Judge Thomas D. Long, Case Number: 23STCV29607, Date: 2025-01-07 Tentative Ruling

On December 4, 2023, Plaintiff Maria Castellanos filed this action against Defendants Active Life, LLC, and Aston Carter, Inc. On February 29, 2024, Plaintiff filed her First Amended Complaint (FAC) against Defendants. The FAC alleges (1) discrimination on the basis of sex/gender, including pregnancy, in violation of FEHA; (2) harassment on the basis of sex/gender, including pregnancy, in violation of FEHA; (3) failure to provide reasonable accommodation in violation of FEHA; (4) violation of California’s Pregnancy Disability Leave Laws; (5) failure to prevent discrimination, harassment, and retaliation in violation of FEHA; (6) wrongful termination of employment in violation of public policy; and (7) intentional infliction of emotional distress.

On May 23, 2024, Defendant Aston Carter, Inc., (Defendant) filed a motion to compel arbitration. Plaintiff opposes Defendant’s motion.

Defendant has requested that the Court take judicial notice of the arbitration agreements and minute orders granting motions to compel arbitration in 16 other cases. The Court grants Defendant’s request.

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.)

Plaintiff was employed by Defendant Aston Carter, Inc., and was assigned to work at Active Life as a Patient Care Coordinator from September 15, 2022, to December 10, 2022. (Durham Decl. ¶ 4.) Defendant contends that Plaintiff electronically signed a Mutual Arbitration Agreement on September 5, 2022, in connection with her employment onboarding process. (Durham Decl. ¶ 11.) Defendant provided a copy of the arbitration agreement. (Durham Decl., Ex. B [“Arbitration Agreement”].) Through the Arbitration Agreement, Plaintiff agreed that “all disputes, claims, complaints, or controversies (“Claims”) that I may have against Aston Carter, Inc. and/or any of its subsidiaries, affiliates, officers, directors, employees, agents, and/or any of its clients or customers (collectively and individually the “Company”), or that the Company may have against me, including contract claims; tort claims; discrimination and/or harassment claims; retaliation claims; claims for wages, compensation, penalties or restitution; and any other claim under any federal, state, or local statute, constitution, regulation, rule, ordinance, or common law, arising out of and/or directly or indirectly related to my application for employment with the Company, and/or my employment with the Company, and/or the terms and conditions of my employment with the Company, and/or termination of my employment with the Company (collectively “Covered Claims”), are subject to confidential arbitration pursuant to the terms of this Agreement and will be resolved by Arbitration and NOT by a court or jury. The parties hereby forever waive and give up the right to have a judge or a jury decide any Covered Claims.” (Durham Decl., Ex. B, p. 1.) The Arbitration Agreement is electronically signed by Plaintiff and a representative of the company using a plain font. (Durham Decl., Ex. B., p. 3.)

Plaintiff argues that she does not remember seeing or signing the Arbitration Agreement because if she had seen it, she would not have agreed to it. (Opposition at pp. 3-8.) Plaintiff claims that she had no idea that she was signing an arbitration agreement with the onboarding documents, and she claims that she felt rushed to return the signed documents. (Castellanos Decl. ¶¶ 4-5.) Plaintiff declares that she has no recollection of agreeing to arbitrate and that she has never seen the arbitration agreement attached as Exhibit B to the Durham Declaration. (Castellanos Decl. ¶¶ 6, 8.)

When a plaintiff does not recall signing or agreeing to an electronic agreement, the defendant has the burden of proving by a preponderance of the evidence that an electronic signature or acceptance is authentic, i.e., that it was the act of the plaintiff. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846.) “[A] party may establish that the electronic signature was ‘the act of the person’ by presenting evidence that a unique login and password known only to that person was required to affix the electronic signature, along with evidence detailing the procedures the person had to follow to electronically sign the document and the accompanying security precautions.” (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 545.)

With its reply, Defendant provided a supplemental declaration from Brandi Durham, who is the Employee Relations Manager for Allegis Group, Inc., the parent company of Defendant Aston Carter, Inc. (Durham Supp. Decl. ¶ 2.) She has personal knowledge of Aston Carter’s onboarding process and the process by which it obtains pre-employment electronic paperwork, including the onboarding process used by Plaintiff Maria Castellanos. (Durham Supp. Decl. ¶ 3.)

During and after Plaintiff’s employment, Aston Carter has used a software system known as “Onboarding Automation” for its pre-employment electronic paperwork. (Durham Supp. Decl. ¶ 5.) Before an individual can complete the hiring process, they must “register with Onboarding Automation using a personal email address as the username and password, and complete the new-hire paperwork online.” (Durham Supp. Decl. ¶ 6.) Once an employment offer has been extended, a member of Aston Carter’s Filed Support Group completes necessary fields in Onboarding Automation specific to the applicant’s anticipated assignment to initiate a welcome email, which contains a web-link for Onboarding Automation and is sent to the applicant’s personal email address that he or she provided to Aston Carter. (Durham Supp. Decl. ¶ 6.) The applicant is the only person who can edit their onboarding documents and the only person who can access their account once they have created it. (Durham Supp. Decl. ¶ 6.) Aston Carter’s employees are not able to see or change the applicant’s password or otherwise log in to the account. (Durham Supp. Decl. ¶ 6.)

