Judge: Teresa A. Beaudet, Case: 23STCV31030, Date: 2024-07-08 Tentative Ruling

Case Number: 23STCV31030    Hearing Date: July 8, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

On December 20, 2023, Plaintiff Jenica Olguin (“Plaintiff”) filed this action against Defendants Beverages & More, Inc., Beverages & More! Inc., and BevMo! Inc. The Complaint alleges causes of action for (1) FEHA employment discrimination, (2) failure to accommodate in violation of FEHA, (3) failure to engage in a timely and good-faith interactive process in violation of FEHA, (4) FEHA harassment, (5) FEHA retaliation, (6) failure to prevent or remedy discrimination, harassment, and/or retaliation in violation of FEHA, (7) wrongful discharge in violation of public policy, (8) intentional infliction of emotional distress, and (9) failure to permit inspection or copying of employment records.

 Beverages & More, Inc. and BevMo! Inc. (jointly, “Defendants”) now move for an order

compelling Plaintiff to submit all causes of action asserted against Defendants to binding arbitration, and dismissing, or in the alternative, staying, all causes of action asserted against Defendants. Plaintiff opposes.

Evidentiary Objections

The Court rules on Plaintiff’s evidentiary objections as follows:

Objection No. 1: overruled. The Court notes that no “Declaration of Amanda Flanagan” was filed in connection with the instant motion. In their response to Plaintiff’s evidentiary objections, Defendants state that they “are unfamiliar with an individual named Amanda Flanagan associated with this matter. Amanda Flanagan is not a declarant in support of Defendants’ Motion.” (Defendants’ Response at p. 1:17-19.)

Objection No. 2: overruled

The Court rules on Defendants’ evidentiary objections as follows:

Objection No. 1: overruled

Objection No. 2: overruled

Objection No. 3: overruled

Objection No. 4: overruled

Objection No. 5: sustained as to “there’s no proof of that,” and “[i]t would not have been hard for anyone with my BEVMO job application to login under my name,” overruled as to the remainder.

Objection No. 6: overruled

Objection No. 7: overruled

Objection No. 8: overruled

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, 413-414.)  

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

In the Complaint, Plaintiff alleges that she “started working for BEVMO in or around June of 2021. Plaintiff worked as a Retail Sales Associate with duties that included working as a cashier, sales floor merchandising, replenishment, and receiving in BEVMO’s Torrance, California store.” (Compl., ¶ 15.)

In support of the motion, Defendants submit the Declaration of Lyndsey LePage, who is currently the “Director, People & Culture of Defendants” and has “held this role since January 2021.” (LePage Decl., ¶ 2.) Ms. LePage states that “[t]o initiate the pre-employment onboarding process, Defendants sent each prospective employee who had successfully completed the application stage an e-mail to the individual’s email that the individual identifies on an application. This e-mail contained a unique hyperlink that directed the prospective employee to Defendants’ onboarding website. The unique hyperlink the prospective employee received expired within several days after e-mail receipt. Prospective employees then used this website to read, complete, and electronically sign onboarding documents.” (LePage Decl., ¶ 7.)

Ms. LePage states that “[p]rospective employees must log in to this website using their full legal name and the last four digits of their social security numbers. This information must exactly match the information the prospective employee listed on the application. If it does not match exactly, then the prospective employee cannot begin the onboarding process.” (LePage Decl., ¶ 8.) “Once the prospective employee logged in using the individual’s personal identification information, the ‘Welcome!’ page of the Employee Onboarding process notifies employees that their signature to onboarding documents are recorded electronically. Employees must click the box acknowledging this fact before they are permitted to continue with the onboarding process. After the employee clicks this box, the employee may proceed with filling out a variety of new-hire forms, including Forms W-4 and I-9. After filling out these forms, the next screen the employee is presented with is a screen where the employee must consent to electronically filling out the onboarding documents. This screen informs the employee that by consenting to this agreement, they are agreeing to use their ‘click’ as a stand-in for their written signature, which is electronically inscribed on the PDF document. Employees must click to consent to this e-signature agreement to proceed with the online onboarding documents.” (LePage Decl., ¶ 9.) 

