Judge Peter A. Hernandez, Case Number: 24STCV18095, Date: 2025-04-29 Tentative Ruling

Defendant Eurostar, Inc.’s Motion to Compel Arbitration and Stay Proceedings is GRANTED.

On July 23, 2024, Plaintiff Angel De Jesus Hernandez (“Plaintiff”) filed a complaint against Defendant Eurostar, Inc. (“Defendant”) arising from Plaintiff’s employment with Defendant alleging causes of action for:

2. Failure to Provide Reasonable Accommodation [Cal. Gov. Code § 12940, et seq.];

3. Failure to Engage in Good Faith Interactive Process [Cal. Gov. Code § 12940, et seq.];

On February 21, 2025, Defendant filed this Motion to Compel Arbitration. On April 16, 2025, Plaintiff filed an opposition. On April 22, 2025, Defendant filed a reply.

“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 determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2, subds. (a) and (b).)

The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence. (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 761.) The burden then shifts to the opposing party to prove by a preponderance of the evidence a defense to enforcement (e.g., fraud, unconscionability, etc.) (Ibid.) “In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.)

“If a court of competent jurisdiction. . . has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc., § 1281.4).

Defendant moves to compel arbitration of Plaintiff’s claims and staying all further judicial proceedings in this action pending completion of arbitration.

Under the Federal Arbitration Act (“FAA”), an agreement to arbitrate “shall be valid, irrevocable, and enforceable.” (9 U.S.C. § 2.) The United States Supreme Court has broadly interpreted the FAA.¿Under this interpretation, the statute is to be read “as insisting that the ‘transaction’ in fact ‘involve’ interstate commerce, even if the parties did not contemplate an interstate commerce connection.” (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 28.)¿ “The statute's language, background, and structure establish that section 2's ‘involving commerce’ words are the functional equivalent of the phrase ‘affecting commerce,’ which normally signals Congress' intent to exercise its commerce power to the full[.]” (Id., at p. 265.) “Congress Commerce Clause power ‘may be exercised in individual cases without showing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent ‘a general practice ... subject to federal control.’ [Citations.] Only that general practice need bear on interstate commerce in a substantial way.” (Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56-57.)¿

An arbitration clause is governed by the FAA if the agreement is a contract “evidencing a transaction involving commerce.” (9 U.S.C. § 2.) Courts “broadly construe” this phrase, because the FAA “embodies Congress’ intent to provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause.” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1286.)¿

The court finds that the arbitration agreement at issue here involves interstate commerce. Defendant provides evidence that they conduct business across the United States. (Morales Decl. ¶ 2-3.) Plaintiff has also not disputed that the arbitration agreement involves interstate commerce. Accordingly, the FAA governs the parties’ arbitration agreement.

As the FAA applies, the court’s inquiry is limited to a determination of (1) whether a valid arbitration agreement exists and (2) whether the arbitration agreement covers the dispute. (9 U.S.C., section 4;¿Chiron Corp. v. Ortho Diagnostics Systems, Inc.¿(9th Cir. 2000) 207 F.3d 1126, 1130;¿Howsam¿v. Dean Witter Reynolds, Inc.¿(2002) 537 U.S. 79, 84;¿see¿Simula, Inc. v. Autoliv, Inc.¿(9th Cir. 1999) 175 F.3d 716 [if the finding is affirmative on both counts the FAA requires the Court to enforce the arbitration agreement in accordance with its terms].)

Defendant contends that Plaintiff entered into an arbitration agreement on July 5, 2018, as part of Plaintiff’s personnel documents. (Morales Decl., ¶ 5, Exh. A.) Defendant provides evidence of such agreement and Plaintiff’s acceptance. (Ibid.) The arbitration agreement provides as follows:

“ To the maximum extent allowed by law, the Company and I mutually consent to the resolution by binding arbitration of all claims or causes of action that the Company may have against me or that I may have against the Company or the Company's current and former owners, partners, members, officers, directors, employees, representatives and agents, all subsidiary and affiliated entities, all benefit plans, the benefit plans' sponsors, fiduciaries, administrators, affiliates, and all successors and assigns of any of them.

The claims covered by this Agreement include, but are not limited to: claims for breach of any contract or covenant; tort claims; claims for discrimination or harassment (including, but not limited to, race, sex, religion, national origin, age, medical condition, disability or sexual orientation); claims for retaliation; claims for violation of public policy; claims for unpaid wages; and claims for violation of any federal, state, local or other law, statute, regulation or ordinance, including, but not limited to, all claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, the California Fair Employment & Housing Act (and other state's anti-discrimination laws), the California Labor Code, and/or the Fair Labor Standards Act.”

