Jacqueline Stephens v. Nordstrom, Inc., et al.

MOVING PARTY: Defendants Nordstrom Inc., Tina Alam, and Charles Moyle

RESPONDING PARTY(S): Plaintiff Jacqueline Stephens

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Jacqueline Stephens brings this action against her former employers, Nordstrom Inc., Tina Alam, and Charles Moyle. Plaintiff alleges that male employees received more favorable treatment than women, and that she was wrongfully terminated after taking time off for medical treatment. 

Defendants now move to compel Plaintiff to arbitrate the dispute pursuant to CCP § 1281 et seq. Plaintiff opposed. 

TENTATIVE RULING:

Defendants’ Motion to Compel Arbitration is GRANTED. 

The action is stayed pending the results of the arbitration. A Status Review/OSC re: Dismissal is set for February 26, 2026 at 8:30 a.m.

Defendants are ordered to give notice.

DISCUSSION:

Motion to Compel Arbitration

I. Judicial Notice

Pursuant to Defendants’ request, the court takes judicial notice of Exhibit 1.

II. Legal Standard

“Under the FAA, there is a strong policy favoring arbitration. [Citations.] ‘The overarching purpose of the FAA is to ensure the enforcement of arbitration agreements according to their terms ....’ [Citation.] Therefore, ‘[a]rbitration is a matter of consent ....’ [Citations.] [¶] ‘ “Although the FAA preempts any state law that stands as an obstacle to its objective of enforcing arbitration agreements according to their terms, ... we apply general California contract law to determine whether the parties formed a valid agreement to arbitrate their dispute.” ’ [Citations.]” (Barrera v. Apple Am. Grp. LLC (2023) 95 Cal. App. 5th 63, 76.) It is settled that “[u]nder both California and federal law, arbitration is strongly favored and any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” (Balandran v. Labor Ready, Inc. (2004) 124 Cal.App.4th 1522, 1527.)

California also 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.)  

“[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.)

III. Analysis

A. The FAA Applies

The FAA provides for enforcement of arbitration provisions in any contract “evidencing a transaction involving commerce.” (9 USC § 2.) The term “involving commerce” is functionally equivalent to “affecting commerce” and “signals an intent to exercise Congress’ commerce power to the full.” (Allied-Bruce Terminix Cos., Inc. v. Dobson (1995) 513 US 265, 277.) “The party asserting the FAA bears the burden to show it applies by presenting evidence establishing [that] the contract with the arbitration provision has a substantial relationship to interstate commerce . . . .” (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238.)

Courts will also apply the FAA where the arbitration agreement, by its terms, calls for its application. (See Davis v. Shiekh Shoes, LLC (2022) 84 Cal. App. 5th 956, 963 [finding the FAA applies “if it is so stated in the agreement.”].)

Here, the Arbitration Agreements state that they are “governed by the Federal Arbitration Act, 9 U.S.C. § 1, et seq., and evidence[] a transaction involving commerce.” (Fischbeck Decl., Exhs. A and C.) 

Plaintiff apparently does not dispute that the FAA applies here. Accordingly, this court will consider and apply the FAA, where necessary. 

B. Delegation Clause

As a threshold issue, Defendants argue the question of arbitrability should be determined by the arbitrator. 

The 2022 Agreement provides that “disputes relating to the validity, applicability, enforceability, unconscionability or waiver of this Agreement, including but not limited to any claim that all or any part of this Agreement is void or voidable, are Covered Disputes and shall be decided by the arbitrator.” (Fischbeck Decl., Exh. C.)  [FN 1] 

While this provision arguably delegates the arbitration question to the arbitrator, the Ending Forced Arbitration Act specifically provides that the enforceability of an agreement to arbitrate “shall be determined by a court, rather than an arbitrator…[,] irrespective of whether the agreement purports to delegate such determinations to an arbitrator.” (9 U.S.C. § 402(b) [emphasis added].)

Here, Plaintiff has raised the EFAA as a defense to arbitration. Therefore, the applicability of the EFAA to the agreement to arbitrate must be addressed by this court, not the arbitrator.

C. Existence of Agreement to Arbitrate 

Defendants have 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.)

Defendants submit a declaration from Justin Fischbeck, Nordstrom’s Senior Manager HR Policy and Enterprise Compliance. (Fischbeck Decl. ¶ 1.) Defendants present evidence that Plaintiff electronically signed Nordstrom’s Dispute Resolution Agreement on December 27, 2018. (Fischbeck Decl. ¶ 11, Exh. A.) 

