public policy favors arbitration as an efficient and less expensive means of resolving private disputes.¿ (Moncharsh¿v.¿Heily¿&¿Blase¿(1992) 3 Cal.4th 1, 8-9 (Moncharsh);¿AT&T Mobility LLC v. Concepcion¿(2011) 563 U.S. 333, 339 (Concepcion).) ¿Similarly, the Federal Arbitration Act (FAA) reflects a liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract.¿ (Concepcion,¿supra, 563 U.S. at p. 339.)¿ In line with these principles, courts must place arbitration agreements on an equal footing with other contracts and enforce them according to their terms.¿ (Ibid.)¿ “[U]nder both the FAA and California law, ‘arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’”¿ (Higgins v. Sup. Ct.¿(2006) 140 Cal.App.4th 1238, 1247 (Higgins).)¿ Accordingly, whether an agreement is governed by the California Arbitration Act (CAA) or the¿FAA, courts resolve doubts regarding the scope of arbitrable issues in favor of arbitration.¿ (Moncharsh, supra, 3 Cal.4th at p. 9; Comedy Club, Inc. v. Improv WestAssocs.¿(9th Cir. 2009) 553 F.3d 1277, 1284.)

While the arbitration agreement may be governed by the FAA, the agreement may be enforced via the summary procedures provided by California arbitration law. (Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th 394, 409-410 (Rosenthal).) It is a “general and unassailable proposition . . . that States may establish the rules of procedure governing litigation in their own courts,” even though the controversy is governed by substantive federal law. (Felder v. Casey¿(1988) 487 U.S. 131, 138.) By the same token, however, a state procedural rule must give way “if it impedes the uniform application of the federal statute essential to effectuate its purpose, even though the procedure would apply to similar actions arising under state law.” (McCarroll v. L.A. County etc. Carpenters¿(1957) 49 Cal.2d 45, 61, 62.)

A party to an arbitration agreement may seek a court order compelling the parties to arbitrate a dispute covered by their agreement. (Code Civ. Proc., § 1281.2.) California statutes create a “summary proceeding” for resolving petitions or motions to compel arbitration. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972 (Engalla).)

When a party has filed a petition to compel arbitration, the trial court must determine in a summary proceeding whether an “agreement to arbitrate the controversy exists.” (Code Civ. Proc., §§ 1281.2, 1290.2; Rosenthal, supra, 14 Cal.4th at pp. 412–413.) In that proceeding, because the existence of the agreement is a statutory prerequisite to granting the petition, “[t]he petitioner 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. [Citation.] In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.” (Engalla, supra, 15 Cal.4th at p. 972; Rosenthal, supra, 14 Cal.4th at p. 413.)

The court should grant the motion unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for rescission of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Code Civ. Proc., § 1281.2; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)

The trial court typically decides the threshold issues of enforceability of the arbitration agreement and the scope of issues to be arbitrated. (Aanderud v. Sup.Ct. (Vivint Solar Developer, LLC) (2017) 13 Cal.App5th 880, 891.)

Plaintiff does not dispute the existence of the Arbitration Agreement, nor does Plaintiff dispute the scope of the Arbitration Agreement as covering Plaintiff’s claims. Instead, Plaintiff opposes enforcement of the agreement because it is unconscionable. In reply, Defendant makes three arguments: (1) the FAA controls and precludes application of state law; 2) the arbitrator must decide the enforceability of the agreement based upon a “delegation” clause, and 3) the agreement is not unconscionable. The court addresses each argument in turn.

The Agreement states: “the Company and the team member agree to be bound by those laws best promoting the enforceability of mediation and arbitration agreements, including the Federal Arbitration Act, federal common law, and any applicable state laws promoting arbitration.” (Reyes Decl. Exh. B (Claims and Disputes Covered By this Policy).) (Emphasis added.) It is unclear what laws “best promot[e] the enforceability of mediation and arbitration agreements.” (Reyes Decl. Exh. B.) Moreover, it is also unclear which law will enforce the Arbitration Agreement when there are multiple laws listed.