Ms. LePage states that “[a]fter consenting to the e-signature agreement, employees were presented with a screen where they can view and agree to specific onboarding documents, such as the Employee Handbook and the arbitration agreement. For important documents, like the Handbook and the arbitration agreement, the employee cannot click to electronically sign the document until they first ‘view’ this document. In other words, to sign the arbitration agreement, the employee must first click ‘view,’ which opens the text of the arbitration agreement in a separate pop-up window. Only after the employee closes the pop-up window can the employee click a separate link to sign the arbitration agreement. Once the employee clicks that separate link to electronically sign the arbitration agreement, his or her electronic signature is date stamped by the system.” (LePage Decl., ¶ 10.)

Ms. LePage states that foregoing “safeguards and procedures” were “in existence when Plaintiff was going through the onboarding process in June 2021.” (LePage Decl., ¶ 11.) Ms. LePage states that “[o]n information and belief, based upon my review of Plaintiff’s records, Plaintiff must have performed each of the identified tasks and steps to have completed the onboarding documents.” (LePage Decl., ¶ 11.) Ms. LePage further states that “[o]n June 17, 2021, Plaintiff electronically signed, and thereby agreed to the terms of, Defendants’ arbitration agreement. Plaintiff’s ‘signature’ at the base of the arbitration agreement would only appear after Plaintiff clicked to electronically sign the arbitration agreement using the process described in the preceding paragraphs.” (LePage Decl., ¶ 12.) Ms. LePage indicates that “[a] true and correct copy of Plaintiff’s electronically signed arbitration agreement is attached as Exhibit 1.” (LePage Decl., ¶ 12.)

The “Arbitration Agreement” attached as Exhibit 1 to Ms. LePage’s declaration provides, inter alia, as follows:

“Any legally-cognizable controversy or claim arising out of or relating to my employment or termination of employment (including any post-termination claim) that cannot be resolved between the parties themselves, shall on the written request of either party be submitted and resolved by final and binding arbitration consistent with the Federal Arbitration Act, the California Arbitration Act, or their successors…

The parties intend that this arbitration procedure shall to the full extent permitted by law be the exclusive means of resolving all claims whether founded in fact or law between me, on one hand, and BevMo! and/or its associates, directors, officers or managers, on the other hand, arising out of or relating to the parties’ employment relationship and/or its termination, whether occurring during or after the employment relationship, including, but not limited to, any controversies or claims pertaining to wrongful or constructive discharge, personal injuries or other civil wrongs, violations of public policies or anti-discrimination statutes. The only claims not covered by this Agreement are those claims by law that are not subject to mandatory binding pre-dispute arbitration, and claims for workers compensation benefits and claims for unemployment insurance benefits. The parties expressly waive any right to have any such claim decided in a court of law and/or by a jury in a court proceeding…” (LePage Decl., ¶ 12, Ex. 1.)

Defendants assert that “Plaintiff’s claims are within the scope of her Arbitration Agreement. Because there is a valid Arbitration Agreement and all of Plaintiff’s claims are covered by its scope, the Court should compel arbitration.” (Mot. at p. 7:17-19.)

In the opposition, Plaintiff argues that “there is no agreement to arbitrate because Plaintiff never received, reviewed, or signed the arbitration agreement.” (Opp’n at p. 3:16-17.) Plaintiff cites to Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 838, where “Defendant and appellant, Moss Bros. Auto Group, Inc. (Moss Bros.), appeal[ed] from an order denying its petition to compel arbitration of the employment-related and putative class action, representative, and individual claims of its service technician employee, plaintiff and respondent, Ernesto Ruiz. The trial court denied the petition on the ground Moss Bros. did not meet its burden of proving the parties had an agreement to arbitrate the controversy.” The Court of Appeal “conclude[d] Moss Bros. did not present sufficient evidence to support a finding that Ruiz electronically signed the 2011 agreement,” and “affirm[ed] the order denying the petition.” (Ibid.)  

