Judge Richard S. Whitney, Case Number: 37-2023-00026845-CU-OE-CTL, Date: 2024-04-12 Tentative Ruling

Judge: Richard S. Whitney, Case: 37-2023-00026845-CU-OE-CTL, Date: 2024-04-12 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - April 11, 2024

04/12/2024 10:30:00 AM C-68 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Richard S. Whitney

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Civil - Unlimited Other employment Motion Hearing (Civil) 37-2023-00026845-CU-OE-CTL BAUMES VS TB SF PAYROLL & MANAGEMENT LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING: DEFENDANTS TB SF PAYROLL & MANAGEMENT, LLC'S, SUGAR FACTORY BRANDS, LLC'S, AND CHARISSA DAVIDOVICI'S MOTION TO COMPEL ARBITRATION AND STAY ACTION is GRANTED.

Defendants TB SF Payroll & Management, LLC, Sugar Factory Brands, LLC and Charissa Davidovici ('Defendants') seek to compel Plaintiff Sean D. Baumes' ('Plaintiff') individual claims and to dismiss and/or stay the remaining claims. The parties' requests for judicial notice are granted to the extent permitted. (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117.) The Court elects to consider Plaintiff's late filed opposition.

CCP section 1281.2 provides: On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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 the revocation of the agreement. (c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact....

(CCP �1281.2.) The moving party must prove by a preponderance of the evidence the existence of the arbitration agreement and the dispute is covered by the agreement. (Rosenthal v. Great Western Fin.

Securities Corp. (1996) 14 Cal.4th 394, 413.) The burden then shifts to the resisting party to prove by a preponderance of the evidence a ground for denial, e.g., unconscionability. (Id.) Defendants have met their burden to demonstrate there is an arbitration agreement that covers the disputes at issue in this action. '[A] petitioner is not required to authenticate an opposing party's signature on an arbitration agreement as a preliminary matter in moving for arbitration or in the event the authenticity of the signature is not challenged.' (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846.) Plaintiff denies creating an account with iSolved and Efficient Hire. Plaintiff also objects to the declaration of Rebecca Torres. Plaintiff's objections to the declaration of Rebecca Torres are overruled.

'[T]he burden of authenticating an electronic signature is not great.' (Ruiz, supra, 232 Cal.App.4th at Calendar No.: Event ID: TENTATIVE RULINGS

3098864 44 CASE NUMBER: CASE TITLE: BAUMES VS TB SF PAYROLL & MANAGEMENT LLC [IMAGED] 37-2023-00026845-CU-OE-CTL 844.) 'An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.' (Civ. Code, � 1633.9.) The declaration of Rebecca Torres, and attached evidence, establish the efficacy of the security procedures. Plaintiff was required to create an account using Plaintiff's email, a unique password and pin number. (Decl. Torres, �� 6-25.) 'In order to have access to an employee's unique username, the manager would need access to the employee's personal email.' (Decl. Torres, � 26.) 'The Plaintiff's signature would only appear on the bottom right hand corner of each document after he input his four digit pin number authorizing his electronic signature to be affixed to the documents.' Decl. Torres, � 19.) 'As a part of Plaintiff's onboarding, he was provided, and electronically signed his new hire paperwork, including the Arbitration Agreement and Handbook Acknowledgement on February 4, 2022.' (Decl. Torres, � 28.) Finally, Ms. Torres 'did not witness any employees or managers accessing another employee's onboarding forms. Nor did any employees notify [her] or any member of HR that any manager had accessed an employee's onboarding.' (Decl. Torres, �� 26-27.) The Court finds Defendants have met their burden to authenticate the arbitration agreement by showing sufficient security measures under the circumstances. (See Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1062.) The Court finds all of Plaintiff's arguments to suggest someone else must have caused Plaintiff's electronic signature to appear on the arbitration agreement are unpersuasive. Plaintiff does not provide any evidence that anybody from Defendants had access to Plaintiff's email. Plaintiff does not provide evidence for his speculations that Ms. Torres had backend access to change the electronic documents and/or that Mr. Eversole may have accessed the documents to sign them for Plaintiff.

Plaintiff also argues the arbitration agreements are unconscionable.

The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.' (Stirlen v. Supercuts, Inc., supra, 51 Cal.App.4th at p. 1533 (Stirlen).) But they need not be present in the same degree. 'Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.' (15 Williston on Contracts (3d ed.

