Judge: Michael Shultz, Case: 22CMCV00482, Date: 2023-06-29 Tentative Ruling
Case Number: 22CMCV00482 Hearing Date: June 29, 2023 Dept: A
22CMCV00482 Gisel Vazquez v. Dermalogica, LLC
[TENTATIVE]
ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDING
I.
BACKGROUND
The
complaint alleges that Defendant discriminated against Plaintiff and terminated
her employment based on her disability and religious beliefs. Plaintiff alleges
claims for discrimination in violation of the Federal Employment and Housing
Act, wrongful termination and wage violations under the Labor Code.
II.
ARGUMENTS
Defendant argues that
Plaintiff agreed in writing to submit any claims arising out of her employment
to binding arbitration under the Federal Arbitration Act and the California
Arbitration Act. The arbitration agreement is not unconscionable. The Court
should stay the action while the arbitration is pending.
In opposition,
Plaintiff argues that Defendant has not met its burden of showing the existence
of a valid arbitration agreement. Plaintiff argues that after her hiring, Defendant
issued a new employment manual that superseded the prior manual. Plaintiff did
not sign the arbitration agreement in the new manual. Since the prior manual
has been superseded, there is no operative arbitration agreement to which
Plaintiff is bound. Plaintiff also argues that Defendant waived the right to
invoke arbitration.
In reply to the
opposition, Defendant argues that Plaintiff did not serve the opposition on
Defendant, therefore, the Court should not consider it. The 2019 Arbitration
has never been revoked. Defendant amended its handbook in 2022, which affected Defendant’s
policies stated therein. Even if Defendant did not assert in its answer that
Plaintiff agreed to arbitrate the matter, Plaintiff has not shown any prejudice
arising from that failure, or from the purported “delay” in making the motion.
Therefore, Defendant did not waive its right to arbitrate.
III.
LEGAL STANDARDS
The court can order a matter to arbitration if
it determines that an agreement to arbitrate exists unless the right to compel
has been waived or grounds exist for the revocation of the agreement. (Code Civ. Proc., § 1281.2.)
The petitioning party’s burden is to establish that a valid arbitration
agreement exists by a preponderance of evidence while responding party’s burden
is to establish a defense to enforcement. (Molecular Analytical Systems v. Ciphergen Biosystems,
Inc. (2010) 186 Cal.App.4th 696, 705.)
IV.
DISCUSSION
A.
The court considers the opposition
over Defendant’s objection.
In order to consider
the merits of the motion, the court has considered Plaintiff’s opposition
although Defendant denied being served by email as reflected in the proof of
service. Defendant was able to obtain and review the opposition electronically and
prepare a reply, which the court has considered. Therefore, Defendant did not
suffer any prejudice. (Mann v. Cracchiolo (1985)
38 Cal.3d 18, 30.)
B.
Plaintiff has not demonstrated a
defense to enforcement of the arbitration agreement.
Plaintiff does not
dispute signing the arbitration agreement on May 6, 2019. (Decl. of Gisel Vazquez, ¶ 2.) The scope
of the agreement broadly includes arbitration of “any disputes or claims
between us that arise out of or relate to my … employment or separation from
employment” such as wrongful termination, retaliation, violation of public
policy, discrimination, and wage claims for payments and penalties among many
other claims specifically described. (Decl. of Viet To, Ex. A, ¶ 2.) Therefore,
the claims asserted in Plaintiff’s complaint is encompassed by the agreement’s
scope.
While there is no
dispute that Defendant amended its handbook, there is no evidence to support
the contention that the 2019 Arbitration agreement was cancelled or revoked by
the 2022 version of Defendant’s handbook. The 2022 handbook states that “[t]he policies
and procedures set forth in this Handbook supersede any and all versions of
prior policies and procedures concerning the same subject matter.” (Opp., Ex.
2, .pdf p.67.) It does not expressly revoke or cancel the 2019 arbitration
agreement.