To electronically sign a document in Onboarding Automation, an applicant must check a box that states that “I acknowledge I have read and understand the materials above,” then the applicant clicks on a button titled “Electronically Sign,” and this generates an electronic signature on the signature line of the document. (Durham Supp. Decl. ¶ 8.) The date and time stamp next to or below the signature reflects the date and time that the applicant electronically signed the document. (Durham Supp. Decl. ¶ 8.) The generation of an electronic signature prompts the next document in the queue to appear, and documents cannot be skipped without being acknowledged or signed. (Durham Supp. Decl. ¶ 8.)

Once an applicant signs the onboarding forms, they are submitted for review and are locked and cannot be edited. (Durham Supp. Decl. ¶ 9.) At no time can anyone access or edit the applicant’s signature line. (Durham Supp. Decl. ¶ 9.) The green box at the bottom of the Arbitration Agreement that states when the Arbitration Agreement was signed is only generated when the applicant signs the document. (Durham Supp. Decl. ¶ 9.)

The AG Onboarding number in the bottom corner of the Arbitration Agreement reflects the applicant’s information number and business identification number. (Durham Supp. Decl. ¶ 11.) The date next to the number reflects when an employee accessed the document after it was signed by the applicant. (Durham Supp. Decl. ¶ 12.)

Durham states that on the date Plaintiff signed the onboarding documents, she completed and electronically signed 15 documents, including the Arbitration Agreement. (Durham Supp. Decl. ¶ 16.) Durham maintains that no one edited Plaintiff’s onboarding documents between the time Plaintiff signed them and submitted them for review. (Durham Supp. Decl. ¶ 17.)

Durham finishes by stating that the security procedures in the onboarding process, including the use of a personal email address and confidential password selected by and only known to Plaintiff, the fact that only Plaintiff could access her onboarding documents prior to submitting them (and once she submitted them her signature lines were locked), and the highly factual and detailed personal and biographical information collected during the onboarding process in the other documents, leads Durham to conclude that only Plaintiff could have electronically signed the Arbitration Agreement on September 5, 2022. (Durham Supp. Decl. ¶ 19.)

Defendant has shown that Plaintiff used a unique login and password known only to her in order to sign the Arbitration Agreement, and the electronic signature could only be the act of Plaintiff. If Plaintiff did not read the pages before she checked the box to sign the document, that is still not a basis for deny arbitration. “‘[I]t is generally unreasonable . . . to neglect to read a written agreement before signing it.’” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 914-915; Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 [“An arbitration clause within a contract may be binding on a party even if the party never actually read the clause”].)

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 v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 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 with JAMS in accordance with the JAMS Employment Arbitration Rules and Procedures. JAMS’s Employment Arbitration Rules and Procedures provide for discovery. (Kun Decl., Ex. D.) The arbitrator will have authority to award all remedies that would be available in court, and the arbitrator will issue a final and binding written award, subject to review on the grounds set forth in the FAA. Defendant will pay all arbitrator’s fees and costs beyond what would normally be incurred in court.

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 that the arbitration agreement was presented on a take it or leave it basis because there was no option to skip the onboarding documents and she did not know that she could refuse to sign any of the onboarding documents. (Opposition at pp. 8-9.) Arbitration agreements that are “take it or leave it” have some degree of procedural unconscionability. (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 796.) However, other than Plaintiff stating that she did not know that she could refuse to sign the Arbitration Agreement, the Arbitration Agreement appears to have been voluntary. The first sentence of the Agreement states that “I…voluntarily agree that…” (Durham Decl., Ex. B, p. 1.) Even if it were not voluntary because the document was not skippable, “a compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment or offered as a ‘take it or leave it basis.’” (Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4^th 1105, 1129.)

Additionally, an arbitration agreement being presented as an adhesion contract does not, by itself, make the arbitration agreement unenforceable where the plaintiff has not shown that the agreement is also substantively unconscionable. (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4h 1199, 1212-1213.) Here, as mentioned below, Plaintiff has made no attempt to argue that the Arbitration Agreement is substantively unconscionable.

Accordingly, the Arbitration Agreement is not procedurally unconscionable on the basis of any alleged contract of adhesion.

Plaintiff cannot establish oppression. She cannot claim that she attempted to negotiate the terms of the Arbitration Agreement because she claims that she was not even aware that her onboarding forms included the Arbitration Agreement. (Opposition at p. 9.) Furthermore, she has not presented evidence that the Agreement was presented to her in a way that would make her feel compelled to agree to it in particular. She claims that she felt rushed to return the signed paperwork so that she would not lose her job (Castellanos Decl. ¶ 4), but there is no evidence that this fear was well-grounded or based on any influence from her employer.

Plaintiff has not established surprise because she did not address this issue in her opposition.

Accordingly, Plaintiff has not established oppression or surprise in relation to the Arbitration Agreement, so she has not established 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. [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 does not argue that there was any substantive unconscionability in the Arbitration Agreement.

Because Plaintiff has not established procedural and substantive unconscionability, the Arbitration Agreement is enforceable.

The motion to compel arbitration is GRANTED. The entire action is STAYED pending the arbitration. A Status Conference re: Arbitration is scheduled for ___________ 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