Moreover, Defendant’s point is of little moment because even if the FAA applied, it does not foreclose application of state law contract defenses, such as unconscionability. As the United States Supreme Court stated, “The final phrase of § 2 [of the FAA], however, permits arbitration agreements to be declared unenforceable ‘upon such grounds as exist at law or in equity for the revocation of any contract.’ This saving clause permits agreements to arbitrate to be invalidated by ‘generally applicable contract defenses, such as fraud, duress, or unconscionability,’ but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” (Concepcion, supra, 563 U.S. at p. 339 (citations omitted).)

There is no delegation clause in the Arbitration Agreement. A delegation clause ofter looks something like this: “Delegation; Interpretation. The arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to the extent permitted by law to resolve all disputes arising out of or relating to the interpretation, applicability, enforceability, or formation of this Agreement, including but not limited to, any claim that all or any part of this Agreement is void or voidable ....” (Heckman v. Live Nation Entertainment, Inc. (9th Cir. 2024) 120 F.4th 670, 681.) The language cited by Defendant – “the Company and its team members will be subject to AAA Employment Dispute Resolution (in effect at the time the dispute arose) and this Policy” – is not a delegation clause.

To invalidate the arbitration provision, plaintiffs must show that it is both procedurally and substantively unconscionable. (Marin Storage & Trucking, Inc. v. Benco Contracting & Eng'g, Inc. (2001) 89 Cal.App.4th 1042, 1053.)

“Unconscionability consists of both procedural and substantive elements. Procedural unconscionability addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power. Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided.) Both elements must be present for a court to refuse to enforce an arbitration agreement. However, the elements do not need to be present in the same degree and are evaluated on a sliding scale. [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.” (Magno v. The College Network, Inc. (2016) 1 Cal.App.5th 277, 284–285 (cleaned up).)

Procedural unconscionability has to do with matters relating to freedom of assent. (Kinney v. United Healthcare Servs. (1999) 70 Cal.App.4th 1322, 1329.) The procedural element focuses on two factors: oppression and surprise.¿ (Id.) “Oppression” arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice. (Id.) “Surprise” involves the extent to which the supposedly agreed-upon terms of the bargain are hidden in the printed form drafted by the party seeking to enforce the disputed terms. (Id.)¿¿

A “contract of adhesion” creates some amount of procedural unconscionability – the term signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it. (Neal v. State Farm Ins. Cos. (1961) 188 Cal.App.2d 690, 694.) In addition, a lack of effort to highlight the presence of an arbitration provision, such as through bold lettering, larger font, or capitalization, has been found to indicate procedural unconscionability. (See Higgins, supra, 140 Cal.App.4th at pp. 1252-53.)¿¿However, when there is no other indication of oppression other than the adhesive aspect of an agreement, the degree of procedural unconscionability is low. (Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704.)¿¿¿

“[T]he fact that the arbitration agreement is an adhesion contract does not render it automatically unenforceable as unconscionable. Courts have consistently held that the requirement to enter into an arbitration agreement is not a bar to its enforcement.” (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 179 (Serafin); see also Concepcion, supra, at pp. 346-47 [“the times in which consumer contracts were anything other than adhesive are long past”].)¿

Plaintiff contends the Arbitration Agreement is procedurally unconscionable for several reasons. First, the Arbitration Agreement was presented to Plaintiff on a take-it-or-leave-it basis, i.e., an adhesion contract, because it was a required “term of application and employment.” (Opp., p. 9.) Second, Plaintiff contends Defendant buried the Arbitration Agreement in a large packet that required Plaintiff to sign eight acknowledgments. (Opp., p. 9.) Next, the Arbitration Agreement contains “confusing, conflicting, and misleading terms and legalese.” (Opp., p. 10.) Fourth, the Arbitration Agreement includes procedural rules that “employees have no reason or way to understand.” (Opp., p. 12.) Fifth and finally, the Arbitration Agreement exempts disputes governed by other written agreements but does not clarify whether any of these written agreements exist. (Opp., p. 12.)

Plaintiff has adequately demonstrated procedural unconscionability because the Arbitration Agreement is an adhesion contract. Plaintiff’s declaration, however, does not support much else when it comes to procedural unconscionability. Defendant did not bury the Arbitration Agreement in the Handbook, but the Arbitration Agreement contains a series of confusing, conflicting, and misleading terms and legalese. Also, with respect to surprise, the Arbitration Agreement states, “the Company reserves the right to change, modify, or discontinue this Policy at any time upon prior written notice to the Company’s current team members.” (Reyes Decl., Exh. B (Change, Modification or Discontinuation).) The Company’s unilateral decision to change the Policy would certainly come as a surprise to the Plaintiff, even though he might be given notice of the change.

