Judge: Michael Shultz, Case: 24CMCV00046, Date: 2024-04-30 Tentative Ruling
Case Number: 24CMCV00046 Hearing Date: April 30, 2024 Dept: A
24CMCV00046 Mayra Castaneda, et al. v.
Prime Healthcare, et al.
[TENTATIVE] ORDER
I.
BACKGROUND
Plaintiffs
allege they are healthcare workers employed by Defendants, who retaliated
against them by terminating their employment after they complained about unlawful
employment practices concerning adverse health/safety care issues. Plaintiffs
allege five causes of action against Prime Healthcare Management, Inc., Prime
Healthcare Services-St. Francis, LLC dba St. Francis Medical Center, and Prime
Health Care Services, Inc. (“Defendants”) for retaliation/wrongful termination in
violation of the Labor Code and Health & Safety Code.
II.
ARGUMENTS
Defendants
argue that this action should be sent to arbitration because Plaintiffs signed
binding agreements to arbitrate any and all disputes arising out of their employment.
Arbitrability is decided by the arbitrator, not the court. Regardless, the court
should stay the case while arbitration is completed. The arbitration agreement
is not procedurally or substantively unconscionable.
In
opposition, Plaintiffs argue that Defendants have not established that
Plaintiffs electronically “signed” the agreements. The court properly decides
whether this case should be arbitrated in the first instance. The agreements
are procedurally and substantively unconscionable and cannot be enforced.
In
reply, Defendants argue that Plaintiffs signatures have been properly
authenticated as shown by the additional declaration submitted in reply. Plaintiffs
have not established that the agreements are unconscionable.
III.
LEGAL STANDARDS
The court can order a matter to
arbitration if it determines that an agreement 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
Where a party challenges the
validity of an agreement to arbitrate, as Plaintiffs argue here, the issue is
properly determined by the court in the first instance and not the arbitrator,
unless there is “clear and unmistakable evidence” that the parties so agreed. (Jackpot
Harvesting, Inc. v. Applied Underwriters, Inc. (2019) 33 Cal.App.5th 719,
731; Beco
v. Fast Auto Loans, Inc. (2022) 86 Cal.App.5th 292, 302.)
A. Defendants have shown the existence of agreements to arbitrate.
Defendants’ burden in moving to compel arbitration is to show the existence of an agreement, not its validity.
(Espejo v. Southern California Permanente
Medical Group (2016) 246
Cal.App.4th 1047, 1058
["as a preliminary matter the [trial] court is only required to make a
finding of the agreement's existence, not an evidentiary determination of its
validity.”].) To meet its burden, the moving party need only attach a copy of
the agreement to the petition and incorporate it by reference. (Id.
at 1058; Cal. Rules of Court, rule 3.1330 [“The provisions must be stated verbatim or
a copy must be physically or electronically attached to the petition and
incorporated by reference."].) Defendants submit copies of the agreements
purportedly signed by each Plaintiff. (Barbara Degiuseppe declaration,
Ex. A.) The agreements’ express provision governing the arbitrator’s authority
does not include a delegation clause requiring the arbitrator to decide the
gateway issue. (Id., section 8.) Therefore,
the Court may properly consider whether this matter should be determined by
binding arbitration.
B. Defendants have shown that each Plaintiff
signed the agreement to arbitrate.
Where electronic signatures are involved, the moving party is required
to authenticate the signatures where the opposing parties deny signing the
agreement. (See Ruiz
v. Moss Bros. Auto Group, Inc. (2014)
232 Cal.App.4th 836, 844.) Defendant can attribute the signature to Plaintiffs
by showing the "efficacy of any security procedure applied to determine
the person to which the electronic record or electronic signature was
attributable.” (Civ. Code, § 1633.9, (a).) The effect of an electronic signature
attributed to a person "is determined from the context and surrounding
circumstances at the time of its creation, execution, or adoption, including
the parties' agreement, if any, and otherwise as provided by law." (Civ. Code, § 1633.9, (b).)