The 2018 DRA “applies without limitation to disputes regarding the employment relationship, trade secrets, unfair competition, compensation, breaks and rest periods, termination, discrimination, retaliation (including retaliation under the Employee Retirement Income Security Act of 1974) or harassment and claims arising under the Uniform Trade Secrets Act, Civil Rights Act of 1964, Americans With Disabilities Act, Age Discrimination in Employment Act, Family Medical Leave Act, Fair Labor Standards Act, Genetic Information Non-Discrimination Act, and other state and local statutes, addressing the same or similar subject matters, and all other state statutory and common law claims.” (Fischbeck Decl., Exh. A, p. 2.) 

In opposition, Plaintiff does not dispute that she signed this agreement in 2018.

Defendant presents further evidence that Nordstrom updated its DRA in 2021 and again in 2022. (Fischbeck Decl., Exhs. B & C.) Each update provides that an employee accepts the updated DRA by continuing employment with Nordstrom. (Id.) 

It does not appear from the evidence that Defendant ever presented Plaintiff with the 2021 update. However, Fischbeck attests in his declaration that the 2022 Update “was uploaded to Ms. Stephens’ Workday account on 12/15/2022.” (Fischbeck Decl. ¶ 20.) Nordstrom also emailed the update to each employee, including Plaintiff. (Id. ¶ 22.) Plaintiff continued her employment with Nordstrom after receipt of the updated DRA. 

Courts have recognized an “implied-in-fact” agreement to arbitrate where the employee's continued employment constitutes acceptance of an agreement proposed by the employer. (See Asmus v. Pacific Bell (2000) 23 Cal.4th 1; see also Craig v. Brown & Root, Inc. (2000) 84 Cal. App. 4th 416.) “ ‘Implied-in-fact contracts are found in cases with unexecuted arbitration agreements when (1) employees have knowledge of the arbitration agreement and (2) employees continue to work after receipt of the arbitration agreement. In such cases, courts have held that the employees' continued employment constitutes their acceptance of the agreements to arbitrate.’ ” (Gorlach v. Sports Club Co. (2012) 209 Cal.App.4th 1497, 1507.) This analysis is highly “fact specific” and depends not just on the parties’ conduct, but also on the language of the employer’s policies. (Douglass v. Serenivision, Inc. (2018) 20 Cal. App. 5th 376, 388; Mendoza v. Trans Valley Transp. (2022) 75 Cal. App. 5th 748, 791.) 

Plaintiff does not dispute that the 2022 DRA is generally binding. The 2022 Update “supersedes previous versions and is in effect during [Plaintiff’s] employment until further notice.” (Fischbeck Decl., Exh. A. p. 2.) Like the original DRA, the Update is broad, requiring mutual arbitration of “any legal disputes arising out of or related to your application for employment with Nordstrom, your employment with Nordstrom, or the termination of your employment with Nordstrom.” (Id. p. 3.) 

Therefore, this court considers the most recent 2022 Update as the governing Arbitration Agreement in this matter.  [FN 2]  Considering this evidence, Defendant has met its initial burden to produce a written agreement to arbitrate the controversy here.

D. Non-signatories

In opposition, Plaintiff argues that Defendants Alam and Moyle cannot invoke the arbitration agreement because they are non-signatories.

Generally, a party must be a signatory to the contract to enforce the arbitration clause. (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236 (JSM).) However, the Court of Appeal has held that under the principle of equitable estoppel, “ ‘a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are “intimately founded in and intertwined” with the underlying contract obligations.’ [Citation.]” (Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 786; Rowe v. Exline (2007) 153 Cal. App. 4th 1276, 1287 citing Turtle Ridge, 140 Cal.App.4th at 833 [“a signatory plaintiff who sues on a written contract containing an arbitration clause may be estopped from denying arbitration if he sues nonsignatories as related or affiliated persons with the signatory entity”].) In addition, although “[s]omeone who is not a party to a contractual arbitration provision generally lacks standing to enforce it,” there is a recognized exception “for third parties who are agents of a party to a contract.” (Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal. App. 5th 840, 856; Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 418 [“If, as the complaint alleges, the individual defendants, though not signatories, were acting as agents for the [Defendant], then they are entitled to the benefit of the arbitration provisions.”]).  

