Judge Randolph M. Hammock, Case 23STCV01098 2023-05-09 Tentative Ruling

Judge: Randolph M. Hammock, Case: 23STCV01098, Date: 2023-05-09 Tentative Ruling

This is an employment dispute. Plaintiff Sylvia Lemberski worked for the Cedars-Sinai Defendants as a Sales Outreach Specialist. She alleges she received a negative performance review after complaining to HR of a racist comment made by the Vice President of her group. Plaintiff further alleges she sustained a workplace injury to her foot or ankle, which required a medical leave. Once Plaintiff returned to work with restrictions, she alleges Defendants harassed and retaliated against her because of her disability.

Later, Plaintiff was diagnosed with breast cancer which required another medical leave. She alleges Defendants failed to offer reasonable accommodations including remote work during the COVID-19 pandemic. Plaintiff alleges Defendants eventually terminated her employment based on her medical leaves.

Pursuant to Defendants’ request, the court takes judicial notice of Defendants’ Exhibits A through I, and supplemental Exhibit A submitted in Reply. In doing so, it is emphasized that trial court opinions are unpublished and have no precedential value. (Neary v. Regents of Univ. of Calif. (1992) 3 Cal.4th 273, 282.)

Defendants have submitted objections to Plaintiff’s evidence. This court is unaware of any legal authority which requires a court to rule on evidentiary objections on a motion, except as to a motion for summary motion/adjudication (CCP § 437c (q)) or a special motion to strike (CCP § 425.16 (b)(2)); see also, Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.)

“[T]he petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence . . . .” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284). “In determining whether an arbitration agreement applies to a specific dispute, the court may examine only the agreement itself and the complaint filed by the party refusing arbitration [citation]. The court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.” (Weeks v. Crow (1980) 113 Cal.App.3d 350, 353). “Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.” (California Correctional Peace Officers Ass'n v. State (2006) 142 Cal.App.4th 198, 205).

“[A] party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] 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.” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284).

“If a court of competent jurisdiction, whether in this State or not, 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. . . .” (CCP § 1281.4.)

California has a strong public policy in favor of arbitration as an expeditious and cost-effective way of resolving disputes. “Even so, parties can only be compelled to arbitrate when they have agreed to do so.” (Avila v. S. California Specialty Care, Inc. (2018) 20 Cal. App. 5th 835, 843.) “The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement.” (Id.)

An arbitration agreement is a contractual agreement. “General contract law principles include that ‘[t]he basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contracting. [Citations.] ... The words of a contract are to be understood in their ordinary and popular sense.” [Citations.] (Garcia v. Expert Staffing W., 73 Cal. App. 5th 408, 412–13.)

Defendant has the initial burden of producing “prima facie evidence of a written agreement to arbitrate the controversy.” (Gamboa v. Ne. Cmty. Clinic (2021) 72 Cal. App. 5th 158, 165.) “[I]t is not necessary to follow the normal procedures of document authentication.” (Condee v. Longwood Mgmt. Corp. (2001) 88 Cal. App. 4th 215, 218.)

[E]xcept as otherwise provided in this Agreement, you and Cedars-Sinai agree to submit all claims or controversies in any way relating to or associated with your employment or the termination of employment (“Claims”) to the Conflict Resolution Procedure of the Medical Center. If a Claim is not resolved by the Conflict Resolution Procedure, and if the Claim demands $25,000.00 or more, you and Cedars-Sinai agree that the Claim will be resolved exclusively by binding arbitration.

The Agreement is broad and covers the employment-based claims here. Plaintiff does not contend otherwise. Plaintiff also does not dispute that she signed the agreement and does not dispute that the agreement is covered by the FAA. Therefore, this court finds Plaintiff has agreed to arbitrate the instant dispute, unless some defense to enforcement exists.

In opposition, Plaintiff argues the agreement should be disregarded based on principles of unconscionability. Unconscionability has “both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results. (Sanchez v. Valencia Holding Company, LLC (2015) 61 Cal.4th 899, 910.) Under California law, an arbitration agreement must be in some measure both procedurally and substantively unconscionable in order for the agreement to be unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114; De La Torre v. CashCall, Inc. (2018) 5 Cal.5th 966, 982.) “But they need not be present in the same degree. . . . [T]he 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, supra, 24 Cal.4th at p. 114.)

Plaintiff first argues there exists procedural unconscionability because Defendant did not present a copy of the arbitration rules. But the failure to attach the rules is not, by itself, enough to invalidate the agreement. (Lane v. Francis Cap. Mgmt. LLC (2014) 224 Cal. App. 4th 676, 690). “The failure to attach a copy of arbitration rules could be a factor supporting a finding of procedural unconscionability where the failure would result in surprise to the party opposing arbitration. (Id.) (Emphasis added.) In Lane, the Court found there was not a “surprise” element when the AAA rules could be accessed on the internet. (Id.) There is therefore little procedural unconscionability based on failure to provide a copy of the governing rules.

Arbitration proceedings will be held in Los Angeles, California, under the then effective Employment Rules of the American Arbitration Association (AAA); provided that if there is any conflict between such rules and the requirements of California or federal law, such legal requirements will govern the arbitration.

