Judge Upinder S. Kalra, Case Number: 23STCV07061, Date: 2023-10-25 Tentative Ruling

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On March 30, 2023, Plaintiff William Velis (Plaintiff) filed a Complaint against Defendants Pacific Bell Telephone Co. and AT&T Services, Inc. (Defendants). The Complaint has eight causes of action for:

2. Retaliation for Requesting a Reasonable Accommodation for a Disability in Violation of FEHA;

5. Failure to Take all Reasonable Steps Necessary to Prevent Discrimination and Retaliation;

According to the Complaint, Plaintiff worked for Defendants as a Planning & Designing Engineer from about 2011 to March 2023. Plaintiff broke his hand on January 5, 2023 and required medical treatment. Plaintiff alleges Defendants fired him when he requested time off to heal.

Plaintiff filed a request for dismissal of Defendant AT&T Services, Inc. on April 11, 2023.

Moving Defendant timely filed the instant motion on August 1, 2023. Plaintiff timely filed an opposition on October 12, 2023. Moving Defendant timely filed a reply on October 18, 2023.

Under California law, the trial court has authority to compel arbitration pursuant to CCP §1281.2 where a written agreement for such arbitration exists and one of the parties refuses to arbitrate. Specifically, the statute 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 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 arbitrate the controversy exists.” The statute further sets forth four grounds upon which the trial court may refuse to compel arbitration: (a) the right to compel arbitration was waived, (b) recission of the agreement, (c) there is a pending action or special proceeding with a third party, arising out of the same transaction; and (d) petitioner is a state or federally chartered depository institution.

“[T]he petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence . . . .”¿¿(Giuliano v. Inland Empire Personnel, Inc.¿(2007) 149 Cal.App.4th 1276, 1284¿(Guiliano).)¿“In determining whether an arbitration agreement applies to a specific dispute, the court may examine only the agreement itself and the complaint filed by the party refusing arbitration [citation]. The court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the¿circumstances under which the agreement was made.”¿¿(Weeks v. Crow¿(1980) 113 Cal.App.3d 350, 353.)¿ “To determine whether a contractual arbitration clause requires arbitration of a particular controversy, the controversy is first identified and the issue is whether that controversy is within the scope of the contractual arbitration clause.”¿¿(Titolo¿v. Cano¿(2007) 157 Cal.App.4th 310, 316.)¿ “Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.”¿¿(California Correctional Peace Officers¿Ass'n¿v. State¿(2006) 142 Cal.App.4th 198, 205.)¿¿¿

“[A] party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.”¿¿(Giuliano, supra, at p. 1284.)¿

In determining the enforceability of an arbitration agreement, the court considers “two ‘gateway issues’ of arbitrability: (1) whether there was an agreement to arbitrate between the parties, and (2) whether the agreement covered the dispute at issue.”¿ (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961 (Omar).)¿¿¿

The moving party can meet its initial burden of proving the existence of an arbitration agreement by attaching a copy of the Agreement to this motion bearing the signature of the opposing party. (See Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 541-543 [“The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the¿respondent's signature.”].) Alternatively, the moving party can meet its initial burden by setting forth the agreement’s provisions in the motion. (See Cal. Rules of Court, rule 3.1330; see also Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.)

Here, Moving Defendant met its initial burden because it attached a copy of the Management Arbitration Agreement (MAA). (Giordano Decl., Exhibit 2.) The parties do not contest Plaintiff completed the “Review Complete” which constituted his signature.

Moving Defendant contends the MAA covers the subject dispute because Plaintiff filed an employment action that is not otherwise excluded by the MAA. Plaintiff does not oppose this.

Here, the court agrees that the MAA covers Plaintiff’s claims against Moving Defendant. Notably, the MAA states that “covered claims include without limitation those arising out of or related to your employment or termination of employment with the Company and any other disputes regarding the employment relationship, trade secrets, unfair competition, compensation, breaks and rest periods, termination, defamation, retaliation, discrimination or harassment and claims arising under the Uniform Trade Secrets Act, Civil Rights Act of 1964, Americans with Disabilities Act, Age Discrimination in Employment Act, Family Medical Leave Act, Fair Labor Standards Act, Genetic Information Non-Discrimination Act, and state statutes and local laws, if any, addressing the same or similar subject matters, and all other state and local statutory and common law claims.” (Giordano Decl., Exhibit 2.) The MAA specifically carves out class actions, claims for workers compensation, state disability insurance, unemployment insurance benefits, and Employee Retirement Income Security Act claims or claims before an administrative agency. (Ibid.) Plaintiff filed an employment action under FEHA and the CFRA which arose under his employment with Moving Defendant.