A party can
establish that the electronic signature was the act of Plaintiff “by presenting
evidence that a unique login and password known only to that person was
required to affix the electronic signature, along with evidence detailing the
procedures the person had to follow to electronically sign the document and the
accompanying security precautions.” (Bannister
v. Marinidence Opco, LLC (2021)
64 Cal.App.5th 541, 545). This may
include evidence of any security procedures required to access the agreements electronically
or evidence to establish that the signers did access the on-line portal, or
when and at what time. (Ruiz,
supra at 844 [where the court of appeal found a “critical gap in the evidence” to
infer that the electronic signature was in fact the employee’s without evidence
to show that only the employee could have affixed the electronic signature.].)
Seven of the nine Plaintiffs,
Dolores Aguilar, James Blankenship, Scott Byington, Mayra Castaneda, Arlene
Nielsen, Lorenza Palomares, and Quennie Reyna manually signed the arbitration
agreement. (Degiuseppe Ex. C, J, K, L, M,
N, O) Plaintiffs, Sonia Rodriguez (“Rodriguez”) and Maricela Garay Barajas “(Barajas”)
purportedly signed electronically. (Id. Ex. A, B.)
Defendants provide
additional evidence in reply explaining the process by which employees access
“iCIMS," the electronic platform on which an employee creates a unique username
and password to apply, and access required forms. (Reply decl. of Christie
Brace, Ex. P, Q.) With respect to Plaintiffs Rodriguez and Barajas, the audit
trails confirm that both completed the arbitration agreement. (Id.)
C. The scope of the arbitration clause broadly
includes the claims alleged by Plaintiffs.
Each arbitration
agreement defines the scope of matters subject to arbitration as follows:
“… any and all
disputes, claims, or controversies between you and the Company arising out of
the employment relationship between the Parties, or the formation or
termination of the employment relationship, that are not otherwise resolved by
mutual agreement, shall be resolved by final and binding arbitration. This
Agreement includes any claims the Company may have against you, or you may have
against the Company.” (Degiuseppe decl., Ex. A, .pdf p. 5.)
Plaintiffs allege
they are health care workers employed by Defendants, Prime and St. Francis.
(Complaint, ¶ 9.) Plaintiffs complained to Defendants about actions
“detrimental to the health and safety of their patients.” (Complaint, ¶ 15.) Plaintiffs
allegedly attended a meeting on November 30, 2023, to present letters
supporting Plaintiffs’ complaints. (Complaint, ¶19.) Plaintiffs were
subsequently suspended for that conduct and thereafter terminated on December
20, 2023. (Complaint, ¶¶ 25-26.) As the alleged dispute arises out of the
employment relationship, Plaintiffs’ disputes fall within the broad scope of
matters that require arbitration.
D. Plaintiffs have not demonstrated that the
arbitration provision is unenforceable.
Plaintiffs
contend that the arbitration provision is unconscionable and cannot be
enforced. The court considers two elements to determine
whether a contract is unconscionable. The first element, procedural
unconscionability, requires evidence that the contract was adhesive in nature,
such as where the employee lacks the ability to negotiate and lacks meaningful
choice or where the unconscionable provision is hidden within a “prolix printed
form.” (Samaniego
v. Empire Today LLC (2012) 205 Cal.App.4th 1138, 1144.)
The second element, substantive unconscionability, involves a contract that is
one-sided or overly harsh. (Fitz
v. NCR Corp. (2004) 118 Cal.App.4th 702, 713
[Agreements that are “unfairly one-sided” and lack “mutuality of obligations”
such as where the weaker party is required to arbitrate, while the stronger
party is afforded a choice of forums are unenforceable.].)
While both elements are required to be
present, they do not have to be present to the same degree. Rather, "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. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.)
Plaintiffs submit
declarations asserting their individual beliefs that signing the arbitration
agreement was a condition of employment. While their conversations with
unidentified representatives are hearsay (to which Defendants’ objections are
sustained), Defendants admit that an applicant “cannot submit an application
for a position with St. Francis in iCIMS without having first completed and
electronically signed each of these forms.” (Brace reply decl., ¶ 8.)