Plaintiff argues this “deprived [her] of any meaningful opportunity to understand (let alone, negotiate) what rules she would be bound by back when the Agreement was signed in 2008 because she had no way of knowing when or if she would ever seek to arbitrate any claims, nor what Rules would be in effect at that time.” (Opp. 4: 15-18.) However, courts have interpreted similar language as requiring application of the rules in effect at the time the agreement was signed. In O’Hare—the case cited by Plaintiff—the agreement provided it would be governed “in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect.” (O'Hare v. Mun. Res. Consultants (2003) 107 Cal. App. 4th 267, 281.) Noting that “[u]nconscionability focuses on whether the contract or any of its provisions were ‘unconscionable at the time it was made,” the Court looked to the arbitration rules at the time the agreement was entered. (Id.) The Court made a finding of procedural unconscionability because at the time the agreement was signed, the governing arbitration rules did not permit discovery. (Id.)

Plaintiff also contends the agreement is procedurally unconscionable because Cedars-Sinai Medical Center is not a party to the agreement, and therefore cannot enforce it. As a preliminary matter, the question of who can enforce the agreement is not an issue of unconscionability. Be that as it may, the agreement refers to “Cedars-Sinai” and states that Plaintiff must first submit all claims “to the Conflict Resolution Procedure of the Medical Center.” (Hickey Decl., Exh. B [emphasis added].)

Moreover, Plaintiff alleges in her Complaint that all Defendants, including Cedars-Sinai Medical Center, “were the agents of each of the other Defendants,” and “are joint employers, integrated enterprises and alter egos of each other.” (Compl. ¶ 7.) (See Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 418 [holding a nonsignatory sued as an agent of a signatory may enforce an arbitration agreement]; see also Rowe v. Exline (2007) 153 Cal. App. 4th 1276, 1285 [allowing nonsignatory sued as alter ego of signatory to enforce arbitration agreement].) Thus, all named Defendants here can invoke the agreement to arbitrate.

Next, Plaintiff contends the agreement is procedurally unconscionable because it was a contract of adhesion. “The term [contract of adhesion] signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.” [Citation]. (Armendariz, supra, 24 Cal.4th. at 113).

Here, Plaintiff had no ability to negotiate the terms of the agreement. Thus, Plaintiff has met her burden to demonstrate that the “take it or leave it” nature of the agreement establishes “some degree of procedural unconscionability.” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 915).

Considering the above, this court makes a slight finding of procedural unconscionability because the arbitration agreement was a contract of adhesion. This means the substantive terms of the agreement must be scrutinized to ensure they are not manifestly unfair or one-sided. (Id.)

Plaintiff also argues the Agreement is substantively unconscionable. Plaintiff first contends the Agreement’s requirement that Plaintiff first submit her claim to the Defendants’ “Conflict Resolution Procedure” amounts to an unconscionable “free peek” at her case. In Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal. App. 4th 1267, 1282, the court held that an arbitration agreement which required the employee “to submit to discussions with his supervisors in advance of, and as a condition precedent to, having his dispute resolved through binding arbitration” was one of three factors, “taken together,” that made the agreement substantively unconscionable. The agreement there also lacked mutuality. The same was true in Carmona v. Lincoln Millennium Car Wash, Inc. (20140 26 Cal. App. 4th 74, 89, in which a pre-disclosure provision was found to “contribute[] to the substantive unconscionability of an agreement that already lacks mutuality.” (Emphasis added.)

The Court of Appeal came to the opposite conclusion in Nguyen v. Applied Med. Res. Corp. (2016) 4 Cal. App. 5th 232, 254, emphasizing the “bilateral nature of the dispute resolution procedure,” which “distinguishes the parties’ agreement from the employment contract[s]” typically found to be unconscionable.

Here, like in Nguyen, the agreement to arbitrate is mutual. It requires each party—not just Plaintiff—to submit their claims through the Conflict Resolution Center. (Hickey Decl., Exh. B.) Moreover, the cases finding the agreement unconscionable based on this factor were addressing agreements that already contained multiple unconscionable terms. That is not the case here. Based on these considerations, requiring Plaintiff to submit her claims to the Conflict Resolution Procedure amounts to little, if any, substantive unconscionability in the present case.

Next, Plaintiff contends the agreement precludes her from filing a DFEH charge, in direct violation of FEHA and Armendariz. This court does not read that portion of the agreement requiring Plaintiff to first submit her claims to the Conflict Resolution Procedure as precluding her from filing a claim with the DFEH/Civil Rights Department. Indeed, Plaintiff alleges she did, in fact, file a claim with the DFEH before bringing her lawsuit. (See Compl. ¶ 11.)

Finally, Plaintiff argues the agreement is substantively unconscionable because it does not provide for the selection of a neutral arbitrator. However, both the current AAA rules and those existing at the time the agreement was entered into provide for the selection of a neutral arbitrator. (See Supp. RJN, Exh. A., ¶ 12(c).) Additionally, Plaintiff cites no authority holding that the AAA process for selecting an arbitrator is substantively unconscionable. This argument therefore fails.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.