By having attached a copy of the arbitration agreement, Defendant has met its initial burden in establishing the existence of an arbitration agreement. (Condee v. Longwood Mgmt. Corp.¿(2001) 88 Cal.App.4th 215, 218; Cal. Rules of Court, rule 3.1330.) The burden now shifts to Plaintiff to challenge its validity. (Condee, supra, 88 Cal.App.4th at p. 219.)

In opposition, Plaintiff contends that Defendant has not established the existence of a valid arbitration agreement. (Opp., at p. 4.) Plaintiff argues that Plaintiff’s resignation from his employment with Defendant in August 2021 terminated the arbitration agreement signed in 2018. (Ibid.) Plaintiff was then rehired in October 2021 without signing any subsequent arbitration agreement. (Ibid.) Relying on Vazquez v. SaniSure, Inc. (2024) 101 Cal.App.5th 139, Plaintiff argues that his claims are not subject to arbitration because they arise from Plaintiff’s second period of employment without being subject to a newly signed arbitration agreement. (Ibid.)

The court finds that a valid arbitration agreement exists between the parties. In Vazquez, the court found that “[a]n employer and employee can agree to arbitrate claims related to their employment relationship. But termination of that relationship can revoke the arbitration agreement. And when there is no evidence that the parties agreed to arbitrate claims arising from a subsequent employment relationship, any claims arising solely from that subsequent relationship are not subject to arbitration.” (Vazquez, supra, 101 Cal.App.5th at p. 142.) Here, the arbitration agreement provides “that differences may arise between [the parties] during or following [Plaintiff’s] employment…by signing this Mutual Agreement to Arbitrate Claims [the parties] are agreeing to resolve any differences between [them] through the binding arbitration procedures[.]” Such provision clearly states the parties’ intent to arbitrate claims arising even after termination of Plaintiff’s employment.

In addition to determining whether a valid arbitration agreement exists, the court is required to determine whether the arbitration agreement covers the dispute at hand. Generally, a court will look to the arbitration agreement itself to determine its scope. (United Teachers of Los Angeles v. Los Angeles Unified School Dist. (2012) 54 Cal.4th 504, 516.)

As Plaintiff’s causes of action are founded in Plaintiff’s employment with Defendant, the court finds that such claims are within the scope of the arbitration agreement between the parties.

Defendant also contends that the arbitration agreement contains an express delegation clause, which vests exclusive authority to the arbitrator to resolve any issues concerning the arbitrability of the dispute between the parties. (Motion, at pp. 5-7.)

An arbitration clause that “clearly and unmistakably” empowers the arbitrator to decide issues of arbitrability is enforceable, provided the delegation is not revocable by a contractual defense, such as unconscionability, fraud, or duress. (B.D. v. Blizzard Entertainment, Inc., supra, 76 Cal.App.5th at p. 959.) “There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable. [Citation.] Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.’ [Citations.] The ‘clear and unmistakable’ test reflects a ‘heightened standard of proof’ that reverses the typical presumption in favor of the arbitration of disputes.” (Id. at p. 957, italics in original.)

The delegation provision in the arbitration agreement provides that the “arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement, including but not limited to any claim that all or any part of this Agreement is void or voidable.” (Morales Decl., ¶ 5, Exh. A.) The court finds this delegation provision clearly and unmistakably empowers the arbitrator to decide issues of arbitrability, including the scope of the arbitration agreement and whether the arbitration agreement is void or unenforceable. (B.D. v. Blizzard Entertainment, Inc. (2022) 76 Cal.App.5th 931, 957, 959.) The only other issue the court may decide at this point is whether the delegation provision itself is enforceable. (Ibid.) However, Plaintiff does not dispute that the delegation clause is valid.

As such, the court finds that any arguments regarding the enforceability of the arbitration agreement are for the arbitrator to decide.[1] Thus, Defendant’s motion is granted.

If a party applies to a court “for an order to arbitrate a controversy which is an issue involved in an action or proceeding pending before a court of this State and such application is undetermined, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until the application for an order to arbitrate is determined and, if arbitration of such controversy is ordered, until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code of Civ. Proc., § 1281.4.)

Because the court has found that arbitration is warranted in this matter, the court also stays the proceedings during the pendency of the arbitration process.

Defendant Eurostar, Inc.’s Motion to Compel Arbitration and Stay Proceedings is GRANTED.

[1] Although the court does not need to address Plaintiff’s remaining arguments, the court nevertheless does not find that there is sufficient unconscionability to render the arbitration agreement unenforceable. The mere fact an adhesion contract is involved does not per se render the arbitration provision unenforceable because such contracts are¿“an inevitable fact of life for all citizens—businessman and consumer alike.”¿ (Graham v. Scissor-Tail, Inc.¿(1981) 28 Cal.3d 807, 817.) Moreover, the risk of Defendant’s potential advantage for being a “repeat player” in arbitration and the imposition of costs onto Plaintiff do not create a sufficiently high degree of substantive unconscionability to render the arbitration agreement unenforceable.