Judge: Teresa A. Beaudet, Case: 22STCV26687, Date: 2023-03-07 Tentative Ruling

Case Number: 22STCV26687    Hearing Date: March 7, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

On August 17, 2022, Plaintiff Sri Ramanathan (“Plaintiff”), in pro per, filed this action against G2 Secure Staff LLC (“G2 Secure Staff”) and Saeed Bholat (“Bholat”) (jointly, “Defendants”). The Complaint asserts causes of action for (1) FEHA retaliation, (2) FEHA retaliation, (3) failure to prevent discrimination, (4) “prevention of employee’s Weingarten rights – FEHA discrimination,” (5) “civil rights violation – use of video camera – FEHA discrimination,” (6) “failure to provide progressive discipline – FEHA discrimination,” (7) “failure to provide evidence – FEHA discrimination,” and (8) wrongful termination in violation of public policy.[1]

Defendants now move for an order compelling binding arbitration and staying all proceedings. Plaintiff opposes.[2]

Request for Judicial Notice

The Court grants Defendants’ request for judicial notice. The Court notes that it takes

judicial notice only of the existence of the notices attached as Exhibits 1-4 to the request.

Legal Standard

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. Securities Corp. (1996) 14 Cal.4th 394, 413.)   

Generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Code Civ. Proc., § 1281.2; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” (Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (“FAA”), which governs all agreements to arbitrate in contracts “involving interstate commerce.” (9 U.S.C. § 2, et seq.; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

            Discussion

A.    Existence of Arbitration Agreement

Defendants provide evidence that Plaintiff commenced employment with G2 Secure Staff on or about February 26, 2018 as a Terminal Agent. (Elliott Decl., ¶ 9.) At the time Plaintiff filled out his online employment application, all online applications contained a Pre-Dispute Resolution Agreement in the same form as that signed by Plaintiff. (Elliott Decl., ¶ 6.) Defendants indicate that Plaintiff’s application shows that the Pre-Dispute Resolution Agreement was part of several pages of documents all containing Plaintiff’s e-signature, personal information unique to Plaintiff, such as his social security number, employment history, address, email, telephone number, and other identifying information. (Elliott Decl., ¶ 8.)

The Pre-Dispute Resolution Agreement provides, inter alia, that “[o]ther than as provided in this agreement, in the event a dispute arises between you and the Company, or its officers, directors, employees, representatives, successors, assigns or agents in their capacity as such, arising out of and/or regarding your employment…such  disputes shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act. This obligation binds the Company as well as the employees. Both the Company and you agree that by agreeing to binding arbitration, you both give up the right to trial by jury.” (Elliott Decl., ¶ 6, Ex. 1.)

In the opposition, Plaintiff asserts that he did not sign the Pre-Dispute Resolution Agreement. The Court notes that Plaintiff does not provide any declaration under penalty of perjury or any other evidence to support this assertion.

Moreover, the Pre-Dispute Resolution Agreement contains the text “ELECTRONIC SIGNATURE: Please type your name as it is listed in the document above: Sri Ramanathan.” (Elliott Decl., ¶ 6, Ex. 1.) Defendants note that “an electronic signature has the same legal effect as a handwritten signature…” (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 843, citing Civ. Code, § 1633.7, subd. (a) [‘A … signature may not be denied legal effect or enforceability solely because it is in electronic form.’]). In addition, “Civil Code section 1633.9 addresses how a proponent of an electronic signature may authenticate the signature—that is, show the signature is, in fact, the signature of the person the proponent claims it is. The statute states: ‘(a) 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.’” (Ruiz v. Moss Bros. Auto Group, Inc., supra, at p. 843 [internal emphasis omitted].)