As all forms were required to be signed, Plaintiffs have
established that the arbitration agreement is a contract of adhesion.
Substantive unconscionability exists
where the terms of arbitration are “unfairly one-sided” and lacks “mutuality of
obligations” such as where the weaker party is required to arbitrate, while the
stronger party is afforded a choice of forums. (Fitz,
supra at 713.) The court must “examine the
totality of the agreement's substantive terms as well as the circumstances of
its formation to determine whether the overall bargain was unreasonably
one-sided." (Sonic-Calabasas
A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1146.)
In sum, Plaintiffs argue that the
agreement unfairly limits discovery otherwise available to an employee under
the Discovery Act and that only employees’ claims are subject to arbitration
while the employer has a choice of forum. Plaintiffs also argue that because
the agreement requires arbitration of individual claims, each of the nine
Plaintiffs must incur fees individually, instead of 1/9th of the
total share of fees.
The agreement is not “unfairly
one-sided.” Here, the arbitration requirement applies to the employee as well
as the employer. (Degiuseppe decl., Ex. A, .pdf p. 10 [“This agreement includes
any claims the Company may have against you, or you may have against the Company.”].)
Plaintiffs have not established that the agreement
unfairly limits discovery. In determining whether limitations on discovery are
substantively unconscionable, "courts assess the amount of default
discovery permitted under the arbitration agreement, the standard for obtaining
additional discovery, and whether the plaintiffs have demonstrated that the
discovery limitations will prevent them from adequately arbitrating their
statutory claims.” (De
Leon v. Pinnacle Property Management Services, LLC
(2021) 72 Cal.App.5th 476, 487.)
The Court grants judicial notice of the
procedures applicable to JAMS Employment Arbitration (“Rules”), which the
arbitration agreement incorporates. (Defendant’s RJN, Ex. 1.) The Rules require an
informal exchange of all non-privileged documents and other electronically
stored information. (Id., Rule 17.) The parties are
required to complete an initial exchange of relevant and non-privileged documents.
(Id. .pdf page 16.) The Rules do not limit discovery; rather, absent the
parties’ agreement, the Arbitrator determines discovery disputes, including a
request for additional depositions. Discovery of third parties is permitted if
approved by the Arbitrator. (Id. Rule 17 (a)-(e).)
Plaintiffs rely on De
Leon, which is
generally instructive with respect to the Court’s analysis, but is distinguishable
as to its application. In De Leon, discovery was limited, the arbitrator
could permit additional discovery but only upon a showing of “substantial need,”
and the rules did not require an initial disclosure of information. In this
case, the Rules do not require a higher showing for additional discovery. “At
least” one deposition may be taken, but there is no express limitation on
discovery given the requirement that all parties are obligated to provide initial
disclosure of all relevant information, with the Arbitrator determining
discovery disputes, and the need for additional depositions, based upon
“reasonable need.” (Degiuseppe, Ex. 1, Rule 17(b).)
With respect to Plaintiffs’ inability to
split the costs of arbitration fees among the nine Plaintiffs, this is
irrelevant since the employer agreed to pay the arbitrator’s fees and all costs
“unique to the arbitration to the extent such costs would not otherwise be
incurred in a court proceeding.” (Degiuseppe decl., Ex. 1, .pdf page 11,
section 7.) Additionally, Plaintiffs “shall
not be required to pay any type or amount of expense if such requirement would
invalidate this agreement or would otherwise be contrary to the law as it
exists at the time of the arbitration. (Id.)
V. CONCLUSION
Plaintiffs have not bet their burden of
establishing a defense to enforcement of the mutual arbitration provision
signed by each Plaintiff. Accordingly, Defendants’ motion is GRANTED. The Court
sets a hearing for an Order to Show Cause re: completion of arbitration for January
23, 2025, at 8:30 a.m. in Department A of the Compton Courthouse. This matter
is stayed pending the completion of arbitration. (Code
Civ. Proc., § 1281.4.)