The Court of Appeal in Ruiz noted that “[u]nder Civil Code section 1633.7, enacted…as part of the Uniform Electronic Transactions Act…an electronic signature has the same legal effect as a handwritten signature (Civ. Code, § 1633.7, subd. (a) [“A ... signature may not be denied legal effect or enforceability solely because it is in electronic form.”] ).” (Ruiz v. Moss Bros. Auto Group, Inc., supra, 232 Cal.App.4th at p. 843.) However, “any writing must be authenticated before the writing, or secondary evidence of its content, may be received in evidence. Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law.” (Ibid. [internal quotations and citations omitted, emphasis in original].) “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.’ (Civ. Code, § 1633.9, subd. (a), italics added.)” (Ibid.)
            In Ruiz, Moss. Bros. submitted the declaration of its business manager, Mary K. Main, in support of its petition to compel arbitration. (Id. at p. 839.) The Court of Appeal found that “Main did not explain how she ascertained that the electronic signature on the [arbitration] agreement was ‘the act of’ Ruiz,” citing Civ. Code, § 1633.9, subd. (a). (Id. at p. 844.) After Ruiz stated that he did not recall electronically signing the agreement, Main explained in her reply declaration that the subject arbitration agreement “was part of an employee acknowledgment form that is presented to all Moss Bros. employees as part of a series of changes to the company’s employee handbook, and each employee is required to log into the company’s HR system, using his or her unique login ID and password, to review and sign the employee acknowledgment form.” (Id. at p. 844 [internal quotations omitted].) The Court of Appeal in Ruiz found as follows:

“Again, however, Main did not explain how, or upon what basis, she inferred that the electronic signature on the 2011 agreement was “the act of” Ruiz. (Civ. Code, § 1633.9, subd. (a).) This left a critical gap in the evidence supporting the petition.

Indeed, Main did not explain that an electronic signature in the name of “Ernesto Zamora Ruiz” could only have been placed on the 2011 agreement (i.e., on the employee acknowledgement form) by a person using Ruiz’s “unique login ID and password”; that the date and time printed next to the electronic signature indicated the date and time the electronic signature was made; that all Moss Bros. employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements; and the electronic signature on the 2011 agreement was, therefore, apparently made by Ruiz on September 21, 2011, at 11:47 a.m. Rather than offer this or any other explanation of how she inferred the electronic signature on the 2011 agreement was the act of Ruiz, Main only offered her unsupported assertion that Ruiz was the person who electronically signed the 2011 agreement. In the face of Ruiz’s failure to recall electronically signing the 2011 agreement, the fact the 2011 agreement had an electronic signature on it in the name of Ruiz, and a date and time stamp for the signature, was insufficient to support a finding that the electronic signature was, in fact, “the act of” Ruiz. (Civ. Code, § 1633.9, subd. (a).) For the same reason, the evidence was insufficient to support a finding that the electronic signature was what Moss Bros. claimed it was: the electronic signature of Ruiz. (Evid. Code, § 1400, item (a).) This was not a difficult evidentiary burden to meet, but it was not met here.” (Ruiz v. Moss Bros. Auto Group, Inc., supra, 232 Cal.App.4th at p. 844.)  

Plaintiff argues that “[h]ere, like Ruiz…Defendants are missing critical links in the analytical chain.” (Opp’n at p. 4:23-24.) Plaintiff asserts that “Ms. LePage’s declaration contains no evidence of 1) the alleged email sent to Plaintiff containing a unique hyperlink, 2) Plaintiff logging in and accessing Defendants’ website, 3) Plaintiff clicking a box on Defendants’ website acknowledging Plaintiff’s signature on onboarding documents would be recorded electronically, 4) Plaintiff’s confirmation of consent to electronically filling out onboarding documents, 5) Plaintiff’s confirmation of consent to Defendants’ e-signature agreement, or 6) Plaintiff specifically viewing the Arbitration Agreement.” (Opp’n at p. 5:15-20.) Plaintiff asserts that “Defendants have access to all this information,” but do not appear to provide any evidence to support this assertion. (Opp’n at p. 5:20.)

Plaintiff also notes that the Arbitration Agreement does not contain a time stamp for Plaintiff’s signature. In her supporting declaration, Plaintiff states that “Defendants produced nine (9) other documents bearing my signature, my manager’s signature, and a time stamp.” (Olguin Decl., ¶ 3.) Plaintiff also states in her declaration that “I have reviewed the ‘Arbitration Agreement’ (attached to the Lindsey LePage Declaration as Exhibit 1) and do not recall receiving, reviewing, or signing this document.” (Olguin Decl., ¶ 3.)