Once it is determined that a valid arbitration agreement exists, the burden shifts to the opposing party to “prove by a preponderance of the evidence any defense to the petition.” (Lacayo v. Catalina Restaurant Group Inc. (2019) 38 Cal.App.5th 244, 257, review denied (Nov. 13, 2019)).

Plaintiff raises two issues: 1. The Arbitration Agreement should not be enforced because it is an “opt-out” agreement; and 2. The Arbitration Agreement should not be enforced because it is ambiguous as to parties.

Plaintiff contends that the MAA is unenforceable because it is a prohibited opt-out agreement. Moving Defendant argues that California enforces opt-out provisions in arbitration agreements.[1]

Moving Defendant sent the MAA to Plaintiff on January 25, 2021.[2] (Giordano Decl., Exhibit 1.) Plaintiff had until March 26, 2021 to opt-out using the links Moving Defendant provided. (Ibid.) The timeline to opt-out, the link to opt-out, and an email to contact in case of difficulties opting-out are also provided in the MAA. (Giordano Decl., Exhibit 2.) Plaintiff did not argue that he did not see the opt-out procedure, that it was hidden, or that the timeframe to opt-out was too short. Plaintiff also does not contest that he opened the MAA and clicked the “review complete” button. (See Giordano Decl., Exhibit 5.) Taken together, it is reasonable to conclude Plaintiff agreed to the MAA because he did not opt-out. (See, e.g., Gentry v. Superior Court (2007) 42 Cal.4th 443 (Gentry) at p. 468.)

Accordingly, Plaintiff’s argument that the opt-out provision renders the MAA unenforceable fails.

Plaintiff contends the MAA is ambiguous as to which parties it applies. Moving Defendant argues Plaintiff creates ambiguity where none exists.

Whether a contract is ambiguous is a question of law. (Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239.) For a contract to be ambiguous, it must be susceptible to two or more reasonable interpretations. (See, e.g., Sterling Builders, Inc. v. United Nat. Ins. Co. (2000) 79 Cal.App.4th 105, 111.) Additionally, contract terms must be examined in context of the entire contract – not in a vacuum. (Id. at p. 112.)

Here, the court agrees with Moving Defendant. First, the MAA states that it applies “to any claim that you may have against any of the following: (1) any AT&T company, (2) its present or former officers, directors, employees or agents in their capacity as such or otherwise; (3) the Company’s parent, subsidiary and affiliated entities, and all successors and assigns of any of them . . . .” (Giordano Decl., Exhibit 2.) In the context of the entire contract, this clause clearly refers to claims. Additionally, the summary at the start of the MAA states “you and the AT&T company that employs you . . . .”[3] (Ibid.) In the context the entire contract, it is clear that “the AT&T company that employs you” means Moving Defendant.

[1] Plaintiff argues that Moving Defendant “cannot cite one single case from California upholding opt-out agreement in arbitration” but Moving Defendant has, in fact, cited several. (Securitas Sec. Serv. USA, Inc. v. Superior Court, (2015) 234 Cal.App.4th 1109; Craig v. Brown & Root, (2000) 84 Cal.App.4th 416; Mitchell v. Am. Fair Credit Ass’n (2002) 99 Cal.App.4th 1345.) Indeed, Plaintiff’s own reliance on Gentry is misplaced because the Court there found that the opt-out provision was enforceable because it was neither inconspicuous or difficult to understand and that the plaintiff “manifested his intent to use . . . his failure to opt-out, as a means of accepting the arbitration agreement.” (Gentry, supra, at p. 468.) Put differently, the defendant there had reason to believe that the plaintiff’s failure to opt-out meant he assented to arbitration. (Ibid.)

[2] Indeed, Moving Defendant apparently sent email reminders three more times: February 8, 2021, February 22, 2021, and March 8, 2021. (Giordano Decl. Exhibit 4.)

[3] The court reads Plaintiff’s argument that he could not know “the Company” referred to Pacific Bell as disingenuous and rejects it for several reasons. First, he identifies Pacific Bell & Telephone Co as his employer from 2011 through March 2023. (See, generally, Complaint.) Since he received the MAA on January 25, 2021, by his own allegations, he was working for Moving Defendant. (Giordano Decl., Exhibit 1.) Second, Plaintiff groups Pacific Bell & Telephone Co. and AT&T Services, Inc. in the same paragraph for identification purposes in his Complaint. (Compl. ¶ 2.) Third, the MAA clearly states that “you and the AT&T company that employs you . . . agree” which is not the parade of parties Plaintiff proposes. Indeed, the clause Plaintiff refers to indicating the numerous parties is part of the MAA that discusses the claims covered – not the contracting parties. (Giordano Decl., Exhibit 2.)