Judge: Maurice A. Leiter, Case: 22STCV39088, Date: 2023-05-02 Tentative Ruling

Case Number: 22STCV39088    Hearing Date: May 2, 2023    Dept: 54

Hearing Date: May 2, 2023

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Universal Protection Services, LP

Responding Party: Plaintiff Enrique Perez

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 December 16, 2022, Plaintiff Enrique Perez sued Defendants Universal Protection Services, LP and John Uribe, asserting causes of action for FEHA violations, wrongful termination, and assault.

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 Policy and Agreement executed by Plaintiff on February 12, 2020. (Decl. Grzywacz, Exh. A.) The agreement provides, “To the fullest extent authorized by law, the Parties mutually

agree to the resolution by binding arbitration of all claims or causes of action that the Employee may have against the Company, or the Company against Employee, which could be brought in a court of law (collectively ‘claims’), unless otherwise set forth in this Agreement.” (Id.) The agreement applies to “claims for discrimination and/or harassment; claims for wrongful termination; claims relating to any offers, promotions, or transfers made by the Company; claims for retaliation . . . claims for violation of any law, statute, regulation, ordinance or common law . . .and any other applicable federal, state, or local laws relating to discrimination in employment, leave...” (Id.)

The agreement states that it is governed by the FAA.

Defendant states that Plaintiff electronically signed this agreement. In his declaration in opposition, Plaintiff admits that he clicked through and acknowledged the various documents, which included a document clearly titled “Arbitration Policy and Agreement.” He does not deny that he electronically signed, stating only that he does not remember agreeing to use of an electronic signature. Plaintiff then argues that Defendant has not provided evidence showing how they know Plaintiff executed the agreement. In reply, Defendant presents the supplemental declaration of Peggy Grzywacz, who sets forth the process for execution of online documents. This is sufficient to establish an agreement to arbitrate.

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

B. Enforceability of Agreement

1. Armendariz Factors

            Plaintiff asserts the agreement is unenforceable because it does not allow for adequate discovery, restricts Plaintiff’s remedies, and fails to provide for judicial review of the arbitrator’s decision. The Court disagrees. The agreement allows the arbitrator to determine adequate discovery, allows Plaintiff to seek injunctive relief in Court and allows judicial review (“The arbitrator's decision regarding the claims shall be final and binding upon the Parties, unless a court of competent jurisdiction finds that the arbitrator manifestly disregarded the applicable law.”)

2. Unconscionability

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

“[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 asserts the agreement is procedurally unconscionable because it was presented as a condition of employment and was hidden within other documents. Defendants argue that the agreement is not procedurally unconscionable because it contains an opt-out provision.

            The Court finds a very low degree of procedural unconscionability exists here. Though the agreement was not actually a condition of employment, Plaintiff contends the agreement was presented as a condition of employment. This low degree of procedural unconscionability 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 allows for unilateral modification by Defendant. The agreement allows Defendant to modify the agreement with 30 days’ notice and does not apply to any claims made before those 30 days elapses. This is not so one-sided as to render the agreement substantively unconscionable. The employee is provided notice and the opportunity to make claims before the modification would take effect. The agreement is enforceable.

            Defendant’s motion to compel arbitration is GRANTED. The action is STAYED.