However, the Court finds that Defendants have provided sufficient evidence demonstrating the electronic signature on the subject Arbitration Agreement was “the act of” Plaintiff. (Civ. Code, § 1633.9, subd. (a).) As discussed above and as noted by Defendants, Ms. LePage states, inter alia, that “[t]o initiate the pre-employment onboarding process, Defendants sent each prospective employee…an e-mail…[that] contained a unique hyperlink that directed the prospective employee to Defendants’ onboarding website.” (LePage Decl., ¶ 7.) Ms. LePage states that “[p]rospective employees must log in to this website using their full legal name and the last four digits of their social security numbers.” (LePage Decl., ¶ 8.) Ms. LePage states that “…the employee is presented with…a screen where the employee must consent to electronically filling out the onboarding documents. This screen informs the employee that by consenting to this agreement, they are agreeing to use their ‘click’ as a stand-in for their written signature, which is electronically inscribed on the PDF document.” (LePage Decl., ¶ 9.) 

As discussed, Ms. LePage states that “[f]or important documents, like the Handbook and the arbitration agreement, the employee cannot click to electronically sign the document until they first ‘view’ this document. In other words, to sign the arbitration agreement, the employee must first click “view,” which opens the text of the arbitration agreement in a separate pop-up window. Only after the employee closes the pop-up window can the employee click a separate link to sign the arbitration agreement. Once the employee clicks that separate link to electronically sign the arbitration agreement, his or her electronic signature is date stamped by the system.” (LePage Decl., ¶ 10.) Ms. LePage states that foregoing “safeguards and procedures” were “in existence when Plaintiff was going through the onboarding process in June 2021,” and that “Plaintiff’s ‘signature’ at the base of the arbitration agreement would only appear after Plaintiff clicked to electronically sign the arbitration agreement using the process described in the preceding paragraphs.” (LePage Decl., ¶¶ 11-12.)

By contrast, in Ruiz, the declarant “did not explain how, or upon what basis, she inferred that the electronic signature on the 2011 agreement was ‘the act of’ Ruiz.” (Ruiz v. Moss Bros. Auto Group, Inc., supra, 232 Cal.App.4th at p. 844.) The declarant “only offered her unsupported assertion that Ruiz was the person who electronically signed the 2011 agreement.” (Ibid.)
            In the opposition, Plaintiff also asserts that “no arbitration agreement exists between Plaintiff and Beverages & More, Inc.” (Opp’n at p. 6:20.) Plaintiff asserts that “[o]nly Bevmo! Inc. is a party to the agreement, yet Beverages & More, Inc. is also a moving party.” (Opp’n at p. 6:21-22.) The Court notes that the first paragraph of the subject Arbitration Agreement provides that “In consideration of our mutual promises and our at-will employment relationship, and as an express condition of my employment with BevMo!, Inc. (‘BevMo!’), BevMo! and I agree as follows:…” (LePage Decl., ¶ 12, Ex. 1.)

In the reply, Defendants assert that Beverages & More, Inc. is a proper moving party and entitled to invoke the Arbitration Agreement. Defendants cite to Thomas v. Westlake (2012) 204 Cal.App.4th 605, 608-609, where “[a]n investment advisor and related defendants appeal[ed] the order denying their petition to compel an investor’s successor in interest to arbitrate claims alleging the defendants mismanaged the investor’s accounts. The trial court denied the petition on the grounds that the claims against two of the six defendants were not subject to arbitration because those defendants were not parties to any arbitration agreement, and that there was a possibility of¿conflicting rulings on common questions of law or fact if arbitration of the claims against the other four defendants were ordered.” The Court of Appeal reversed. (Id. at p. 609.)

The Thomas Court noted that “John contended at oral argument…that the allegations of agency he made in the operative complaint cannot be used to require him to arbitrate his claims against the defendants which are not parties to any of the agreements Katherine executed. According to John, agency is only a theory of tort liability by which he may hold those defendants responsible for the wrongdoing that allegedly arose out of the relationship created by those agreements.¿We disagree. Having alleged all defendants acted as agents of one another, John is bound by the legal consequences of his allegations.¿And, as the cases cited above hold,¿a plaintiff’s allegations of an agency relationship among defendants is sufficient to allow the alleged agents to invoke the benefit of an arbitration agreement executed¿by their principal even though the agents are not parties to the agreement.” (Thomas v. Westlake, supra, 204 Cal.App.4th at pp. 614-615 [internal citation omitted].)  