Here, the 2022 Agreement—which is the governing agreement here [FN 3] —applies to any “Covered Disputes that Nordstrom may have against you or you may have against: (1) Nordstrom or one of its affiliates, subsidiaries, or parent companies (“Nordstrom”); (2) Nordstrom’s officers, directors, principals, shareholders, members, owners, employees, or agents; (3) Nordstrom’s benefit plans or the plan’s sponsors, fiduciaries, administrators, affiliates, or agents; and (4) all successors and assigns of any of them.” (Fischbeck Decl., Exh. C, p. 3.) Plaintiff and “each and all of the entities or individuals listed in (1) through (4) may enforce this Agreement.” (Id.) 

Defendant Moyle and Alam are alleged to be Defendant’s employees. (See Compl. ¶ 2.) And here, because the Agreement covers a dispute Plaintiff may have against Nordstrom’s employees, it applies to Plaintiff’s claims against Defendants Moyle and Alam. Additionally, Defendants Moyle and Alam “may enforce” the agreement because they are listed as covered parties in the agreement. (Fischbeck Decl., Exh. C, p. 3.) Therefore, all named Defendants can compel arbitration under the 2022 DRA.

E. Defenses to Enforcement

1. Forced Arbitration of Sexual Assault Claims

In opposition, Plaintiff argues that arbitration is precluded by operation of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. (See 9 U.S.C. §§401 & 402; H.R. 4445.) It “represent[s] the first major amendment of the Federal Arbitration Act,” and “voids predispute arbitration clauses in cases…involving sexual harassment allegations.” (Murrey v. Superior Ct. (2023) 87 Cal. App. 5th 1223, 1230.) 

The Act provides that “at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute,…no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.” (9 U.S.C. §§401(a).) Therefore, when considering if this action invokes the EFAA, this court must determine if Plaintiff has “alleg[ed] conduct constituting a sexual harassment dispute.” (9 U.S.C. 402(a).)

As relevant here, the Act defines “sexual harassment dispute” as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” (9 U.S.C. § 401(4).)

It is critical to look to the allegations in Plaintiff’s complaint. “ ‘It is an elementary principle of modern pleading that the nature and character of a pleading is to be determined from its allegations, regardless of what it may be called, and that the subject matter of an action and issues involved are determined from the facts alleged rather than from the title of the pleadings....' ” (Jaffe v. Carroll (1973) 35 Cal.App.3d 53, 57, quoting from McDonald v. Filice (1967) 252 Cal.App.2d 613, 622; Ameron Internat. Corp. v. Insurance Co. of State of Pennsylvania (2010) 50 Cal.4th 1370, 1386 [in construing a complaint, courts must “emphasiz[e] substance over form”].)

Here, Plaintiff, a 49-year old woman, alleges that suffered from “a back injury that prevented her from engaging in working, performing manual tasks, and bending.” (Compl. ¶¶ 11, 14.) In March 2022, Plaintiff “had surgery on her back in which she requested, and was approved to take a medical leave which began on or about March 10, 2022.” (Id. ¶ 14(a).) Upon returning to work with accommodations in June of 2022, Plaintiff received a review “with negative comments relating to her attendance.” (Id. ¶ 14(d).) Plaintiff alleges “these negative markings were in direct retaliation for Stephens taking a medical leave.” (Id.)

In March 2023, Defendant “Moyle made several comments about Stephens having medical appointments for her back injury, including she should arrange her medical appointments around her work schedule or her job would be at risk.” (Id. ¶ 14(l).) In response, Plaintiff complained to Defendant Alam, Human Resources Representative, who informed Plaintiff there was an investigation into Moyle’s conduct. (Id. ¶ 14(m).) 

“On or about April 17, 2023, Stephens followed up with Alam regarding the investigation. Alam informed Stephens that Moyle was found of wrongdoing and would be reprimanded. Alam told Stephens she would not face any repercussions from the investigation. [¶] However, the next day on or about April 18, 2023 Stephens suddenly was terminated.” (Id. ¶ 14(n),(o).)

In addition to discrimination based on her disability, Plaintiff also alleges that “it became apparent…that she was [the] only woman hired permanently on Moyle’s team as other women who joined her department would be hired temporarily on contract-basis and not hired permanently.” (Id. ¶ 14(e).) Defendant “Moyle frequently made insulting comments about women being unintelligent and overly emotional among other remarks.” (Id. ¶ 14(f).) Plaintiff alleges she “witnessed her male colleagues receive[] more favorable work assignments than herself,” and “on one specific occasion in or around late 2022, Moyle took a project away from [Plaintiff] and gave it to a male colleague without justification.” (Id. ¶ 14(g).) In a virtual meeting, Moyle “scolded” Plaintiff “for not having her camera on.” (Id. ¶ 14(i).) “Notably, Stephens’ male colleagues did not all have their cameras on, however, they were not scolded.” (Id.)

