Judge: Maurice A. Leiter, Case: 23STCV04377, Date: 2023-12-12 Tentative Ruling

Case Number: 23STCV04377    Hearing Date: December 12, 2023    Dept: 54

Hearing Date: December 12, 2023

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Carroll, Kelly, Trotter & Franzen, A Law Corporation

Responding Party: Plaintiff Ashley Ingraham

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 May 9, 2023, Plaintiff filed the operative first amended complaint against Defendant, asserting seven causes of action for Labor Code violations.

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

Defendant moves to compel arbitration based on the Arbitration Agreement executed by Plaintiff on April 16, 2018. (Decl. Bischak, Exh. 1.) The agreement provides, “I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by Caroll, Kelly, Trotter, Franzen, McBride & Peabody, that all disputes that cannot be resolved by informal internal resolution which might arise out of employment with Carroll, Kelly, Trotter, Franzen, McBride & Peabody, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules of the American Arbitration Association. This application contains the entire agreement between the parties with regard to dispute resolution, and there are no other agreements as to dispute resolution, either oral or written.” (Id.)

Defendant has 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. Unconscionability

Plaintiff asserts that the arbitration agreement is procedurally unconscionable because it is an adhesion contract, and Plaintiff was rushed into signing it. 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.”]

The Court finds a very low degree of procedural unconscionability here, as the agreement is one of adhesion. 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 does not contain a jury waiver, it lacks mutuality, and it does not specify which AAA rules apply. That the agreement does not contain a jury waiver or specify the governing AAA rules does not render the agreement substantively unconscionable. The agreement states that all disputes must be submitted to arbitration under the AAA rules; this does not imply that the agreement is unfair or overly one-sided. Similarly, the agreement does not lack mutuality. It states that all disputes relating to Plaintiff’s employment must be submitted to arbitration. This implies that any dispute related to Plaintiff’s employment, regardless of who has brought the dispute, must be arbitrated. The agreement is not unconscionable.

2. Waiver

Plaintiff asserts Defendant has waived the right to arbitrate because it did not indicate it would seek arbitration in its case management statement or answer. This is insufficient to establish waiver.

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