Judge: Stephen P. Pfahler, Case: 23STCV31617, Date: 2024-09-05 Tentative Ruling

Case Number: 23STCV31617    Hearing Date: September 5, 2024    Dept: 68

Dept. 68

Date: 9-5-24

Case #23STCV31617

Trial Date: Not Set

ARBITRATION

MOVING PARTY: Defendant, Montecito Heights Healthcare & Wellness Centre, LP

RESPONDING PARTY: Plaintiff, Rebecca Pina

RELIEF REQUESTED

Motion to Compel Arbitration

SUMMARY OF ACTION

Plaintiff Rebecca Pina began work as a Certified Nursing Assistant with Defendant Montecito Heights Healthcare & Wellness Centre, LP on March 6, 2019. In June 2020, Plaintiff reported of alleged mistreatment of patients by a coworker, which led to the termination of said coworker. Plaintiff alleges retaliatory conduct began occurring from a remaining coworker in the form of a higher number of patient assignments.

In September 2020, Plaintiff underwent foot surgery, and returned to work with accommodation instructions. The accommodation was disregarded.

In a subsequent meeting on October 19, 2020, to address concerns, a supervisor cited to the prior report against the terminated colleague, and terminated Plaintiff.

On December 27, 2023, Plaintiff filed a complaint against Defendants for 1. Disability Discrimination (Govt. Code § 12940, et seq.) 2. Retaliation in Violation of California Family Rights Act (Govt. Code § 12945.2) 3. Interference in Violation of California Family Rights Act (Govt. Code § 12945.2) 4. Retaliation (Gov. Code § 12940(h)) 5. Failure to Provide Reasonable Accommodation (Gov. Code § 12940(m)) 6. Failure to Engage in Interactive Process (Gov. Code § 12940(n)) 7. Failure to Prevent Discrimination and Retaliation (Govt. Code § 12940 et seq.) 8. Retaliation (Labor Code § 1102.5 et seq.), and 9. Retaliation (Labor Code § 6310/6311). Defendant answered on February 29, 2024.

RULING: Granted.

Defendant Montecito Heights Healthcare & Wellness Centre, LP moves to compel arbitration on the complaint of plaintiff Rebecca Pina. Defendants move to compel arbitration based on the arbitration provision in the “Arbitration Agreement.” Defendant maintains all claims in the operative complaint are subject to arbitration under the terms of the agreement. Plaintiff in opposition acknowledges the agreement, but maintains unconscionability in the execution of the agreement. Defendant in reply reiterates the execution of the agreement and coverage of the dispute by said agreement, and denies any efforts to negotiate new terms or seek outside advice.

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.) “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.” (Code Civ. Proc., § 1281.2.)

The law creates a general presumption in favor of arbitration. In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. “‘Under “both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.”’” (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 861.) “Private arbitration is a matter of agreement between the parties and is governed by contract law. (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413-414; Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164–165; Hotels Nevada v. L.A. Pacific Ctr., Inc. (2006) 144 Cal.App.4th 754, 758.) Any challenges to the formation of the arbitration agreement should be considered before any order sending the parties to arbitration. The trier of fact weighs all evidence, including affidavits, declarations, documents, and, if applicable, oral testimony to determine whether the action goes to arbitration. (Hotels Nevada v. L.A. Pacific Ctr., Inc., supra, 144 Cal.App.4th at p. 758.)

Defendants present both a copy of the “Application for Employment” and “Agreement to Be Bound by Alternative Dispute Resolution Policy.” [Declaration of Carl Henry, Ex. A-B.] Again, Plaintiff offers no dispute as to the signature. The court also finds the terms address all claims presented in the complaint.

Defendant also maintains the agreement is governed by the FAA, though the location of any such language in the agreement remains unidentified. Defendant also represent interstate commerce based on the provision of healthcare through interstate communication infrastructure. [Henry Decl.]

Barring a conflict supporting a preemption of a specific provision under FAA, the court adheres to the California standard for compelling arbitration in that FAA and California adhere to the same standards for review of arbitration agreements. The court finds no conflict with the FAA under the terms of the agreement. (Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477–479; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346; see Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1119; Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906.) Plaintiff submits no opposition. Defendants present no conflicting provision thereby preempting application of California law. The court addresses the standard.

The burden therefore shifts to Plaintiff to establish a lack of enforceability of the arbitration agreement. (Rosenthal v. Great Western Fin'l Securities Corp., supra, 14 Cal.4th at pp. 413-414; Gamboa v. Northeast Community Clinic, supra, 72 Cal.App.5th at pp. 164–165; Hotels Nevada v. L.A. Pacific Ctr., Inc., supra, 144 Cal.App.4th at p. 758.) Plaintiff presents a summary of law regarding an effective unfair adhesion contract based on reliance on the sole two sentence denial of knowledge of the agreement as the basis of support.

