Judge: Randall J. Sherman, Case: 2022-01261880, Date: 2022-11-04 Tentative Ruling

Defendants’ Motion to Compel Arbitration and Stay the Action is granted.  All of plaintiff’s claims other than her PAGA claim on behalf of other employees are ordered to arbitration.  This action is ordered stayed pending completion of the arbitration.  The Case Management Conference set for today is ordered off calendar.  A Post-Arbitration Review Hearing is set for May 26, 2023 at 9:00 a.m.  The parties must file a Joint Status Report at least a week before the hearing, and may request a continuance if arbitration is not yet complete.

The court concludes that there exists a valid agreement to arbitrate the claims asserted by plaintiff and that no grounds exist to bar enforcement of the agreement.  CCP §1281.2.  Plaintiff has failed to meet her burden of proving the facts of any defense to enforceability.  Chin v. Advanced Fresh Concepts Franchise Corp. (2011) 194 Cal. App. 4th 704, 708.  Plaintiff’s claims of unconscionability are unsupported by the language of the arbitration agreement and the law.  Both the Federal Arbitration Act and California law provide for a stay of proceedings pending arbitration.  9 U.S.C. §3; CCP §1281.4.

Plaintiff does not dispute signing the signature page of the Operations Employment Agreement, but she contends that the page she signed did not reference the arbitration provision and that she did not understand she was signing an arbitration agreement.  However, the signature page includes Section XI, meaning there were ten prior sections she could have asked about if she actually received only one page.  Further, plaintiff’s argument that she failed to understand what she was signing and that such failure precluded a binding agreement is unpersuasive.  “The general rule is that, when a person with the capacity of reading and understanding an instrument signs it, he is, in the absence of fraud and imposition, bound by its contents, and is estopped from saying that its provisions are contrary to his intentions or understanding.”  Palmquist v. Mercer (1954) 43 Cal. 2d 92, 98.  Plaintiff does not present any evidence that she lacked capacity to read or understand the agreement.

The defense of unconscionability requires that the arbitration agreement be both procedurally and substantively unconscionable.  De La Torre v. CashCall, Inc. (2018) 5 Cal. 5th 966, 982; Baltazar v. Forever 21, Inc. (2016) 62 Cal. 4th 1237, 1243; Baxter v. Genworth North America Corp. (2017) 16 Cal. App. 5th 713, 723.  Plaintiff argues procedural unconscionability based on the requirement for opting out of the agreement with a notarized letter sent by certified mail within 30 days.  Although this requirement is somewhat burdensome, plaintiff does not indicate that she would have opted out within 30 days but for the requirement of a notarized letter sent by certified mail.  Plaintiff’s argument that the agreement did not explicitly state that she was giving up her right to a jury trial is not an argument that cases have held to result in procedural unconscionability.

Plaintiff has shown no substantive unconscionability that cannot be severed.  The provision in the arbitration agreement that “the parties will share equally in the cost of such Arbitration” violates the rule in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal. 4th 83, 90-91, 110-11, 120, that an arbitration agreement “does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum”.  However, the severability provision in the agreement results in the severance and thus the inapplicability of that clause, leaving no substantive unconscionability in the agreement.

Thus, the court concludes that the arbitration agreement in this case is not both procedurally and substantively unconscionable such that it should be considered unconscionable, and that the arbitration agreement may be enforced.

The arbitration agreement covers plaintiff’s PAGA claims because they are claims that arise out of the parties’ employment relationship.  Although plaintiff’s PAGA claims based on violations she suffered must be arbitrated under Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, plaintiff’s representative PAGA claims will be stayed pending completion of the arbitration and the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc., Case No. S274671.

Defendants are ordered to give notice of the ruling unless notice is waived.