Judge: Michael Small, Case: 23STCV11027, Date: 2024-03-11 Tentative Ruling

Case Number: 23STCV11027    Hearing Date: March 11, 2024    Dept: 57

Plaintiff Monique Slater was employed by Defendant Volunteers of America of Los Angeles  (“VOALA”) as a case manager.  After VOALA terminated her from that job, Slater sued VOALA under California’s Fair Employment and Housing Act (“FEHA”) alleging that VOALA discriminated against her on the basis of her race and disability.  VOALA moved to compel arbitration of Slater’s claims.  Slater opposes the motion.   The Court is granting the motion.  As a result of that decision, proceedings in this Court are stayed pending the outcome of the arbitration.

Slater’s Execution of the Arbitration Agreement

At the commencement of her employment with VOALA, Slater executed a Dispute Resolution Agreement (DRA”) with VOALA.  The DRA provides that Slater and VOALA “agree to resolve by arbitration any and all disputes arising out of or related to [Slater’s] employment with VOALA or the termination thereof.”  It is uncontroverted that Slater’s FEHA claims are disputes that fall within the ambit of the DRA.[1]

The DRA plainly indicates that it was agreed to and accepted by VOALA.   Slater contends that she did not agree to and accept the DRA.  According to Slater, she has no recollection of VOALA presenting her with the DRA and that, correspondingly, VOALA cannot show that the signature on the DRA is hers.  Slater rests her nonagreement/nonacceptance contention on Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836.  Slater’s reliance on Ruiz is misplaced.  Ruiz dealt with the issue of authenticating an electronic signature on an arbitration agreement.  Here, Slater’s signature on the DRA was done by hand, not electronically.  Ruiz is thus inapposite.

Slater’s nonrecollection of affixing her signature on the DRA does not render the DRA unenforceable.  Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747 is instructive.  “If a party confronted with his or her handwritten signature on an arbitration agreement is unable to allege that the signature is inauthentic or forged, the fact that that person does not recall signing the agreement neither creates a factual dispute as to the signature's authenticity nor affords an independent basis to find that a contract was not formed.”  (Id. at p. 758.)  While Slater says that she has no recollection of signing the DRA, she does not assert that the signature on the DRA is someone’s other than hers.

Unconscionability

Slater also contends that the DRA is unenforceable because it is unconscionable.  The Court disagrees.

“Unconscionability has procedural and substantive aspects.”  (Abramson v. Juniper Networks, Inc (2004) 115 Cal.App.4th 638, 655.)  “Both procedural and substantive unconscionability must be present before a contract or term will be deemed unconscionable.”  (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 178 [“Serafin”] Procedural unconscionability focuses on the circumstances surrounding the execution of an arbitration agreement and the relative bargaining power of the parties to the agreement; substantive unconscionability focuses on the fairness, or lack thereof, of the agreement’s terms.  (OTO, LLC v. Kho (2019) 8 Cal.5th 111, 125.)    In analyzing unconscionability, courts apply a “sliding scale, which means that “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 (2000) 24 Cal.4th 83, 114.)

As to procedural unconscionability, Slater states that VOALA presented the DRA to her as a condition of her employment.   The hitch for Slater is that “arbitration agreements imposed as a mandatory condition of employment are not per se unlawful or unconscionable.”   (Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, 75; see also Serafin, supra, 235 Cal.App.4th at p. 179 [an arbitration agreement is “not rendered unenforceable just because it is required as a condition of employment or offered on a ‘take it or leave it’ basis”].)  Rather, whether an arbitration agreement presents employees with a “take it or leave it” choice (i.e. take the arbitration agreement or leave the job) is just one factor that is to be considered in the overall, sliding scale analysis of both procedural and substantive unconscionability.  (Serpa v. California Surety Investigators (2013) 215 Cal.App.4th 695, 704.) 

That the DRA was presented to Slater as a condition of employment is the only indicia of procedural unconscionability that Slater raises in opposition to VOALA’s motion to compel arbitration.   This is a problem for Slater for purposes of the sliding scale analysis because Slater has not shown that the DRA is substantively unconscionable.  She argues that the DRA is substantively unconscionable because it requires the party that opposed arbitration to pay the other party’s costs, fees, and expenses in compelling arbitration.  The DRA does no such thing.  Rather, it provides that VOALA, not Slater, will pay all the arbitration fees, including the arbitrator’s fee, and that both sides shall pay their own attorney’s fees incurred in connection with the arbitration (unless the burden for payment of attorney’s fees can be shifted under federal or state law).  That provision is not substantively unconscionable.