However, whether the Arbitration Agreement is an adhesion contract is not dispositive in establishing procedural unconscionability. (Peng v. First Republic Bank (2013) 219 Cal.App.4th 695, 704.) “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.’” (Id. at p. 710, quoting Ajamian v. CantorCO2e (2012) 203 Cal.App.4th 771, 796.)

Accordingly, because there are procedurally unconscionable terms beyond the adhesive nature of the Agreement, Plaintiff has shown an intermediate level of procedural unconscionability.

“‘Substantive unconscionability’ focuses on the terms of the agreement and whether those terms are ‘so one-sided as to “shock the conscience.”’ (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1330 (citations omitted).) A contractual provision that is substantively unconscionable may take various forms but may generally be described as unfairly one-sided. (Ibid.) The paramount consideration in assessing [substantive] conscionability is mutuality. (Ibid.) We have recently identified on a nonexclusive basis certain type of provisions in mandatory employment arbitration contracts that have been held substantively unconscionable. Those cases include: (1) where the agreement unfairly favored the employer by allowing for appeal of arbitration awards in excess of $50,000 (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1072-1074); (2) where the employer imposed forum costs on the employee (McManus v. CIBC World Markets Corp. (2003) 109 Cal.App.4th 76, 93); (3) where the employee’s damage remedy was limited, the employee was required to pay all costs, and the required hearing location was Oakland (Pinedo v. Premium Tobacco Stores, Inc. (2000) 85 Cal.App.4th 774, 781); and (4) where the contract provided that, pending the arbitration hearing, the employee lost his job, salary, and benefits (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1542).

Plaintiff contends the Arbitration Agreement is substantially unconscionable for several reasons. First, the Arbitration Agreement’s scope is too broad. (Opp., p. 12.) Second, Plaintiff contends the Arbitration Agreement’s duration is indefinite. (Opp., p. 14.) Next, the Arbitration Agreement lacks mutuality in the claims to be arbitrated. (Opp., p. 15.) Fourth, the Arbitration Agreement contains an impermissible time limit on filing claims. (Opp., p. 17.) Fifth and finally, the Arbitration Agreement contains a confidentiality provision that requires everything to remain confidential. (Opp., p. 17.)

The court finds Plaintiff has adequately demonstrated substantive unconscionability. The first three issues track the same concerns raised in Cook v. University of Southern California (2024) 102 Cal.App.5th 312 (Cook).

Cook found substantive unconscionability because the arbitration agreement required the arbitration of “all claims, whether or not arising out of Employee’s University employment.” (Cook, supra, 102 Cal.App.5th at p. 321.) The Arbitration Agreement’s scope is broad and includes any and all claims between Defendant and Plaintiff. The language declares “disputes covered by this Policy include any claim under applicable state or federal common or statutory law the Company might have against the team member … [any] any claim under applicable state or federal common or statutory law a team member might have against the Company.” (Reyes Decl., Exh. B.) The language does not limit the types of claims to those arising out of the parties’ employment relationship. Instead, the Arbitration Agreement “shall also include any claim a team member might have against any officer, director, team member, or agent of the Company, or any of the Company's subsidiaries, divisions, and affiliates, if that claim in any way arises out of or relates to the application process, the employment relationship, or the separation of the employment relationship.” (Reyes Decl., Exh. B.) This sentence expands coverage to include more claims than those that arise from the employment relationship.

