Judge Thomas D. Long, Case Number: 23STCV14238, Date: 2024-01-11 Tentative Ruling

On June 20, 2023, Plaintiff Guillermo Romero Salas filed this action against Defendants BrightView Landscape Services, Inc. (erroneously sued as BrightView Landscape Development, Inc.) and Mario Izarpate.

On July 20, 2023, Defendant BrightView Landscape Services, Inc. filed a motion to compel arbitration.

Plaintiff’s request for judicial notice of the Complaint is denied as unnecessary because it is already part of this case’s record.

When seeking to compel arbitration of a plaintiff’s claims, the defendant must allege the existence of an agreement to arbitrate. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.) The burden then shifts to the plaintiff to prove the falsity of the agreement. (Ibid.) After the Court determines that an agreement to arbitrate exists, it then considers objections to its enforceability. (Ibid.)

The Court must grant a petition to compel arbitration unless the defendant has waived the right to compel arbitration or if there are grounds to revoke the arbitration agreement. (Ibid.; Code Civ. Proc., § 1281.2.) Under California law and the Federal Arbitration Act (“FAA”), an arbitration agreement may be invalid based upon grounds applicable to any contract, including unconscionability, fraud, duress, and public policy. (Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154, 165-166.)

Defendant contends that on May 29, 2017, Plaintiff and Defendant executed an Arbitration Agreement. (Motion at pp. 3-4.) Defendant provides a copy of the arbitration agreement. (Alameda Decl., Ex. A [“Arbitration Agreement”].) Through the Arbitration Agreement, the parties agreed to arbitrate “any and all existing or future disputes or claims between Employee and Employer, that arise out of or relate to Employee’s recruitment, employment, or separation from employment with Employer . . . whether the disputes or claims arise under common law, or in tort, contract, or pursuant to a statute, regulation, or ordinance now in existence or which may in the future be enacted or recognized, including, but not limited to” claims for wrongful termination, unfair business practices, and wages.

Plaintiff argues that the Arbitration Agreement “does not fully and properly identify itself as a party” because the agreement “merely identifies itself as ‘BRIGHTVIEW,’ not BrightView Landscape Development, Inc.” (Opposition at p. 8.) The Court also notes that Tammy Alameda declares that she reviewed the documents maintained in the regular course of business for “Bright View Tree Care Services, Inc.,” not Defendant BrightView Landscape Development, Inc. (Alameda Decl. ¶ 1.) However, Plaintiff admits that he signed the Arbitration Agreement on May 29, 2017 (Salas Decl. ¶ 4), indicating Exhibit A’s authenticity. (Evid. Code, § 1414, subd. (b).)

Plaintiff also argues that the Arbitration Agreement does not apply to Defendant Mario Izaparte. (Opposition at pp. 8-9; see id. at pp. 11-12.) Defendant Mario Izaparte is not a party to this motion. To the extent that any arbitration will affect Plaintiff’s claims against Izaparte, the Court addresses that issue at the end of this order.

Plaintiff argues that the FAA does not apply because his work did not involve interstate commerce, and “an arbitration agreement does not become subject to the FAA merely because the agreement states it does.” (Opposition at pp. 9-10.) Plaintiff’s cited case does not support this broad proposition. The court in Garrido v. Air Liquide Industrial U.S. LP (2015) 241 Cal.App.4th 833, 839-840 stated that “a transportation worker’s employment agreement does not become subject to the FAA simply because the agreement declares that it is subject to the FAA” This is because, “[b]y stating that it is subject to and governed by the FAA, the agreement necessarily incorporates section 1 of the FAA, which includes the exemption for transportation workers.” (Id. at p. 840.) Plaintiff is not an exempt transportation worker. (Salas Decl. ¶ 3.)

Here, the parties agreed in the Arbitration Agreement that “Employer is engaged in transaction involving interstate commerce,” and they “agree[d] that this is an agreement to arbitrate under the Federal Arbitration Act.” This is sufficient to show that the Arbitration Agreement is subject to the FAA. (See Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122 [“[T]here is no ambiguity regarding the parties’ intent. They adopted the FAA—all of it—to govern their arbitration.”]; Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 383 [“Under United States Supreme Court jurisprudence, we examine the language of the contract to determine whether the parties intended to apply the FAA to the exclusion of California procedural law.”].)

Because the FAA applies, Labor Code section 229 does not bar arbitration. (Perry v. Thomas (1987) 482 U.S. 483, 491 [“This clear federal policy [of enforcing private agreements] places § 2 of the [Federal Arbitration] Act in unmistakable conflict with California’s § 229 requirement that litigants be provided a judicial forum for resolving wage disputes. Therefore, under the Supremacy Clause, the state statute must give way.”]; see Opposition at pp. 10-11.)

Labor Code section 432.6 also does not bar arbitration. (Lab. Code, § 432.6, subd. (f) [“Nothing in this section is intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act.”]; Lab. Code, § 432.6, subd. (h) [“This section applies to contracts for employment entered into, modified, or extended on or after January 1, 2020.”]; see Opposition at p. 11.)

Defendant has satisfied its burden of showing the existence of an agreement to arbitrate.

Arbitration agreements for FEHA claims must (1) provide for neutral arbitrators, (2) provide for more than minimal discovery, (3) require a written award, (4) provide for all of the types of relief that would otherwise be available in court, and (5) not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum. (Armendariz, supra, 24 Cal.4th at p. 102.) These requirements may apply to non-FEHA employment claims. (See Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 254 [applying the Armendariz factors in the context of claims under the Labor Code].)