In essence, Plaintiff alleges a double standard in the workplace, where men received more favorable treatment then women. On these allegations—viewed in context with the EFAA—this court concludes Plaintiff has not “alleg[ed] conduct constituting a sexual harassment dispute.” (9 U.S.C. § 402(a).) Instead, she has alleged discriminatory practices in Defendant’s routine personnel management based on sex. 

California law distinguishes between discrimination and harassment.  [FN 4]  And this distinction—though it might feel like splitting hairs at times—is an important one, especially considering the nature of the EFAA. “[D]iscrimination refers to bias in the exercise of official actions on behalf of the employer, [whereas] harassment refers to bias that is expressed or communicated through interpersonal relations in the workplace.” (Roby v. McKesson Corp. (2009) 47 Cal. 4th 686, 707.) In other words, “commonly necessary personnel management actions…may retrospectively be found discriminatory if based on improper motives, but in that event the remedies provided by the FEHA are those for discrimination, not harassment.” (Id.) Harassment, on the other hand, “focuses on situations in which the social environment of the workplace becomes intolerable because the harassment (whether verbal, physical, or visual) communicates an offensive message to the harassed employee.” (Id.)

Were this court to adopt Plaintiff’s broad reading of the statute, nearly any claim for discrimination or harassment based on gender would be immune from arbitration. This court suspects that if the legislature intended such a sweeping result, it would have clearly said so. (People v. McHenry (2000) 77 Cal. App. 4th 730, 732 [“When interpreting a statute [the court’s] primary task is to determine the Legislature’s intent”].)

Therefore, this matter is not barred from arbitration under the FAA, and any doubts as to that conclusion must be resolved in favor of arbitration. (See California Corr. Peace Officers Assn. v. State of California (2006) 142 Cal. App. 4th 198, 205 [“Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration”].)  

2. Unconscionability

Plaintiff also 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.)

i. Procedural Unconscionability

First, Plaintiff argues 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]. (Id. at 113).

The court agrees with Plaintiff that the dynamic here represents a classic contract of adhesion. Therefore, the “take it or leave it” nature of the agreement is sufficient to establish “some degree of procedural unconscionability.” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 915).  This means the substantive terms of the agreement must be scrutinized to ensure they are not manifestly unfair or one-sided.  (Id.) 

ii. Substantive Unconscionability

Plaintiff next argues the DRA is unconscionable because Defendant’s dispute resolution procedure is itself unconscionable.  The 2018 and 2022 DRAs include a multi-step grievance process, which includes efforts of informal resolution prior to binding arbitration. (See Fischbeck Decl., Exh. A, p. 1; Exh. C, p. 2.)

As cited by Plaintiff, 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 grievance process.  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 through the grievance process amounts to little, if any, substantive unconscionability in the present case.

Therefore, Plaintiff has established minimal substantive unconscionability.  Under the sliding scale approach, Plaintiff has not established the Agreement is unconscionable.

Accordingly, Defendants’ Motion to Compel Arbitration is GRANTED. 

IT IS SO ORDERED.

Dated:   February 26, 2025 ___________________________________

Judge of the Superior Court

FN 1 - It is worth noting that the 2018 DRA Agreement, unlike the 2022 version, expressly “does not apply to disputes regarding the enforceability, revocability or validity of the Agreement or any portion of the Agreement,” and any “[s]uch disputes can be resolved only by a court of competent jurisdiction.” (Fischbeck Decl., Exh. A.)

FN 2 - At least for purposes of the threshold issue of whether the controversy is arbitrable, the 2018 and 2022 DRA’s are substantively the same. Thus, in the event the 2022 Agreement is somehow not binding, an agreement to arbitrate still exists under the 2018 Agreement. 

FN 3 -   It is worth noting that the 2018 Agreement does not contain this language. Be that as it may, because the 2022 Agreement supersedes the 2018 Agreement, it is the 2022 Agreement that matters. 

FN 4 - This is not to say that harassment and discrimination cannot overlap. They certainly can. (See Roby, supra, 47 Cal. 4th at 707 [“Although discrimination and harassment are separate wrongs, they are sometimes closely interrelated, and even overlapping, particularly with regard to proof”].)