Judge: Maurice A. Leiter, Case: 23STCV26720, Date: 2024-03-06 Tentative Ruling

Case Number: 23STCV26720    Hearing Date: March 6, 2024    Dept: 54

Hearing Date: March 6, 2024

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Sundae, Inc.

Responding Party: Plaintiff Wendy Il’ Grande

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 November 1, 2023, Plaintiff filed a complaint against Defendant, asserting causes of action for pregnancy discrimination 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

Defendant Sundae, Inc. moves to compel arbitration based on the arbitration provision in an offer letter executed by Plaintiff on June 16, 2020. (Decl. Kirwen, Exh. A.) The agreement provides, “You and [Sundae] agree to submit to mandatory binding arbitration any and all claims arising out of or related to your employment with [Sundae] and the termination thereof, including, but not limited to, claims for unpaid wages, wrongful termination, torts, stock or stock options or other ownership interest in [Sundae], and/or discrimination (including harassment) based upon any federal, state or local ordinance, statute, regulation or constitutional provision.” (Id.) This action arises from Plaintiff’s employment with Defendant.

Defendant has met its burden to establish the existence of 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. Plaintiff asserts Defendant required Plaintiff to sign the agreement 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 low degree of procedural unconscionability here; there is unequal bargaining power and the agreement was a condition of Plaintiff’s employment. This low degree of procedural unconscionability does not render the arbitration agreement unconscionable; to find the agreement unenforceable, there must be a high degree of substantive unconscionability. (See Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 981.)

Plaintiff asserts the agreement is substantively unconscionable because it requires arbitration take place in San Francisco, it exempts claims Defendant would bring against Plaintiff, and it does not provide for adequate discovery. These issues do not render the agreement substantively unconscionable. The agreement itself puts no limits on discovery, and the venue provision has been waived by Defendant. That Defendant may seek injunctive relief in Court regarding a breach of the confidentiality agreement also does not render the agreement unconscionable. This right arises from a different agreement and is capable of being severed.

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