Judge Michael P. Linfield, Case Number: 22STCV34480, Date: 2023-12-06 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV34480, Date: 2023-12-06 Tentative Ruling

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The Motion is GRANTED. This matter is STAYED as to Defendant APRO, LLC pending the conclusion of arbitration.

On October 26, 2022, Plaintiff Anita Rius filed her Complaint against Defendants APRO, LLC; APRO Distribution LLC; and Joseph Juliano. The causes of action arise from Plaintiff’s employment by Defendants.

On February 7, 2023, Defendant APRO, LLC (“Defendant”) filed its Answer to the Complaint.

On August 30, 2023, Defendant filed its Motion to Compel Arbitration and Motion to Stay Plaintiff’s Complaint for Damages. In support of its Motion, Defendant concurrently filed: (1) Memorandum of Points and Authorities; (2) Declaration of Nolan McCready; (2) Declaration of Judy Chu; and (3) Proposed Order.

On October 23, 2023, Plaintiff filed her Opposition to the Motion. In support of her Opposition, Plaintiff concurrently filed: (1) Declaration of Anita Rius; (2) Declaration of Rosa Vigil-Gallenberg; (3) Objections to Evidence; (4) Proposed Order; and (5) Proof of Service.

On October 27, 2023, Defendant filed its Reply regarding the Motion. In support of its Reply, Defendant concurrently filed: (1) Evidentiary Objections to the Declaration of Anita Rius; and (2) Response to Plaintiff’s Evidentiary Objections.

Plaintiff filed evidentiary objections to the Declaration of Judy Chu. The following are the Court’s rulings on these objections.

Objection
1		OVERRULED
2		OVERRULED
3		OVERRULED
4		OVERRULED
5		OVERRULED

Defendant filed evidentiary objections to the Declaration of Anita Rius. The following are the Court’s rulings on these objections.

Objection
1		OVERRULED
2		OVERRULED
3		OVERRULED
4		OVERRULED
5		OVERRULED
6		OVERRULED
7		OVERRULED
8		OVERRULED
9		OVERRULED
10		OVERRULED
11		OVERRULED
12		OVERRULED
13		OVERRULED
14		OVERRULED
15		OVERRULED

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.)

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that 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 [unless it makes certain determinations].” (Code Civ. Proc., § 1281.2.)

“Under both federal and state law, arbitration agreements are valid and enforceable, unless they are revocable for reasons under state law that would render any contract revocable. . . . Reasons that would render any contract revocable under state law include fraud, duress, and unconscionability.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239, citations omitted.)

“The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence the existence of an arbitration agreement.¿The party opposing the petition bears the burden of establishing a defense to the agreement's enforcement by a preponderance of the evidence.¿In determining whether there is a duty to arbitrate, the trial court must, at least to some extent, examine and construe the agreement.” (Tiri, supra, at p. 239.)

Defendant submits a document titled “Comprehensive Agreement Employment At-Will and Arbitration” (“Arbitration Agreement”). (Decl. Chu, Exh. A.) The Arbitration Agreement is purportedly signed by Plaintiff on November 7, 2014, although Plaintiff does not recall seeing, reading, or signing the Arbitration Agreement. (Decl. Rius, ¶ 3.)

“1. It is hereby agreed by and between Anita M. Rius (hereinafter ‘Employee’) and Company (Employer) that the Company or the Employee can terminate the employment and compensation of Employee at any time, with or without cause and/or with or without notice, at the option of the Company or the Employee.

