Judge Randolph M. Hammock, Case Number: 25STCV03514, Date: 2025-04-23 Tentative Ruling

Plaintiff Alejandro Rivas Rios, a former employee of Defendants Mercado Buenos Aires, Inc., Buenos Aires Grill, Inc., Paul Rodriguez, and Nito Doe, alleges he injured his hand at work. Upon his return, Defendants failed to offer reasonable accommodations and terminated his employment.

In Reply, Defendants submit objections to Plaintiff’s declaration. 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.)

“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.)

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.)

Defendant Mercado regularly purchases goods and supplies from vendors outside of California, has a website that is accessible by residents and customers outside of California, and uses interstate communication networks including the telephone, internet, and U.S. Postal system to conduct its business. (Rodriguez Decl. ¶ 4, Ex. A.) Similarly, Plaintiff worked for Mercado as a cook and prepared food and goods, many of which were grown and produced outside of California. (Id. ¶ 5).

In addition, the 2022 Arbitration Agreement states that it “is governed by the Federal Arbitration Act (9 U.S.C. Sections 1 et seq.).” (Rodriguez Decl., Exh. D, p. 1); 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.”].)

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 provide a declaration from Paul Rodriguez, the owner of Defendants Mercado Buenos Aires, Inc., and Buenos Aires Grill, Inc. (Rodriguez Decl. ¶ 1.) Rodriguez attests that Plaintiff signed three arbitration agreements during his employment with Defendants. (Id. ¶ 6.) Most recently, Plaintiff signed an agreement to arbitrate on October 28, 2022. (Id. ¶ 9, Exh. D.) The 2022 Agreement provides, in relevant part:

The claims which are to be arbitrated under this agreement include, but are not limited to, disputes regarding […] claims for wages and other compensation, […], claims for public policy, wrongful termination, tort claims, claims for unlawful discrimination and/or harassment […] to the extent allowed by law […], and all other federal, state or local statutory and legal claims arising out of relating to your employment or the termination of employment […]

This switches the burden to Plaintiff, who “bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa, supra, 72 Cal. App. 5th at 165.) Plaintiff can do this in “several ways,” including by “declar[ing] under penalty of perjury that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement.” (Id.)

In opposition, Plaintiff does not dispute that he signed the agreement to arbitrate. The court therefore concludes a valid agreement to arbitrate exists. The general enforceability of the agreement is addressed under Plaintiff’s defenses to enforcement, infra.

The Arbitration Agreement provides that any dispute between Plaintiff and Mercado “or any of its officer’s agents [or] employees … (each of which are third party beneficiaries of this Agreement) shall be settled by final and binding arbitration.” (Rodriguez Decl. ¶ 10, Ex. D, p. 1.)

Here, Plaintiff alleges that Nito Doe was a “supervisor with Entity Defendants.” (Compl. ¶ 2(e).) Plaintiff also alleges that “all Defendants acted as agents of all other Defendants in committing the acts alleged.” (Id. ¶ 6.) Thus, as an employee and agent of the employer Defendants, Nito Doe is an express third-party beneficiary of the agreement to arbitrate. (See 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.”]). Therefore, Defendant Nito Doe can demand arbitration.

Plaintiff argues that evening assuming an agreement to arbitrate exists, it 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.)

First, Plaintiff argues the Arbitration Agreement is procedurally unconscionable because it was a contract of adhesion—it was a condition of his employment, and he had no ability to negotiate its terms. “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).

Plaintiff attests in his declaration that on October 28, 2022, he “was given a stack of documents by [his] employer and was told to sign them the same day.” (Rios Decl. ¶ 3.) He “was not advised on what the documents were and was only told it was a condition of [his] employment. [He] was not informed by anyone that [he] could negotiate the terms of the Arbitration Agreement.” (Id.) Plaintiff asserts the employer “was aware of [his] immigration status and inability to speak English.” (Id. ¶ 4.) He concludes that he “felt pressured to sign the document right away without raising any concerns for fear of losing [his] job stability.” (Id.)

Based on the circumstances, the court agrees with Plaintiff that the dynamic demonstrates a classic contract of adhesion in the employment context. Thus, 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.)

The court further recognizes that the arbitration agreement was apparently presented to Plaintiff in English, which he has an “inability to speak.” (Rios Decl. ¶ 4.) However, “the fact that [a plaintiff] signed a contract in a language he may not have completely understood would not bar enforcement of the arbitration agreement.” (Ramos v. Westlake Servs. LLC (2015) 242 Cal. App. 4th 674, 687.) “If [the plaintiff] did not speak or understand English sufficiently to comprehend the English Contract,” the solution is to “have had it read or explained to him.” (Id.; Pinnacle Museum Tower Assn. v. Pinnacle Market Development LLC 55 Cal.4th 223, p. 226 [“An arbitration clause within a contract may be binding on a party even if the party never actually read the clause.”]; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 710, [general rule is one who assents to a contract is bound by its provisions and cannot complain of unfamiliarity with the language]; Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1674 [reasonable diligence requires reading of contract before signing].)