Defendants provide evidence that in January 2017, G2 Secure Staff utilized a third party vendor, ADP, to run and manage the online application process. (Schoeberl Decl., ¶ 3.) To access the application, applicants such as Plaintiff needed to do the following: (1) access the G2 Secure Staff website; (2) click on a particular job location; (3) click on a particular job position; and (4) click apply to begin the application process. (Schoeberl Decl., ¶ 4.) After accessing the initial application page, Plaintiff was required to then click the “Apply” button, which initiated the application process. (Schoeberl Decl., ¶ 5.) Prior to accessing the actual application, Plaintiff was required to create a unique login and password, in addition to providing a personal email address to be associated with his account. (Schoeberl Decl., ¶ 5.)  

After completing the application, Plaintiff was then directed to a screen which contained G2 Secure Staff’s pre-dispute resolution agreement and pre-employment agreement. (Schoeberl Decl., ¶ 8.) The pre-dispute agreement and the pre-employment agreement is preceded by the following statement, which is listed on the top of the page: “Please read the following agreement carefully before submitting. Only complete applications will be considered.” (Schoeberl Decl.,   ¶ 8.) After reviewing each of the agreements, Plaintiff was then instructed to again submit his e-signature acknowledging and confirming his consent to the application and agreements by typing in his name exactly as he did to initiate the application. (Schoeberl Decl., ¶ 8.) On this particular page, a failure to type the applicant’s name would result in the conclusion of the application process and Plaintiff would not have been able to submit his application to be considered for employment with G2 Secure Staff. (Schoeberl Decl., ¶ 8.) Once Plaintiff submitted his application, the program hard-coded and encrypted it so that it could not be modified after the fact. (Schoeberl Decl., ¶ 9.) Neither G2 Secure Staff nor ADP had the ability to modify Plaintiff’s application, nor did they have access to Plaintiff’s unique password. (Schoeberl Decl., ¶ 9.) Plaintiff does not appear to address this evidence in the opposition.

Plaintiff also asserts that Bholat is not covered by Plaintiff’s Pre-Dispute Resolution Agreement because he did not sign the agreement. However, as set forth above, the Pre-Dispute Resolution Agreement provides, inter alia, that “[o]ther than as provided in this agreement, in the event a dispute arises between you and the Company, or its officers, directors, employees, representatives, successors, assigns or agents in their capacity as such, arising out of and/or regarding your employment…such  disputes shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act. This obligation binds the Company as well as the employees. Both the Company and you agree that by agreeing to binding arbitration, you both give up the right to trial by jury.” (Elliott Decl., ¶ 6, Ex. 1, emphasis added.) In the Complaint Plaintiff alleges that Bholat is “the Account Manager for G2.” (Compl., ¶ 4.)

Plaintiff also cites to Code of Civil Procedure section 1281.2, subdivision (c), which provides that “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that 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:…(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. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition...”

Plaintiff asserts that Code of Civil Procedure section 1281.2, subdivision (c) is applicable here, because “the relevant NLRB charges are specifically brought against the Defendants G2 Secure Staff LLC, which is also a party to Plaintiff’s lawsuit, and that the said NLRB charges arise out of the same cause of action, namely Plaintiff’s alleged wrongful termination, without which, the said NLRB charges could not have arisen.” (Opp’n at p. 13:3-6.)

However, as Defendants note, Exhibit 4 to Plaintiff’s Complaint in this action includes a September 30, 2020 NLRB Charge against SEIU USWW, not G2 Secure Staff . (Compl., ¶ 11, Ex. 4.) SEIU USWW is not a defendant in this action.

Exhibit 4 to the Complaint also includes a January 13, 2021 NLRB Charge against G2 Secure Staff (Case “31-CA-288909”). (Compl., ¶ 11, Ex. 4.) The January 13, 2021 Charge alleges that “[o]n August 19, 2020, the Employer discriminated against employee Sri Ramanathan by discharging him in retaliation for and/or in order to discourage protected concerted activities. On August 19, 2020, the Employer discriminated against employee Sri Ramanathan by discharging him in order to discourage union activities or membership.” (Compl., ¶ 11, Ex. 4.) In connection with the reply, Defendants indicate that Plaintiff withdrew his January 2021 NLRB Charge (Case 31-CA-288909). (Woods Decl., ¶ 4, Ex. 3.) This is acknowledged by Plaintiff in the Complaint, in which he alleges, “See Exhibit 5 [sic]: NLRB charges dated 01/13/2021. Unfortunately, these charges had to be withdrawn later, as it was revealed that the action might be outside the NLRB’s limitation period.” (Compl., ¶ 12.)

