Judge: Kevin C. Brazile, Case: BC623542, Date: 2023-01-31 Tentative Ruling

Hearing Date: January 31, 2023

Case Name: Renteria  v. Good Health, Inc., et al.

Case No.: 22STCV22040

Matter: Motion to Compel Arbitration 

Moving Party: Defendant Good Health, Inc.

Responding Party: Plaintiff Sandra Renteria 

Notice: OK

Ruling: The Motion to Compel Arbitration is granted.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

This is an employment action.  Defendant Good Health, Inc. seeks to compel arbitration of this matter based on an arbitration agreement executed by Plaintiff Sandra Renteria at the start of her employment.

Plaintiff opposes the Motion on the grounds that (1) there isn’t a binding agreement to the extent the arbitration agreement was a component of an employee handbook that expressly stated it did not create contractual obligations, and (2) the agreement is unconscionable.  

Plaintiff’s arguments lack merit.  It’s true that the handbook is itself nonbinding.  So, if Plaintiff signed only the handbook, there would be no agreement to arbitrate.  (See, e.g, Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 792; Sparks v. Vista Del Mar Child & Fam. Servs. (2012) 207 Cal.App.4th 1511, 1519.)  However, Plaintiff also signed a specific arbitration agreement that plainly explains it is binding.  (See Peralta Decl, Exhibit A [“[T]he Company, like the employee, agrees to be bound by this policy and agrees to arbitrate all disputes with its employees or former employees.”].)

Plaintiff further argues that the subject agreement is substantively unconscionable because it lacks mutuality to the extent (1) there is also an overbroad confidentiality agreement and (2) an appeal provision.

“ ‘[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.’ [Citation.] But 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.”  (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114.)

The argument as to the confidentiality agreement lacks merit because this is a separate agreement that does not even mention arbitration.  Further, the appeal provision is totally mutual.  (See Peralta Decl, Exhibit A [“The final award may be appealed to another arbitrator who will be chosen by the parties in the same manner as the original arbitrator. All the rules governing judicial appeals of judgments from the Superior Court shall apply to any appeal of this award, including but not limited to the time frames, deadlines and the standards of review.”].)  This is in contrast to Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071, cited by Plaintiff, wherein the provision in question stated that an appeal was only possible if the award exceeded $50,000—a provision obviously favoring the employer, who would have a much greater incentive to appeal in the case of a large award.  No such monetary limitation exists here.  

Because there is no substantive unconscionability, Plaintiff’s unconscionability defense fails.  (Armendariz, supra, 24 Cal.4th 83, 114 [defense of unconscionability requires both procedural and substantive unconscionability].)  

Because the existence of a valid arbitration agreement encompassing the subject claims has been shown, the Motion to Compel Arbitration is granted.  The objections are overruled.

The Court expects to set an OSC re: dismissal without prejudice pursuant to a reservation of jurisdiction by the Court to proceed if and as necessary with any appropriate enforcement or other proceedings herein; with respect to the parties subject to the Arbitration Order in this case, all applicable statutes of limitation are tolled from the date of entry of this Order.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.