“2. I further agree and acknowledge that the Company and I will utilize binding arbitration to resolve all disputes that may arise out of the employment context. Both the Company and I agree that any claim, dispute, and/or controversy that either I may have against the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) or the Company may have against me, arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act, in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. sec 1280 et seq., including section 1283.05 and all of the Act's other mandatory and permissive rights to discovery). Included within the scope of this Agreement are all disputes, whether based on tort, contract, statute (including, but not limited to, any claims of discrimination and harassment, whether they be based on the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, as amended, or any other state or federal law or regulation), equitable law, or otherwise, with exception of claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical and disability benefits under the California Workers' Compensation Act, Employment Development Department claims, or as otherwise required by state or federal law. However, nothing herein shall prevent me from filing and pursuing proceedings before the California Department of Fair Employment and Housing, or the United States Equal Employment Opportunity Commission (although if I choose to pursue a claim following the exhaustion of such administrative remedies, that claim would be subject to the provisions of this Agreement). Further, this Agreement shall not prevent either me or the Company from obtaining provisional remedies to the extent permitted by Code of Civil Procedure Section 1281.8 either before the commencement of or during the arbitration process. In addition to any other requirements imposed by law, the arbitrator selected shall be a retired California Superior Court Judge, or otherwise qualified individual to whom the parties mutually agree, and shall be subject to disqualification on the same grounds as would apply to a judge of such court. All rules of pleading (including the right of demurrer), all rules of evidence, all rights to resolution of the dispute by means of motions for summary judgment, judgment on the pleadings, and judgment under Code of Civil Procedure Section 631.8 shall apply and be observed. Resolution of the dispute shall be based solely upon the law governing the claims and defenses pleaded, and the arbitrator may not invoke any basis (including but not limited to, notions of ‘just cause’) other than such controlling law. The arbitrator shall have the immunity of a judicial officer from civil liability when acting in the capacity of an arbitrator, which immunity supplements any other existing immunity. Likewise, all communications during or in connection with the arbitration proceedings are privileged in accordance with Cal. Civil Code Section 47(b). As reasonably required to allow full use and benefit of this agreement's modifications to the Act's procedures, the arbitrator shall extend the times set by the Act for the giving of notices and setting of hearings. Awards shall include the arbitrator's written reasoned opinion. I understand and agree to this binding arbitration provision, and both I and the Company give up our right to trial by jury of any claim I or the Company may have against each other.”

Defendant moves the Court to compel Plaintiff’s claims to arbitration and stay this action pending completion of arbitration. (Motion, p. 7:9–10.)

Defendant argues: (1) that the Federal Arbitration (FAA) applies to the Arbitration Agreement and preempts state law; (2) that the Motion should be granted because a valid agreement to arbitrate exists; (3) that the Arbitration Agreement is neither procedurally nor substantively unconscionable and therefore must be enforced; and (4) that the case should be stayed upon filing of the Motion and pending the conclusion of arbitration. (Motion, pp. 9:20, 11:8–9, 14:11–12, 16:26–27.)

Plaintiff opposes the Motion, arguing: (1) that there is no enforceable agreement that compels Plaintiff to arbitrate these claims; (2) that Defendant has not met its burden to authenticate the Arbitration Agreement and the “New Hire Checklist – Station Employees” document; (3) that Defendant has not met its burden to prove an arbitration agreement was formed among the Parties; (4) that the Arbitration Agreement is unconscionable, both procedurally and substantively; (5) that the Arbitration Agreement was not provided in Spanish, evidencing a high degree of procedural unconscionability; and (6) that the Arbitration Agreement is permeated with unconscionability. (Opposition, pp. 5:14–15, 6:2–3, 7:16–17, 9:1, 9:22–23, 10:18–19, 11:1–2, 11:16, 13:4.)

In its Reply, Defendant argues: (1) that Plaintiff signed a valid agreement to arbitrate claims against Defendant; (2) that Plaintiff does not deny that the Arbitration Agreement is authentic and has made no effort to prove its falsity; (3) that an arbitration agreement exists between Plaintiff and Defendant; (4) that the Arbitration Agreement is neither procedurally nor substantively unconscionable; (5) that Plaintiff has not presented any evidence of oppression, surprise, or fraud; and (6) that Plaintiff does not claim she is unable to read or comprehend English. (Reply, pp. 2:14–16, 3:24–25, 5:1, 5:17–18, 7:4.)

The evidence presented to the Court supports a determination that there is an arbitration agreement.

The purported Arbitration Agreement has been authenticated by Declarant Judy Chu, who is the Vice President of Human Resources with Non-Party Phillips 66, is on assignment working with Defendant, is familiar with Defendant’s record-keeping procedures and historical practices, has access to and familiarity with Defendant’s personnel records, and has personally reviewed Plaintiff’s personnel file. (Decl. Chu, ¶¶ 2–3.)

The Arbitration Agreement appears to be electronically signed by Plaintiff on November 7, 2014. (Decl. Chu, Exh. A.)