Next, Plaintiff argues the agreement is substantively unconscionable because it lacks mutuality. Plaintiff contends that the agreement unlawfully mandates arbitration as the “forum to resolve employment related disputes related to the subject matter of the Employment Agreement, but not arbitration of claims Defendants are likely to initiate against Plaintiff.” (Opp. 9: 10-12.)

The court does not agree that the agreement lacks mutuality. The agreement applies broadly to nearly any imaginable claim that arises in the employment context. This includes, among others, “claims for breach of trade secret law, claims regarding breaches of confidentiality, violation of non-disclosure/non solicitation provisions, embezzlement/conversion, [and] employee theft…” (Rodriguez Decl. ¶ 10, Ex. D, p. 1.) These are claims most likely to be asserted by the employer against an employee.

Plaintiff takes issue with the fact that the agreement does not expressly mention other employer-brought claims, such as those “related to intellectual property, severance or noncompete agreements, and equitable relief related to unfair competition.” (Opp. 10: 8-9.)

However, the agreement is “not limited to” only those mentioned. (Rodriguez Decl. ¶ 10, Ex. D, p. 1.) The only disputes or claims expressly not covered by arbitration are those “pending in a state or federal court or arbitration as of the date of employee’s receipt of this agreement” or those named in the Class and Collective Action Waiver or PAGA Waiver sections. (Id. pp. 1-2.) This court otherwise construes the agreement to apply mutually to claims arising in the employment relationship. Therefore, the arbitration agreement (and claims excluded) are distinguishable from those that other courts have found substantively unconscionable. (See Martinez v. Master Prot. Corp. (2004) 118 Cal. App. 4th 107, 115 [provision of arbitration agreement was substantively unconscionable where it excluded “claims involving trade secrets, misuse or disclosure of confidential information, and unfair competition,” which “typically are asserted only by employers”].) The agreement is therefore mutual.

Second, Plaintiff argues the agreement places severe and unreasonable limitations on discovery. Under Armendariz, an arbitration agreement need only “provide for more than minimal discovery.” (Armendariz, supra, 24 Cal.4th at p. 102.) Plaintiff asserts that the 2014 Judicate West Commercial Arbitration Rules—those in effect when Plaintiff signed the agreement—limit him to only a single one-day deposition, twenty special interrogatories, twenty requests for production of documents, and twenty requests for admission. (Varda Decl., ¶ 7; Exh. D.) However, the Rules give the arbitrator discretion to allow additional discovery where justified. (Id.)

The Arbitration Agreement itself provides that the “parties shall be entitled to conduct all discovery to which they would have been entitled to had the parties’ controversy been filed in court, provided, however, that the arbitrator shall have the discretion to issue protective orders or otherwise limit discovery where reasonably necessary…” (Varda Decl., ¶ 7; Exh. D.) Thus, considering the Agreement and Judicate West rules, Plaintiffs are afforded “more than minimal” discovery.

Finally, Plaintiff argues the agreement is unconscionable because it “grants the arbitrator with unfettered discretion to extend the time to make an award and to withhold the award if any requisite fee and/or deposit is pending.” (Opp. 14: 7-8.) Judicate West Rule 13.B.1 provides:

The award, following the arbitration hearings, will be made no later than 30 days from the date of close of the hearings, unless the parties agree to a later date, or unless there is good cause for the arbitrator to extend the time for making the award…[Judicate West] has the right to withhold an award from all parties until all requisite fees and deposits owed by the parties have been paid in full. If JW withholds an award for this reason, the arbitrator will be deemed to have good cause to extend the time for making the award, and in any event, the award will not be rendered tardy or invalid.

This court is unaware of any California authority finding a provision of this type to be substantively unconscionable—Plaintiff has provided none. This court is not convinced that granting an arbitrator discretion in the timing of an award is in any way substantively unconscionable. Courts, too, are generally granted great discretion in timing their orders processes. Thus, this argument fails.

Finally, in the alternative to granting this motion, Plaintiff asks the court to hold an evidentiary hearing under the holding of Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394. The court declines that request. First, it does not appear that the facts underlying this motion are actually in dispute. Second, even if there was a factual dispute, this court can readily resolve them without a hearing. (See id. [“[t]here is simply no authority for the proposition that a trial court necessarily abuses its discretion, in a motion proceeding, by resolving evidentiary conflicts without hearing live testimony].)

Judge of the Superior Court

FN 1 - Defendant Selena Thomas is not a moving party, although it also appears she can invoke arbitration as a third-party beneficiary or agent. Alternatively, she can voluntarily agree to participate in any binding arbitration.

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.