The Arbitration Agreement provides for arbitration in accordance with AAA’s National Rules for the Resolution of Employment Disputes. These rules provide for the selection of a neutral arbitrator. The arbitrator “shall allow the discovery authorized under the Federal Rules of Civil Procedure or any other discovery required by state law in arbitration proceedings” and shall render a written award and opinion. Defendant will pay the arbitrator’s fee “and any other type of expense or cost that the Employee would not be required to bear if the dispute or claim was brought in court, as well as any other expense or cost that is unique to arbitration.” Although the Arbitration Agreement does not expressly provide for all of the types of relief that would otherwise be available in court, to the extent that anything in the arbitration rules or the Agreement “conflict with any arbitration procedures required by law, the arbitration procedures required by law shall govern.”

For an arbitration agreement to be unenforceable as unconscionable, both procedural and substantive unconscionability must be present. (Armendariz, supra, 24 Cal.4th at p. 114.) “[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.” (Ibid.)

“The relevant factors in assessing the level of procedural unconscionability are oppression and surprise.” (Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 997.) “‘The oppression component arises from an inequality of bargaining power of the parties to the contract and an absence of real negotiation or a meaningful choice on the part of the weaker party.’” (Abramson v. Juniper Networks, Inc. (2004) 115 Cal.App.4th 638, 656.) “The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party’s review of the proposed contract was aided by an attorney.” (Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1348, fn. omitted.) “The component of surprise arises when the challenged terms are ‘hidden in a prolix printed form drafted by the party seeking to enforce them.’” (Ibid.) “The adhesive nature of the employment contract requires [the court] to be ‘particularly attuned’ to [Plaintiff’s] claim of unconscionability [citation], but [the court] do[es] not subject the contract to the same degree of scrutiny as ‘[c]ontracts of adhesion that involve surprise or other sharp practices’ [citation].” (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245 (Baltazar).)

Plaintiff argues the Arbitration Agreement does not include a copy of the applicable arbitration rules, relying in part on Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387 (Trivedi). (Opposition at pp. 15-16.) In Trivedi and the cases cited therein, the unconscionability arguments depended on the arbitration rules in question. (Baltazar, supra, 62 Cal.4th at p. 1246.) Those cases “thus stand for the proposition that courts will more closely scrutinize the substantive unconscionability of terms that were ‘artfully hidden’ by the simple expedient of incorporating them by reference rather than including them in or attaching them to the arbitration agreement.” (Ibid.) When a challenge to the enforcement of an arbitration agreement has nothing to do with the particular rules, the failure to attach the rules does not affect unconscionability. (Ibid.) Here, the challenge has nothing to do with the particular rules. And in any event, the Arbitration Agreement states that printed copies of the rules are available by request, and it includes a link to obtain a copy of the AAA rules.

Plaintiff also argues that the Arbitration Agreement is oppressive because Plaintiff was required to sign it to maintain his employment. (Opposition at pp. 16-17.) Not so. At the end of the Arbitration Agreement is an Opt-Out Alternative, which allows an employee to opt-out of the Arbitration Agreement within 30 days.

“‘Substantive unconscionability pertains to the fairness of an agreement’s actual terms and to assessments of whether they are overly harsh or one-sided. [Citations.] 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.’”’ [Citation.]’” (Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 85.)

Plaintiff argues that the Arbitration Agreement lacks mutuality due to the injunctive relief carve-out. (Opposition at pp. 13-15.) In the Arbitration Agreement, the parties agreed to exclude “claims for temporary or preliminary injunctive relief (including a temporary restraining order) in aid of arbitration or to maintain the status quo pending arbitration, if the award to which the party may be entitled may be rendered ineffectual without such relief, in a court of competent jurisdiction in accordance with applicable law.” Plaintiff contends that these claims are more likely to be brought by an employer against its employees. (Opposition at p. 15.) There is no indication that either side is more likely to seek injunctive relief to maintain the status quo pending arbitration.

Plaintiff has not shown any procedural or substantive unconscionability, and the Arbitration Agreement should not be invalidated.

A court must grant a motion to compel arbitration unless a party to the arbitration agreement is also a party to a pending court action with a third party arising out of the same transaction and there is a possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., § 1281.2, subd. (c).) If the court does determine that subdivision (c) applies, the court may order arbitration among the parties who have agreed to arbitration and stay the pending court action or special proceeding pending the outcome of the arbitration proceeding, or may stay arbitration pending the outcome of the court action. (Code Civ. Proc., § 1281.2.)

The second cause of action for harassment is brought against both Defendants, alleging the same collective wrongful conduct and harm to Plaintiff. Plaintiff’s and Defendant’s arbitration of these issues therefore creates a possibility of conflicting rulings on a common issue of law or fact. Accordingly, the Court will also stay this action against Defendant Mario Izarpate.

The motion to compel arbitration is GRANTED. The entire action is STAYED pending the conclusion of the arbitration.

A Status Conference re: Arbitration is scheduled for January 10, 2025 at 8:30 AM in Department 48 at Stanley Mosk Courthouse. Five court days before, the parties are to file a joint report stating the name of their retained arbitrator and the status of arbitration.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court