Second, Plaintiff argues the Arbitration Agreement’s indefinite duration is substantively unconscionable. Cook found substantive unconscionability because the arbitration agreement “survived indefinitely following [plaintiff’s] termination from [defendant].” (Cook, supra, 102 Cal.App.5th at p. 325.) The Arbitration Agreement suffers from the same flaw. The language declares “[t]he terms of this Policy in effect at the time of the facts giving rise to the dispute took place are the terms that will be binding on the Company and the team member.” (Reyes Decl., Exh. B.) “Team members include current and former team members as well as all applicants for employment or any other person or entity that expressly agree to be bound by the terms of this Policy.” (Reyes Decl., Exh. B, emphasis added.) In addition, “the Company reserves the right to change, modify or discontinue this Policy at any time upon prior written notice to the Company's current team members.” (Reyes Decl., Exh. B.) Thus, the Arbitration Agreement applies to all current and former employees until the Company decides to modify or discontinue the Arbitration Agreement upon prior written notice to current employees. Like Cook, the Arbitration Agreement contains an express duration – ongoing until the Company decides to modify or discontinue it – which indicates the parties did not terminate the agreement at will.

Third, Plaintiff argues the Arbitration Agreement lacks mutuality again finds support in Cook, supra, 102 Cal.App.5th 312. In Cook, the Court of Appeal held the arbitration agreement to be substantially unenforceable, because “[t]he plain language of the arbitration agreement … provides a significant benefit to [defendant’s] related entities without any reciprocal benefit to [plaintiff].” (Cook, supra, 102 Cal.App.5th at p. 328.) The language in Cook is extremely similar to the relevant language in the Arbitration Agreement. The Arbitration Agreement requires Plaintiff to arbitrate “any claim a team member might have against any officer, director, team member, or agent of the Company, or any of the Company's subsidiaries, divisions, and affiliates, if that claim in any way arises out of or relates to the application process, the employment relationship, or the separation of the employment relationship,” but does not require “any officer, director, team member, or agent of the Company, or any of the Company's subsidiaries, divisions, and affiliates” to arbitrate their claims against Plaintiff. (Reyes Decl., Exh. B.) Neither the Arbitration Agreement nor Defendant explain the one-sidedness.

Moreover, the agreement lacks mutuality because the Company can modify or terminate the Policy at its discretion. Plaintiff cannot avoid the retroactive application of any changes. For these reasons, the court finds the Arbitration Agreement lacks mutuality and is substantively unconscionable.

Fourth, the court agrees with Plaintiff’s assertion that the Arbitration Agreement’s time limits on filing claims are substantively unconscionable. Plaintiff’s argument relies on Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478 (Ramirez). In Ramirez, the Supreme Court of California held the arbitration agreement to be substantially unenforceable, because “[t]he filing limitation substantially shortens the time for fully pursuing [claims] and may preclude a [Department of Fair Employment and Housing] investigation.” (Ramirez, 16 Cal.5th at p. 502.) Plaintiff similarly argues the filing limitations greatly expedite the timeline to bring claims. (Opp., p. 17.) According to the Arbitration Agreement, plaintiffs must bring non-statutory claims to mediation within “one year after the claim accrued unless a different period is specifically provided for in the express written agreement.” (Reyes Decl., Exh. B.) “In the case of a statutory right, the team member and the Company have the length of one (1) year, or the statute of limitations for that statutory right, to file a Request for Mediation.” (Reyes Decl., Exh. B.) “If the mediation does not resolve the dispute, the party who desires to proceed to arbitration is requested to file a Request for Arbitration as soon as possible but in no event more than 90 calendar days after the [mediation].” (Reyes Decl., Exh. B.) This second rule does not distinguish between statutory and non-statutory claims. (Opp., p. 17.) Effectively, plaintiffs must bring non-statutory claims to mediation within one year and arbitrate them no less than ninety days later. (Opp., p. 17.) Plaintiff contends that if plaintiffs choose not to arbitrate statutory claims alongside non-statutory claims, they “risk any ruling barring statutory claims through res judicata and collateral estoppel.” (Opp. p. 17.) Plaintiff believes this creates a “[one year and ninety-day] statute of limitations on all claims.” (Opp., p. 17.) Because the filing limitation substantially shortens the time for fully pursuing claims, the court finds substantive unconscionability. (See also Jenkins v. Dematology Management (2024) 107 Cal.App.5th 633.)