Defendants assert that here, “Plaintiff cannot on the one hand treat the entities as one and the same for purposes of availing herself a benefit then decline to accept the same proposition with respect to the Agreement.” (Reply at p. 5:5-7.) Defendants note that in the Complaint, Plaintiff alleges that “Defendants BEVERAGES & MORE, INC.; BEVERAGES & MORE! INC; BEVMO! INC. are hereinafter collectively referred to as ‘BEVMO’ or ‘DEFENDANT EMPLOYERS.’ Plaintiff is informed and believes and based thereon alleges that DEFENDANT EMPLOYERS acted in the capacity of ‘joint employers’ with respect to Plaintiff’s employment.” (Compl., ¶ 5.) In addition, the Court notes that Plaintiff alleges that she is “informed and believes and based thereon alleges that at all times, each Defendant, whether named or fictitious, was acting as an agent, employee, alter ego, joint venturer, joint employer, and/or integrated enterprise for or with each of the other Defendants and each were co-conspirators with respect to the acts and the wrongful conduct alleged herein, and/or acted within the scope of their authority and/or ratified such conduct of the other(s), so that each is responsible for the acts of the other in connection with the wrongful acts of such other Defendants.” (Compl., ¶ 7.)

In light of the foregoing, the Court agrees with Defendants that Beverages & More, Inc. can invoke the Arbitration Agreement.

Based on the foregoing, the Court finds that Defendants have established that an arbitration agreement exists and that it covers the claims alleged by Plaintiff in this action. Therefore, the burden now shifts to Plaintiff to prove a ground for denial.  

B.    Grounds to Deny Arbitration: Unconscionability

In the opposition, Plaintiff asserts that “the Arbitration Agreement is permeated with both procedural and substantive unconscionability.” (Opp’n at p. 8:10-11.)  

i.       Procedural 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 [quotations and citations 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.)

Plaintiff asserts that here, the Arbitration Agreement is “oppressive.” Plaintiff asserts that

“[a]ssuming Plaintiff saw the Arbitration Agreement, there is no dispute that she had no meaningful opportunity to negotiate the terms of the agreement; and (2) per Defendants’ argument, the Arbitration Agreement was provided as a condition of employment.” (Opp’n at p. 14:1-4.) In her supporting declaration, Plaintiff states that “[g]enerally speaking, at no point did Defendants ever explain what any of the documents were or that we could ask questions…Again, I do not even recall seeing the agreement at all, but I also do not remember Defendants saying anything about arbitration to us. During my time working for Defendants, nobody ever explained what arbitration meant, the specific waiver of my right to a jury trial, the rules that would govern arbitration or where to find them, how to initiate arbitration, how to select an arbitrator, or how to appeal the arbitration decision. I was never given an opportunity to negotiate any of the terms of my employment with Defendants either.” (Olguin Decl., ¶ 6.)

The Court notes that “[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¿¿¿.)¿Based on the foregoing, the Court finds that there is a low level of procedural unconscionability.¿¿ 

ii.              Substantive 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 quotations and citation omitted].)

First, Plaintiff asserts that the Arbitration Agreement is substantively unconscionable because it is “overly broad in its unlimited scope.” (Opp’n at p. 8:21-22.)

Plaintiff cites to Cook v. University of Southern California (2024) 102 Cal.App.5th 312, 321, where the Court of Appeal noted that by its express terms, the agreement in that case “requires the arbitration of ‘all claims, whether or not arising out of Employee’s University employment, remuneration or termination, that Employee may have against the University or any of its related entities, including but not limited to faculty practice plans, or its or their officers, trustees, administrators, employees or agents, in their capacity as such or otherwise; and all claims that the University may have against Employee.’ The plain language of the agreement requires Cook to arbitrate claims that are unrelated to her employment with USC.” The Court of Appeal in Cook found that “the trial court did not err in holding that the agreement’s broad scope is substantively unconscionable.” (Id. at p. 325.) Plaintiff contends that similarly here, the Arbitration Agreement requires Plaintiff “to arbitrate every possible claim against not just BEVMO, but a slew of other unnamed protected parties.” (Opp’n at p. 9:5-6.)