Plaintiff also attaches as Exhibit “6” to the Complaint a December 14, 2021 NLRB Charge against G2 Secure Staff. (Compl., ¶ 13, Ex. 6.) Defendants argue that “[t]o the extent Plaintiff attempts argue that this motion to compel arbitration should be denied based on the pending NLRB charge(s), the NLRB only has jurisdiction over the question of whether G2 Secure Staff/the Union violated federal labor law…As such, there is no basis for a finding that the NLRB could issue a conflicting determination regarding the issue of whether G2 Secure staff wrongfully terminated Plaintiff on the bases alleged in his Complaint or that the outcome of an arbitration relating to the issues alleged in the litigation might implicate issues that would be decided by the NLRB in the unfair labor practice cases.” (Reply at p. 7:26-8:5.)

 Indeed, Plaintiff’s December 14, 2021 NLRB Charge alleges that the basis of the Charge is that “[w]ithin the past 6 months, the Employer violated Section 8(a)(1) of the National Labor Relation [sic] Act by: 1. maintaining an unlawful arbitration agreement that was not properly disclosed to employees thereby by depriving employees of their due process and right to go to Court; and 2. enforcing an unlawful arbitration agreement.” (Compl., ¶ 13, Ex. 6, Item 2.) Plaintiff does not allege a cause of action in the instant Complaint for violation of the National Labor Relations Act. Thus, the Court does not find that there is a “possibility of conflicting rulings on a common issue of law or fact” for purposes of Code of Civil Procedure section 1281.2, subdivision (c).

Lastly, Plaintiff acknowledges that his “claims against all Defendants stem from alleged wrongful termination of his employment and those incidental claims, that is, claims that arose as a result of the wrongful termination.” (Opp’n at p. 4:5-7.)  

The Court finds that Defendants have established that an arbitration agreement exists and that it covers the claims asserted by Plaintiff in this lawsuit.

B.    Grounds to Deny Arbitration

Plaintiff asserts that there is a number of grounds to deny arbitration.

First, Plaintiff argues that “no copy of the document was printed and delivered or emailed to Plaintiff following employment acceptance. All these add to the ‘fraud’ employed by the Defendant to ‘impute’ the unsigned arbitration agreement to Plaintiff, to which he never signed or would have agreed to sign.” (Opp’n at p. 8:5-8.) The Court notes that Plaintiff does not provide any evidence in support of this assertion, or legal authority demonstrating that such circumstances would constitute “fraud.”

            Unconscionability 

Procedural unconscionability concerns the manner in which the contract was negotiated and the parties’ circumstances at that time. It focuses on the factors of oppression or surprise. ¿(Kinney v. United Healthcare Servs. (1999) 70 Cal.App.4th 1322, 1329¿¿.) “¿Oppression generally takes the form of a contract of adhesion, 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.¿” (¿¿Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 84 [internal quotations omitted]¿¿.) Surprise occurs “¿where the allegedly unconscionable provision is hidden within a prolix printed form.¿” (¿¿Pinnacle Museum Tower Assn. v. Pinnacle Market Development, LLC (2012) 55 Cal.4th 223, 247¿¿.) ¿In addition, “[w]hen … 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.’¿” (Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704¿¿.)   

Plaintiff argues that he “was only given the option of an electronic application, which he was not accustomed to, and he recalls being assisted by a G2 member of staff, who hurriedly [sic] helped him and others to complete the application within the G2 offices itself.” (Opp’n at  p. 9:1-4.) The Court notes that Plaintiff fails to provide any evidence in support of this assertion.