Fifth, the court agrees with Plaintiff’s belief that Arbitration Agreement is substantially unconscionable, because it contains a confidentiality provision that requires everything to remain confidential. Plaintiff finds support in Ramos v. Superior Court (2018) 28 Cal.App.5th 1042 (Ramos). Ramos found substantive unconscionability because the arbitration agreement “impair[ed] her ability to engage in informal discovery.” (Ramos, supra, 28 Cal.App.5th at p. 1066.) The confidentiality provision in Ramos stated, “Except to the extent necessary to enter judgment on any arbitral award, all aspects of the arbitration shall be maintained by the parties and the arbitrators in strict confidence.” (Id. at p. 1065.) The Court of Appeal found that [plaintiff] “would be in violation of the provision if she attempted to informally contact or interview any witnesses outside the formal discovery process.” (Id. at p. 1065.) Furthermore, the provision would increase costs, make arbitration less simple and time-effective, and may discourage plaintiffs from filing claims. (Id. at pp. 1066-1067.) Plaintiff compares the similarity of the two confidentiality provisions.

Here, the Arbitration Agreement requires, “All aspects of the arbitration, including the record, are confidential and not open to the public except to the extent both parties might otherwise agree in writing, the record is necessary for any subsequent proceeding between the parties, or the record is necessary to respond to an order of a governmental agency or legal process.” (Reyes Decl., Exh. B.) Like Ramos, the Arbitration Agreement’s confidentiality provision applies to “[a]ll aspects of the arbitration.” (Reyes Decl., Exh. B.) Thus, confidentiality would apply to informal discovery and have the same negative consequences. For these reasons, the court finds the Arbitration Agreement’s confidentiality provision to be substantively unconscionable.

Because the court finds intermediate levels of procedural unconscionability and high levels of substantive unconscionability, the court finds the contract to be unconscionable.

“[A] court should sever an unconscionable provision unless the agreement is so ‘permeated’ by unconscionability¿that it cannot be cured by severance. [Citation.] ‘An arbitration agreement can be considered permeated by unconscionability if it “contains more than one unlawful provision... Such multiple defects indicate a systematic effort to impose arbitration ... not simply as an alternative to litigation, but as an inferior forum that works to the [stronger party’s] advantage.” [Citations.]’ The overarching inquiry is whether the interests of justice would be furthered by severance.” (Serafin, supra, 235 Cal.App.4th at pp. 183–184.) Thus, the Court has the discretion to¿either¿sever¿unenforceable portions of an arbitration agreement and enforce the remainder of the arbitration agreement¿or,¿in the alternative,¿refuse to enforce the entire agreement.¿ (Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 122 (Armendariz) [finding that pursuant to Civil Code section 1670.5(a), a trial court has the discretion as to whether to¿sever¿or restrict¿an¿unconscionable provision¿of an arbitration agreement¿or whether to refuse to enforce the entire agreement].) Refusing to enforce the entire agreement instead of simply¿severing an unenforceable provision “appears to be contemplate[d] only when an agreement is “permeated” by unconscionability.¿ (Ibid.)¿

“Civil Code section 1670.5 does not authorize … reformation by augmentation, nor does the arbitration statute. Code of Civil Procedure section 1281.2 authorizes the court to refuse arbitration if grounds for revocation exist, not to reform the agreement to make it lawful. Nor do courts have any such power under their inherent, limited authority to reform contracts.” (Armendariz, supra, 24 Cal.4th at p. 125.)

The court finds the Arbitration Agreement permeated by unconscionability. The court has found the following provisions or portions of these provisions unconscionable: Claims and Disputes Covered by this Policy, Applicable Mediation and Arbitration Rules, Time Limits, Discovery, and Record. Were the court to sever these provisions, there would be little left in the Arbitration Agreement and the court would still need to fix the lack of mutuality through reformation. Under Armendariz, the court does not have the power to reform contracts. For these reasons, the court will not enforce the Arbitration Agreement to further the interests of justice.

Code of Civil Procedure section 1281.4 provides that if the court has ordered the arbitration of a controversy, it “shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” Therefore, under section 1281.4, the court will DENY the motion to stay this action, because the motion to compel arbitration is denied.

Based on the foregoing, the motion to compel arbitration and stay proceedings pending individual arbitration is DENIED.

Kerry Bensinger

Judge of the Superior Court

[1] For some unexplained reason Plaintiff toggles back and forth between the two versions of the arbitration agreement. Other than confusing the issues, Plaintiff does not explain the importance of the distinction between the two versions. As the February 14, 2023, version is the operative version, the court focuses on this version.