Plaintiff does not claim that she did not sign the Arbitration Agreement. Rather, she only declares that she does not recall seeing, reading, or signing the Arbitration Agreement. (Decl. Rius, ¶ 4.)

It is true that Defendant’s signature does not appear on the Arbitration Agreement. However, “[a] party who has signed a contract may be compelled specifically to perform it, though the other party has not signed it, if the latter has performed, or offers to perform it on his part, and the case is otherwise proper for enforcing specific performance.” (Civ. Code, § 3388; see Serafin v. Balco Props. Ltd., LLC (2015) 235 Cal.App.4th 165, 177, holding that Civil Code section 3388 applies in the context of arbitration agreements.)

“Agreements to arbitrate may be invalidated if they are found to be unconscionable.” (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 713, citations omitted.)

“Unconscionability consists of both procedural and substantive elements. The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power. Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided. (Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC (2012) 55 Cal.4th 223, 246, citations omitted.)

“‘The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.’ But they need not be present in the same degree. ‘Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.’ In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa. (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114, [cleaned up], italics in original, abrogated in part on other grounds by AT&T Mobility LLC v. Concepcion (2010) 565 U.S. 333.).)

“The party resisting arbitration bears the burden of proving unconscionability.” (Pinnacle, supra, 55 Cal.4th at p. 247, citation omitted.)

“Moreover, courts are required to determine the unconscionability of the contract ‘at the time it was made.’” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 920, quoting Civ. Code, § 1670.5.)

“Unconscionability is ultimately a question of law.” (Patterson v. ITT Consumer Fin. Corp. (1993) 14 Cal.App.4th 1659, 1663, citation omitted.)

“[P]rocedural unconscionability requires oppression or surprise. Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form.” (Pinnacle, supra, 55 Cal.4th at p. 247 [cleaned up].)

“The procedural element of an unconscionable contract generally takes the form of a contract of adhesion . . . .” (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071.)

Among other things, Plaintiff declares: (1) that at the time she was hired, Plaintiff was presented with over 100 pages of documents to sign, all in one day; (2) that as Plaintiff was attempting to read these documents at Defendant’s place of business, she was told by a human resources employee words to the effect of “we are too busy for you to read everything, just sign where indicated”; (3) that Plaintiff was not given the opportunity to review the documents or take them to consult with a lawyer; (4) that these documents included the Arbitration Agreement; (5) that Plaintiff did not have any role in drafting the Arbitration Agreement; (6) that Plaintiff was not informed or the terms of the Arbitration Agreement nor told they were negotiable or could be modifiable; (7) that Plaintiff did not know what arbitration was until March 2023 or what rights she was waiving if she was to sign the Arbitration Agreement; (8) that Plaintiff’s primary language is Spanish; (9) that Plaintiff’s formal education was provided in Mexico in Spanish; (10) that Plaintiff routinely communicated with her co-workers in Spanish while employed with Defendant; (11) that Plaintiff was not provided a copy of the Arbitration Agreement in Spanish; and (12) that Defendant did not translate the Arbitration Agreement into Spanish for Plaintiff. (Decl. Rius, ¶¶ 3–7.)

Defendant argues that the Arbitration Provision is not procedurally unconscionable because there is “no evidence of oppression, surprise, or fraud” and “Plaintiff does not claim she is unable to read or comprehend English.” (Reply, pp. 5:18, 7:4.)

“Absent unusual circumstances, a contract offered on a take-it-or-leave-it is deemed adhesive, and a commercial transaction conditioned on a party’s acceptance of such a contract is deemed procedurally unconscionable.” (Vasquez v. Greene Motors, Inc. (2013) 214 Cal.App.4th 1172, 1184.)

The Arbitration Agreement is clearly a classic take-it-or-leave-it contract of adhesion. Furthermore, Defendant did not give Plaintiff a meaningful choice or opportunity to negotiate the document.

As to the issue of Defendant providing Plaintiff with a Spanish-language translation of the Arbitration Agreement, the Court has not been presented with sufficient evidence to determine that this was procedurally unconscionable. Plaintiff has submitted her declaration in English, without declaring that it was originally submitted in Spanish and then translated. Moreover, Plaintiff has not claimed that she cannot read or comprehend English.