            Plaintiff also argues that the subject Pre-Dispute Resolution Agreement has tiny print, but then states that “[t]he only way it can be readable is by enlarging the document in a computer screen, and by moving the document left to right and try to manage reading each line.” (Opp’n at p. 7:23-25.) However, Plaintiff does not state that he could not read the Pre-Dispute Resolution Agreement. As discussed, Defendants provide evidence that the Pre-Dispute Resolution Agreement was contained on its own page of the employment application, which instructed Plaintiff to “Please read the following agreement carefully before submitting.” (Schoeberl Decl., ¶ 8.) Defendants also note that “[o]rdinarily, one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it. If he cannot read, he should have it read or explained to him.” (Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163 [internal quotations omitted].)

Based on the foregoing, the Court finds that there is a low level of procedural unconscionability.  

“¿Substantive unconscionability pertains to the fairness of an agreement’s actual terms and to assessments of whether they are overly harsh or one-sided. A contract term is not substantively unconscionable when it merely gives one side a greater benefit; rather, the term must be so one-sided as to shock the conscience.¿” (¿¿Carmona v. Lincoln Millennium Car Wash, Inc., supra, 226 Cal.App.4th at p. 85 [internal quotation and citation omitted]¿¿.)  

Plaintiff argues that “[j]ust because both parties might have mutual rights to arbitrate through this alleged agreement, there is no question that one is at a higher risk than the other because of the costs-award-hurdle. What this means is that whereas the employer defendant is able to take that risk, the low-paid, Plaintiff would not be able to be [sic] to do so. This significant disparity in turn is a deterrent to arbitration and therefore cannot be mutual, as claimed.” (Opp’n at p. 10:12-16.) The Court does not entirely understand what Plaintiff means by the “costs-award-hurdle.” In addition, the Court notes that the Pre-Dispute Resolution Agreement provides that “[t]he Company will pay the fees and costs of the arbitrator in excess of the amount of any initial filing fee a party would be required to pay to commence an action in any court in the State of  California that otherwise would have jurisdiction to hear such claim, unless prohibited by the jurisdiction in which you live or were last employed by the Company, in which case the Company  and you will share the arbitrator’s fees and costs. Except as set forth above, the Company will pay any other JAMS administrative fees, the arbitrator’s fees, and any additional fees unique to arbitration. You and the Company shall each pay for your own costs and attorneys’ fees incurred, including costs of discovery, if any, except that as a part of any remedy that may be awarded, the arbitrator shall award the prevailing party costs and attorneys’ fees but only to the extent authorized by the applicable substantive law.” (Elliott Decl., ¶ 6, Ex. 1.)

Based on the foregoing, the Court does not find that Plaintiff has met his burden of demonstrating that the Pre-Dispute Resolution Agreement is unconscionable

            Waiver

Plaintiff also argues that “through its dilatory tactics employed in disclosing the existence of the alleged arbitration agreement, Defendant has ‘waived its right’ to invoke arbitration.” (Opp’n at p. 8:13-14.) The Court notes that Plaintiff does not provide supporting evidence of any such “dilatory” tactics. In addition, the Court does not find that Plaintiff has demonstrated that Defendant waived its right to compel arbitration. The Complaint in the instant action was filed on August 17, 2022. Plaintiff filed a “Proof of Electronic Service” of the Complaint on Defendants on September 7, 2022. Shortly thereafter, Defendants filed the instant motion on September 27, 2022.

C.    Stay

Code of Civil Procedure section 1281.4 states that the court shall stay the action or proceeding if the court has ordered arbitration. (Code Civ. Proc., § 1281.4.) Accordingly, the case is stayed pending completion of arbitration. 

Conclusion

For the foregoing reasons, Defendants’ motion to compel arbitration is granted. The entire action is stayed pending completion of arbitration of Plaintiff’s arbitrable claims.

The Court sets an arbitration completion status conference on March 7, 2024 at 10:00 a.m. in Dept. 50. The parties are ordered to file a joint report regarding the status of the arbitration by February 29, 2024, with a courtesy copy delivered directly to Department 50. Defendants are ordered to provide notice of this Order.

DATED:  March 7, 2023                               

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court