Judge: Maurice A. Leiter, Case: 23STCV29583, Date: 2024-05-06 Tentative Ruling

Case Number: 23STCV29583    Hearing Date: May 6, 2024    Dept: 54

Hearing Date: May 6, 2024

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendants CPE HR, Inc., Chestnut Ridge Post Acute LLC, and Lorna Del Rosario

Responding Party: Plaintiff Donyae Haley

T/R:     DEFENDANTS. 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 4, 2023, Plaintiff sued Defendants, asserting 12 causes of action for Labor Code and FEHA violations, retaliation, 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

Defendants move to compel arbitration based on the arbitration agreement executed by Plaintiff on October 26, 2022. (Decl. Cayabyab, Exh. 2.) The agreement provides, “Employee, the Company, and CPE HR agree that any claim, dispute, and/or controversy that Employee may have against the Company, CPE HR, or Company Entities (defined below), or that the Company or CPE HR may have against Employee, shall be submitted to and determined exclusively by binding arbitration.” (Id.) The agreement states that it is governed by the FAA.

Defendants have met their burden to establish an agreement to arbitrate. The burden shifts to Plaintiff to establish any defenses to enforcement.

B. Enforceability of Agreement

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.”]

A low degree of procedural unconscionability exists 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 is infinite in time and scope, it requires Plaintiff to arbitrate claims against company entities and agents without requiring that the entities and agents arbitrate claims against Plaintiff, and it contains a PAGA and class waiver.

The agreement is not infinite in scope. Section 2 of the agreement, titled “Scope of Agreement” lays out the types of claims that are subject to the agreement. The claims listed are employment related. And the second to last paragraph of the agreement states in all capital letters and in bold font “EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT REQUIRES THE EMPLOYEE AND THE COMPANY OR CPE HR TO ARBITRATE ANY AND ALL DISPUTES THAT ARISE OUT OF EMPLOYEE’S EMPLOYMENT WITH COMPANY, AND/OR RELATIONSHIP WITH CPE HR.”

If any agents of Defendants filed suit against Plaintiff for employment related claims, Plaintiff would be entitled to compel arbitration against them under equitable estoppel or third-party beneficiary theories. The PAGA and class waiver are capable of being severed from the agreement. Plaintiff has not established that the agreement is highly substantively unconscionable.

Defendants’ motion to compel arbitration is GRANTED. The action is STAYED.