Unconscionability claims have both a “‘procedural’” and “‘substantive’” element. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1531.) “‘Procedural unconscionability’” concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1329.) “‘The procedural element focuses on two factors: “oppression” and “surprise.”  “Oppression” arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice. “Surprise” involves the extent to which the supposedly agreed-upon terms of the bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputed terms.’” (Stirlen v. Supercuts, Inc., supra, 51 Cal.App.4th at p. 1532.) “Substantive unconscionability” involves contracts leading to “‘“overly harsh”’” or “‘“one-sided”’” results.’” … “[U]nconscionability turns … on an absence of ‘justification “for it…” [and therefore] must be evaluated as of the time the contract was made.’” (Ibid.)

In the employment context, a mandatory arbitration agreement is enforceable, if it “(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102.) Required execution of an arbitration agreement as a condition of employment may constitute an unconscionable provision, where the contract lacks mutuality and/or imposes a disadvantage on the employee. (Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at pp. 114-118; Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071-1072.) A showing of procedural unconscionability will not invalidate an arbitration clause, but can lead to greater scrutiny under the substantive standard, thereby supporting invalidation. (Davis v. TWC Dealer Group, Inc. (2019) 41 Cal.App.5th 662, 674 accord OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 129-130.)

Following Armendariz and continued examination into unequal bargaining circumstances challenging arbitration clauses, California law offers further guidance into the adhesion contract circumstances (e.g. an agreement substantively presented as “take or it leave it” the circumstances of which potentially impose a disadvantage on the employee). “With respect to preemployment arbitration contracts, we have observed that ‘the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.’” (OTO, L.L.C. v. Kho, supra, 8 Cal.5th at pp. 126-127 accord Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at p. 115; Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478 [322 Cal.Rptr.3d 825, 837]; Hasty v. American Automobile Association of Northern California, Nevada & Utah (2023) 98 Cal.App.5th 1041, 1055-1056; Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 179-181; see Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1351; Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 705.)

Plaintiff presents an articulated declaration regarding the onboarding process as a moment of job necessity, combined with a lack of financial resources to seek outside advice, and lack of opportunity to inquire on the agreement. Plaintiff concedes to an inability to understand the terms, even if given the opportunity given the density and language of the agreement. The declaration also presents implicit concern for potentially risking the hire upon an attempt at negotiation. [Declaration of Rebecca Pina.]

Defendant correctly notes the failure to read an agreement in no way precludes enforceability in cases of non-adhesion agreements. (Bolanos v. Khalatian (1991) 231 Cal.App.3d 1586, 1590.) Nevertheless, the relied upon authority predates or addresses specific statutory authority not applicable and not reflective of the current public policy trend towards greater consideration of the circumstances surrounding “adhesion” like presentations of employment arbitration agreements. (McManus v. CIBC World Markets Corp. (2003) 109 Cal.App.4th 76, 87; Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1292; Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1127.) “Both procedural and substantive elements must be present to conclude a term is unconscionable, but these required elements need not be present to the same degree.” (Ramirez v. Charter Communications, Inc., supra, 16 Cal.5th 478 [322 Cal.Rptr.3d at p. 837] accord Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1243.)

The court accepts the declaration of Plaintiff regarding the circumstances, as supporting a finding of procedural unconscionability. Nevertheless, the court considers both elements: “[A]lthough adhesion alone generally indicates only a low degree of procedural unconscionability, the potential for overreaching in the employment context warrants close scrutiny of the contract's terms.” Ramirez v. Charter Communications, Inc., supra, 16 Cal.5th 478 [322 Cal.Rptr.3d at p. 838.] The circumstances stated in the declaration of Plaintiff support a finding for a form of procedural unconscionability, but the court finds lacking support in the substantive unconscionability support argument.

Plaintiff challenges the discovery rules as improperly limiting without identification of the level of “any discovery standards or ensure any minimum level of discovery.” [Opp., 11:12-13.] The agreement states “the parties shall have the right to take deposition and to obtain discovery regarding the subject matter of the action and to use and exercise all of the same rights, remedies and procedures ... as provided for in the civil discovery statutes...”

The court otherwise finds no other substantively unconscionable terms. The court therefore finds no factual basis of support for the argument of unconscionability. The motion to compel arbitration is GRANTED.

“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.” (Code Civ. Proc., § 1281.4.) The action is stayed.

The court will set an OSC re: Status of Arbitration and Stay at the time of the hearing concurrent with the Case Management Conference.

Moving Defendants to give notice.