But as noted by Defendants, unlike the agreement in Cook, the Arbitration Agreement here provides that “[t]he parties intend that this arbitration procedure shall to the full extent permitted by law be the exclusive means of resolving all claims whether founded in fact or law between me, on one hand, and BevMo! and/or its associates, directors, officers or managers, on the other hand, arising out of or relating to the parties’ employment relationship and/or its termination, whether occurring during or after the employment relationship…” (LePage Decl., ¶ 12, Ex. 1, emphasis added.) By contrast, the Cook Court noted that “[t]he arbitration agreement drafted by USC applies to all claims ‘whether or not arising out of Employee’s University employment, remuneration or termination.’” (Cook v. University of Southern California, supra, 102 Cal.App.5th at p. 325.) Thus, the Court does not find that Plaintiff has shown that the Arbitration Agreement here is substantively unconscionable because “it is overly broad in its unlimited scope.” (Opp’n at p. 8:21-22.)

Next, Plaintiff asserts that the Arbitration Agreement is substantively unconscionable because “it is infinite in its duration.” (Opp’n at p. 10:22.)

In Cook, the Court of Appeal noted that “[t]he trial court also found the arbitration agreement was unconscionable because it survived indefinitely following Cook’s termination from USC. The agreement expressly states that it ‘shall survive the termination of Employee’s employment, and may only be revoked or modified in a written document that expressly refers to the ‘Agreement to Arbitrate Claims’ and is signed by the President of the University.” (Cook v. University of Southern California, supra, 102 Cal.App.5th at p. 325.) The Court of Appeal in Cook stated that “[w]e reject the argument that the arbitration agreement is terminable at will after a reasonable time and find the trial court did not err in holding the duration of the arbitration agreement is substantively unconscionable.” (Id. at p. 326.) Plaintiff notes that here, the Arbitration Agreement pertains to claims “arising out of or relating to the parties’ employment relationship and/or its termination, whether occurring during or after the employment relationship…” (LePage Decl., ¶ 12, Ex. 1, emphasis added.) Plaintiff asserts that the Arbitration Agreement is thus substantively unconscionable because it “purports to bind Plaintiff forever…” (Opp’n at p. 11:13-14.)  

In the reply, Defendants assert that “the infinite duration language in Cook is distinguishable from BevMo!’s Agreement. Unlike in Cook, the instant Agreement contains no language requiring a specific process for revocation or termination. An agreement without a duration and procedure for terminating the contract, by default, terminable at will after a reasonable time period.” (Reply at p. 7:12-15.) Defendants cite to Reigelsperger v. Siller (2007) 40 Cal.4th 574, which is discussed in Cook. The Reigelsperger Court noted that “like other contracts, arbitration agreements that do not specify a term of duration are terminable at will after a reasonable time has elapsed.” (Reigelsperger v. Siller, supra, 40 Cal.4th at p. 580.)

In Cook, the Court of Appeal found that “[t]he arbitration agreement specifically provides that it will survive unless and until Cook and USC’s president specifically terminate the agreement in a writing, signed by both parties, which expressly mentions the arbitration agreement. As in Zee, this is an express term of duration; thus Reigelsperger does not apply. However, the inclusion of such language also shows the parties did not contemplate that the arbitration agreement would be terminable at will.” (Cook v. University of Southern California, supra, 102 Cal.App.5th at p. 326.) Plaintiff does not point to any similar language in the Arbitration Agreement here providing that the agreement will survive unless the parties terminate the agreement in writing.

In light of the foregoing, the Court does not find that Plaintiff has shown that the Arbitration Agreement is substantively unconscionable because it is “infinite in duration.”

Plaintiff also asserts that Arbitration Agreement is substantively unconscionable because “it lacks mutuality as to all parties purportedly protected by the Agreement.” (Opp’n at p. 11:15-16.) Plaintiff notes that the subject Arbitration Agreement provides that “[t]he parties intend that this arbitration procedure shall to the full extent permitted by law be the exclusive means of resolving all claims whether founded in fact or law between me, on one hand, and BevMo! and/or its associates, directors, officers or managers, on the other hand…” (LePage Decl., ¶ 12, Ex. 1.) Plaintiff asserts that “[i]n Cook, the court invalidated a nearly identical provision…” (Opp’n at p. 11:27.)