“Substantive unconscionability focuses on overly harsh or one-sided results. In assessing substantive unconscionability, the paramount consideration is mutuality.” (Fitz, supra, 118 Cal.App.4th at p. 723 [cleaned up].)

Plaintiff argues that the Arbitration Agreement is substantively unconscionable because: (1) the Arbitration Agreement lacks mutuality because it binds Plaintiff and none of the Defendants, similar to the arbitration agreement in Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74; and (2) the Arbitration Agreement would require Plaintiff to arbitrate her claims against unnamed Parties which she did not agree to arbitrate with. (Opposition, pp. 11:25–26, 12:11–24, 13:1.)

Defendant argues that the Arbitration Agreement is not substantively unconscionable. (Reply, p. 5:1.)

The Arbitration Agreement binds both Plaintiff and Defendant APRO, LLC. Consider the explicit mutually-binding language of the following clauses:

· “Both the Company and I agree that any claim, dispute, and/or controversy that either I may have against the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) or the Company may have against me, arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act, in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. sec 1280 et seq., including section 1283.05 and all of the Act's other mandatory and permissive rights to discovery).”

· “Further, this Agreement shall not prevent either me or the Company from obtaining provisional remedies to the extent permitted by Code of Civil Procedure Section 1281.8 either before the commencement of or during the arbitration process.”

These clauses are mutual. The Court’s review of the rest of the Arbitration Agreement does not uncover any clauses that either lack explicit mutuality or produce one-sided results. (See Nunez v. Cycad Mgmt. LLC (2022) 77 Cal.App.5th 276, 285–286, holding that an arbitration agreement is substantively unconscionable when it empowers arbitrator to impose costs on employee that would not have been incurred in court and to limit discovery).

In Carmona, the Court of Appeal found that an arbitration agreement was substantively unconscionable because: (1) it lacked mutuality as to which types of claims could be brought in arbitration, benefiting the employer in the types of claims it would normally bring but harming the employees in the types of claims they would normally bring; (2) it allowed the employer to recover fees and costs whenever they instituted litigation, not just when they prevailed; (3) it presumed harm to the employer from disclosure of breach of the confidentiality sub-agreement, but did not presume any similar harms to the employee; and (4) it required employees to discuss with the employer any problems relating to the employment before discussing those issues with outsiders, but did not have a similar provision requiring employers to do the same. (Carmona, 226 Cal.App.4th at pp. 86–89.)

None of those issues are present in the Arbitration Agreement in this case. Rather, the Arbitration Agreement is mutual in that it allows both Plaintiff and Defendant to arbitrate “any claim, dispute, and/or controversy” that they might have against each other. The Arbitration Agreement does not include clauses for additional fees or costs, presumed harms, or pre-arbitration requirements — much less one-sided versions of such clauses.

Further, as stated above, Defendant is able to enforce the Arbitration Agreement despite not having signed it. (Civ. Code, § 3388; see Serafin, supra, 235 Cal.App.4th at p. 177.)

Finally, the only clause involving parties beside Plaintiff and Defendant is a parenthetical in paragraph 2 of the Arbitration Agreement, which includes arbitration “against the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans)”. (Decl. Chu, Exh. A, ¶ 2.) It is true that there is a lack of mutuality here, as those parties have not signed the Arbitration Agreement and have not agreed to be bound by it. However, this lack of mutuality is unlikely to produce overly harsh or one-sided outcomes. This is because all these claims would still have to go to arbitration. There is no benefit to those parties since they could compel Plaintiff to arbitrate the relevant claims and, because they are clearly third-party beneficiaries to the Arbitration Agreement, Plaintiff could also compel them to arbitrate those same claims.

The Court finds that the Arbitration Agreement is not substantively unconscionable.

Because the Arbitration Agreement is not substantively unconscionable, the Court does not find that the Arbitration Agreement is unenforceable on the basis of unconscionability.

Plaintiff has not met its burden to show that a valid defense exists to enforcement of the arbitration agreement.

The Motion is GRANTED. This matter is STAYED as to Defendant APRO, LLC pending the conclusion of arbitration. The Court schedules a post-arbitration Status Conference for January 14, 2025. The parties are to file a Joint Status Conference Report 5 court days prior to the status conference hearing.