Judge: Maurice A. Leiter, Case: 22STCV13258, Date: 2023-01-10 Tentative Ruling

Case Number: 22STCV13258    Hearing Date: January 10, 2023    Dept: 54

Hearing Date: January 10, 2023

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Tetra Tech, joined by Andrew Scott Durrant

Responding Party: Plaintiff Troy Baker

T/R:    DEFENDANT’S MOTION TO COMPEL ARBITRATION IS GRANTED IN PART AND DEFERRED IN PART. 

DEFENDANT’S MOTION IS GRANTED AS TO PLAINTIFF’S INDIVIDUAL CLAIMS.  THAT PORTION OF THE CASE IS STAYED PENDING BINDING ARBITRATION. 

THIS COURT DEFERS ITS RULING ON THE ISSUE OF DISMISSAL OF PLAINTIFF’S REPRESENTATIVE CLAIM PENDING THE CALIFORNIA SUPREME COURT’S DECISION IN ADOLPH V. UBER TECHNOLOGIES, CASE NO. S27467. 

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

            The Court considers the moving papers, opposition, and reply.

BACKGROUND

            On April 20, 2022, Plaintiff filed a complaint against Defendants alleging FEHA and Labor Code violations and PAGA claims.

ANALYSIS

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate a controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….”  (CCP § 1281.2.)  The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact.   (CCP § 1281.2(a)-(c).)  “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

A.        Existence of Arbitration Agreement and Applicable Law

Defendant moves to compel arbitration based on the “Employment-At-Will and Arbitration Agreement” executed by Plaintiff on January 5, 2021 through the new employee onboarding process. (Decl. Renta, Exh. A.) The agreement provides, “I further agree and acknowledge that the Company and I will utilize binding arbitration as the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to my employment, including but not limited to the termination of my employment and my compensation.” (Id.)  This action arises from Plaintiff’s employment with Defendant.

In opposition, Plaintiff asserts Defendant has failed to establish Plaintiff executed the agreement electronically. To establish execution, Defendant provides the declaration of Lesley Hubbard, Associate Director of Tetra Tech’s Human Resources Information System. Hubbard explains the process of electronic onboarding and record keeping. Hubbard declares that the records show Plaintiff personally accessed, reviewed, and signed the agreement on January 5, 2021. (Decl. Hubbard ¶ 10.) This is sufficient to establish the existence of an agreement to arbitrate.

Defendant has met its burden to establish an agreement to arbitrate. The burden shifts to Plaintiff to establish any defenses to enforcement.

The agreement states that it is governed by the FAA.

B. Enforceability of Agreement

1. Unconscionability

Plaintiff asserts that the arbitration agreement is procedurally unconscionable as it is an adhesion contract. Regarding procedural unconscionability, the California Supreme Court has stated:

“[T]here are degrees of procedural unconscionability. At one end of the spectrum are contracts that have been freely negotiated by roughly equal parties, in which there is no procedural unconscionability . . . . Contracts of adhesion that involve surprise or other sharp practices lie on the other end of the spectrum. [Citation.] Ordinary contracts of adhesion, although they are indispensable facts of modern life that are generally enforced (see Graham v. Scissor–Tail, Inc. (1981) 28 Cal.3d 807, 817–818, 171 Cal.Rptr. 604, 623 P.2d 165), contain a degree of procedural unconscionability even without any notable surprises, and ‘bear within them the clear danger of oppression and overreaching.’ (Id. at p. 818 [171 Cal.Rptr. 604, 623 P.2d 165].)” (Gentry v. Superior Court (2007) 42 Cal.4th 443, 469, 64 Cal.Rptr.3d 773, 165 P.3d 556.)

(Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244.)

Generally, in the employer-employee context, there is unequal bargaining power. (See Amendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 115 [“in the case of preemployment arbitration contracts, the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for 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 requirement.”] Plaintiff contends the agreement was provided as a condition of employment.

The agreement is one of adhesion; there is a low degree of procedural unconscionability here. But this alone does not render the arbitration agreement unconscionable. To find the agreement unenforceable, the degree of substantive unconscionability must be high. (See Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 981.)

            Plaintiff asserts that the agreement is substantively unconscionable because it fails to address allocation of costs of arbitration, fails to provide all remedies that would be available in court, and fails to require a neutral arbitrator. The agreement states that a retired judge shall be the arbitrator and that the arbitrator must resolve all disputes accordingly to the law. It does not limit Plaintiff’s statutory remedies. The agreement is not substantively unconscionable.

2. PAGA Claims

Plaintiff’s individual PAGA claims must be arbitrated under the Supreme Court’s decision in Viking River Cruises v. Moriana, 142 S.Ct. 1906 (2022).

The Court will defer ruling on the request to dismiss the representative PAGA claims pending the California’s Supreme Court opinion in Adolph v. Uber Technologies, Case No. S27467.  The Supreme Court granted review on July 20, 2022; on August 1, 2022, it set the issue to be briefed as: “Whether an aggrieved employee who has been compelled to arbitrate claims under the Private Attorneys General Act (PAGA) that are ‘premised on Labor Code violations actually sustained by’ the aggrieved employee…maintains statutory standing to pursue ‘PAGA claims arising out of events involving other employees’ in court or in any other forum the parties agree is arbitrable.” 

            Defendant’s motion to compel arbitration is GRANTED in part.