Judge: Maurice A. Leiter, Case: 22STCV32158, Date: 2023-02-15 Tentative Ruling

Case Number: 22STCV32158    Hearing Date: February 15, 2023    Dept: 54

Hearing Date: February 15, 2023

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Cacique Foods, LLC

Responding Party: Plaintiff James Besaw

T/R:    DEFENDANT’S MOTION TO COMPEL ARBITRATION IS GRANTED. THE ACTION IS STAYED.

DEFENDANT TO NOTICE.

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 October 3, 2022, Plaintiff James Besaw sued Defendant Cacique Foods, LLC alleging Labor Code violations, FEHA violations and wrongful termination.

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 “Arbitration Agreement” executed by Plaintiff on January 15, 2020. (Decl. Goldman, Exh. A.) The agreement provides, ““The parties to this Agreement agree to arbitrate any and all disputes, claims, or controversies (“Claims”) they may have against each other, . . . which arise from or relate to the employment relationship between Employee and the Company or the termination thereof.” (Id.) This action arises from Plaintiff’s employment with Defendant. The agreement states that it is governed by the FAA.

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

B. Enforceability of Agreement

1. Unconscionability

Plaintiff asserts that the arbitration agreement is procedurally unconscionable as it is an adhesion contract. The California Supreme Court has held:

“[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, there is unequal bargaining power in the employer-employee context. (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.”]

Due to the general nature of employment arbitration agreements, the agreement is one of adhesion and a low degree of procedural unconscionability here.

But this does not in itself 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 requires Plaintiff to waive the right to equitable tolling, it prohibits consolidation of Plaintiff’s individual claims, and it precludes judicial review of the arbitration award. These assertions are contrary to the language of the agreement. The agreement states that (1) demands for arbitration must be made within the statute of limitations or they are waived; (2) the employee waives class claims; and (3) the arbitration award may be confirmed as a judgment. The agreement does not contain waivers of equitable tolling, consolidation, and judicial review. It is enforceable.

            Defendant’s motion to compel arbitration is GRANTED.