The arbitration
agreement states that it survives the termination of employment and “can only
be revoked or modified by a writing signed by the Parties.” (To Decl., Ex. A, ¶ 12.) Plaintiff
has not submitted such evidence.
C.
Plaintiff has not demonstrated
that Defendant waived the right to arbitrate.
Waiver of a contractual
right to arbitrate is “not to be lightly inferred, and the "party seeking
to establish a waiver bears a heavy burden of proof." (Gloster
v. Sonic Automotive, Inc. (2014) 226 Cal.App.4th 438, 447.) The court may
consider a number of factors to determine the existence of a waiver such as “(1)
whether the party's actions are inconsistent with the right to arbitrate; (2)
whether ‘the litigation machinery has been substantially invoked’ and the
parties ‘were well into preparation of a lawsuit’ before the party notified the
opposing party of an intent to arbitrate; (3) whether a party either requested
arbitration enforcement close to the trial date or delayed for a long period
before seeking a stay; (4) whether a defendant seeking arbitration filed a
counterclaim without asking for a stay of the proceedings; (5) ‘whether
important intervening steps [e.g., taking advantage of judicial discovery
procedures not available in arbitration] had taken place’; and (6) whether the
delay ‘affected, misled, or prejudiced’ the opposing party.” (Gloster
at 448.)
Plaintiff has not shown
that Defendant “unreasonably delayed” in demanding arbitration. A party who has
not demanded arbitration within a reasonable time as specified in the
agreement, is deemed to have waived the right to arbitrate. (Spear v. California State Auto. Assn. (1992) 2 Cal.4th 1035, 1043.)
A “reasonable time” is a question of fact depending on the parties’ situation;
however, the court can consider any prejudice suffered by the opposing party
because of the delay. (Id.)
Plaintiff has not
demonstrated that she suffered any prejudice from the purported delay. Plaintiff
commenced this action on November 3, 2022, and Defendant answered in January
12, 2023. While the answer does not assert the existence of an arbitration
agreement as a defense to enforcement, Defendant’s Case Management Conference
Statement filed on May 1, 2023, indicates Defendant’s intent to file a motion
to compel arbitration. (CMC, ¶ 15.) Finally, the
failure to assert arbitration as an affirmative defense does not alone establish
a waiver. (Rush v. Oppenheimer & Co. (2d Cir. 1985) 779 F.2d
885, 889 [“Nor does defendants' service of
an answer that contained thirteen affirmative defenses but failed to raise the
agreement to arbitrate, constitute a waiver of arbitration.”].)
Plaintiff asserts that Defendant’s
participation in discovery constitutes a waiver of its right to arbitrate.
Plaintiff argues that Defendant responded to Plaintiff’s discovery. (Opp.
7:12-13.) Defendant served discovery requests and produced documents in
response to Plaintiff’s request. (Reply Decl. of Laura Birnbaum, ¶ 2.) Plaintiff has not demonstrated any prejudice suffered from Defendant’s
disclosures made in discovery, or that Defendant’s discovery requests
constitutes a “substantial” invocation of the “litigation machinery.” (Gloster,
supra at 448.)
Plaintiff’s reliance on
Guess?, Inc. v. Superior Court (2000)
79 Cal.App.4th 553 is misplaced. There, the Court of
Appeal determined that Defendant engaged in “full participation” in the
discovery process, participated in four third-party depositions, and took “full
advantage of the opportunity to test the validity of [plaintiff’s] claims, both
legally and factually, primarily at [plaintiff’s] expense.” (Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th
553, 558.)
V.
CONCLUSION
As Plaintiff has not met its burden of
establishing any defenses to enforcement of the arbitration agreement,
Defendant’s motion is GRANTED. The Court stays this action until completion of
arbitration. (Code Civ. Proc., § 1281.4.).
The Court sets an Order to Show Cause Re: Arbitration for
_________________________ at 8:30 a.m. in Department A of the Compton
courthouse. The final status conference of January 3, 2024, and trial set for
January 8, 2024, are advanced and vacated.