The Court of Appeal in Cook noted that “[t]he trial court also found the agreement was unconscionable because it lacked mutuality. The agreement requires Cook to arbitrate any and all claims she may have against USC ‘or any of its related entities, including but not limited to faculty practice plans, or its or their officers, trustees, administrators, employees or agents, in their capacity as such or otherwise.’ However, the agreement does not require USC’s ‘related entities’ to arbitrate their claims against Cook.” (Cook v. University of Southern California, supra, 102 Cal.App.5th at p. 326.) The Court of Appeal in Cook found that “the trial court did not err in holding the arbitration agreement was substantively unconscionable for lack of mutuality in the claims that are subject to arbitration.” (Id. at p. 328.)

As discussed, the Arbitration Agreement here provides that “[t]he parties intend that this arbitration procedure shall to the full extent permitted by law be the exclusive means of resolving all claims whether founded in fact or law between me, on one hand, and BevMo! and/or its associates, directors, officers or managers, on the other hand, arising out of or relating to the parties’ employment relationship and/or its termination…” (LePage Decl., ¶ 12, Ex. 1, emphasis added.) Defendants assert that “[t]he use of the term ‘and/or’ in conjunction with identifying Plaintiff, BevMo! and its affiliates collectively as ‘parties’ is inclusive and indicates mutuality exists should Plaintiff wish to bring a claim in arbitration against one of BevMo!’s affiliates.” (Reply at p. 8:7-10.) The Court finds that Defendants have the better argument on this point. Thus, the Court does not find that Plaintiff has demonstrated that the Arbitration Agreement is substantively unconscionable because it lacks mutuality.

Based on the foregoing, the Court does not find that Plaintiff has demonstrated that the Arbitration Agreement here is substantively unconscionable. As noted by Plaintiff, “[t]he 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.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 [emphasis in original].)

C.    Plaintiff’s Request for Discovery and an Evidentiary Hearing

Lastly, Plaintiff states that she “requests the ability both to conduct discovery on the matters set forth in the accompanying declaration of Peter Javanmardi, and to present oral testimony at a hearing before this Court.” (Opp’n at p. 15:7-9.)

            With regards to the request to conduct discovery, Plaintiff’s counsel states in his supporting declaration that “[t]o fully evaluate whether there is an agreement to arbitrate, I believe we need discovery, including at least the following: (i) emails, in their native format, pertaining to the sending, receiving, and signing of the Arbitration Agreement; (ii) other agreements, whether or not they are related to arbitration; and (iii) all applicable Employee Handbooks; (iv) any documents or data related to Plaintiff’s alleged online access, review and signature on the Arbitration Agreement. Plaintiff may also need limited testimony from the following individuals: (i) Lyndsey LePage; and (ii) Fernando Figueroa.” (Javanmardi Decl., ¶ 8.)

However, as discussed in further detail above, the Court finds that Defendants have established that an arbitration agreement exists here and that it covers the claims alleged by Plaintiff in this action. In addition, Plaintiff does not appear to cite to any legal authority supporting her request to continue the hearing on the instant motion such that Plaintiff may conduct discovery.

            With respect to her request to present oral testimony, Plaintiff cites to California Rules of Court, rule 3.1306, which provides that “[a] party seeking permission to introduce oral evidence, except for oral evidence in rebuttal to oral evidence presented by the other party, must file, no later than three court days before the hearing, a written statement stating the nature and extent of the evidence proposed to be introduced and a reasonable time estimate for the hearing. When the statement is filed less than five court days before the hearing, the filing party must serve a copy on the other parties in a manner to assure delivery to the other parties no later than two days before the hearing.” (Cal. Rules of Court, rule 3.1306, subd. (b).) It does not appear that Plaintiff filed any such written statement.

            Plaintiff also cites to Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at page 414, where the Court of Appeal noted that “we agree that where--as is common with allegations of fraud such as are made here--the enforceability of an arbitration clause may depend upon which of two sharply conflicting factual accounts is to be believed, the better course would normally be for the trial court to hear oral testimony and allow the parties the opportunity for cross-examination.” However, the instant matter does not appear to involve allegations of fraud. The Rosenthal Court also noted that “[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.” (Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at p. 414.)[1]

            Based on the foregoing, the Court denies Plaintiff’s request to conduct discovery and to present oral testimony.

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 July 8, 2025, at 10:00 a.m. in Dept. 50. The parties are ordered to file a joint report regarding the status of the arbitration five court days prior to the status conference, with a courtesy copy delivered directly to Department 50.  

Defendants are ordered to provide notice of this Order. 

DATED:  July 8, 2024                                   

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court