1972) � 1763A, pp. 226-227; see also A & M Produce Co., supra, 135 Cal.App.3d at p. 487.) In other words, the 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 v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) The procedural unconscionability element focuses on 'oppression' or 'surprise' due to unequal bargaining power. The substantive unconscionability element focuses on 'overly harsh' or 'one-sided' results. (Id.) 'The general principles of unconscionability are well established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party.' (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125.) 'Arbitration contracts imposed as a condition of employment are typically adhesive.' (Kho, supra, 8 Cal.5th at 126.) 'Where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high.' (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 796.) Substantive unconscionability 'traditionally involves contract terms that are so one-sided as to 'shock the conscience,' or that impose harsh or oppressive terms.' (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1213.) Plaintiff asserts this case is like Kho. The Court disagrees. There is evidence to indicate that Plaintiff had 45 minutes or more to review the documents, Plaintiff speaks and reads English, the terms of the agreement are not complicated, and the text of the agreement is not difficult to read as was the case in Kho. In short, this case is distinguishable from Kho. The Court finds Plaintiff has not demonstrated Calendar No.: Event ID: TENTATIVE RULINGS

3098864 44 CASE NUMBER: CASE TITLE: BAUMES VS TB SF PAYROLL & MANAGEMENT LLC [IMAGED] 37-2023-00026845-CU-OE-CTL oppression nor surprise, such that the level of procedural unconscionability is low.

As to substantive unconscionability, Plaintiff asserts the parties will likely not agree on an arbitrator such that the employee must select JAMS or ADR and that the JAMS rules and the ADR rules contain substantively unconscionable provisions because they required the Plaintiff's attorney to agree to pay the costs of the arbitrator up front if the Plaintiff initiates an arbitration. However, the cost to Plaintiff is limited, under the applicable JAMS rules and the arbitration agreement, to the initial commencement fee.

Further, the arbitration agreement limits how much that cost can be. Under the arbitration agreement, it is 'an amount equal to the filing fee to initiate a claim in the court of general jurisdiction in the state in which [the employe was] last employed by the Company.' (Decl. Torres, Exhibit D.) Finally, the applicable JAMS rules and the arbitration agreement limit the ability of the arbitrator to award attorney's fees to that which is permitted under federal or state law, which in California precludes the awarding of an employer's attorney's fees from the employee.

Plaintiff also asserts the limitations on discovery are unconscionable. The arbitration agreement provides the arbitrator shall have the 'the discretion to issue protective orders or otherwise limit discovery where reasonably necessary, taking into account the parties' mutual desire to have a speedy, less-formal, cost-effective dispute-resolution mechanism.' (Decl. Torres, Exhibit D.) The Court finds Plaintiff has not demonstrated the discovery limitation is unconscionable. (See Sanchez v. Carmax Auto Superstores California, LLC (2014) 224 Cal.App.4th 398, 404-406.) The arbitration agreement here is even less restrictive than in Sanchez.

Even if the Court were to find some of the provisions were unconscionable, the Court could sever the unconscionable provisions. The Court finds that it is unnecessary to sever any provision, but that if it were required to do so to render the arbitration agreement enforceable, it could do so without altering the main purpose of the agreement.

Finally, Plaintiff asserts Defendants have waived their right to compel arbitration.

In determining waiver, a court can consider (1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether 'the litigation machinery has been substantially invoked' and the parties 'were well into preparation of a lawsuit' before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) 'whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place'; and (6) whether the delay 'affected, misled, or prejudiced' the opposing party.

(St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196 [Citations and quotes omitted].) '[A] party who resists arbitration on the ground of waiver bears a heavy burden ... and any doubts regarding a waiver allegation should be resolved in favor of arbitration.' (Id. at 1195.) The Court finds Plaintiff has not met the heavy burden to demonstrate waiver. Plaintiff has not demonstrated prejudice such as use of discovery not allowable in arbitration.

Plaintiff's individual PAGA claims are arbitrable and the remaining representative PAGA action may be stayed pending the arbitration of Plaintiff's individual PAGA claims. (Adolph v. Uber Technologies, Inc.

(2023) 14 Cal.5th 1104.) The motion is granted. The Court elects to stay the remainder of this matter that is not compelled to arbitration. A status conference is hereby set for October 25, 2024, at 10:00 am.

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