Judge: Maurice A. Leiter, Case: 23STCV20400, Date: 2023-12-14 Tentative Ruling

Case Number: 23STCV20400    Hearing Date: December 14, 2023    Dept: 54

Hearing Date: December 14, 2023

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendants National University, Melissa Diaz, Alan Condington, Sharlene Tracana, Alejandra Rojas and Julia Harvey

Responding Party: Plaintiff Amelia Joaquim Rowell

T/R:     THE COURT ORDERS AN EVIDENTIARY HEARING ON THE ISSUE OF ASSENT TO THE ARBITRATION AGREEMENT ON JANUARY 19, 2024 AT 9:00. THE CASE MANAGEMENT CONFERENCE IS CONTINUED TO THAT DATE.

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 August 24, 2023, Plaintiff sued Defendants, asserting eleven causes of action for FEHA violations, wrongful termination, and retaliation.

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

Defendants moves to compel arbitration based on the Mutual and Voluntary Agreement to Arbitrate Claims executed by Plaintiff on March 7, 2022. (Decl. Oshiro, Exh. A.) The agreement provides, ““The University and its brands, concepts, or affiliates (collectively and separately, University) and I voluntarily enter into this Mutual Agreement to Arbitrate Claims (Agreement). Except as stated herein, the University and I agree to use binding arbitration as the means to resolve all disputes that may arise out of or relate to my application for employment or employment with the University, including termination of employment.” (Id.) Defendant provides the declaration of HR manager, Vanessa Oshiro, who states Plaintiff executed the agreement via Adobe Sign with a unique link and password.

In opposition, Plaintiff disputes that she executed the agreement, declaring that she “never received, saw, consented to, nor signed an arbitration agreement” during her employment. (Decl. Rowell 3.) Plaintiff also asserts that the agreement should not be enforced because it is unconscionable and illegal.              

Defendant contends that it can authenticate Plaintiff’s signature on the agreement. As there is a factual dispute concerning whether Plaintiff signed the arbitration agreement, the Court will set an evidentiary hearing on the issue of assent to the agreement.

B. Enforceability of Agreement

1. Unconscionability

Plaintiff asserts that the arbitration agreement is procedurally unconscionable because it is an adhesion contract. Defendants assert it is not an adhesion contract because it was not presented as a condition of employment. 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 exists here as there is unequal bargaining power. 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 subjects Plaintiff to unusual fees, fails to provide adequate discovery, and contains jury and class action waivers. These do not render the agreement substantively unconscionable. The agreement does not require Plaintiff pay unusual fees nor does it restrict discovery. The jury and class action waivers do not affect Plaintiff’s claims or make the agreement unfairly one-sided. Assuming Plaintiff assented to the agreement, it is not unconscionable.

2. Illegality

Plaintiff argues the agreement should not be enforced because it contains a provision extending the deadlines to pay arbitration fees provided in CCP § 1281.97. This argument fails because subsection (a)(2) allows parties to agree to alternative deadlines.