Judge Upinder S. Kalra, Case Number: 23STCV15885, Date: 2023-11-02 Tentative Ruling

On July 7, 2023, Plaintiff Vicky Garcia (Plaintiff) filed a Complaint against Defendants Macy’s, Inc., Macy’s West Stores, Inc., Macy’s Retail Holdings, LLC, and Karina Vasquez with thirteen causes of action for: (1) Discrimination in Violation of Gov’t Code §§ 12940 et seq.; (2) Retaliation in Violation of Gov’t Code §§12940 et seq.; (3) Failure to Prevent Discrimination and Retaliation in Violation of Gov’t Code §12940(k); (4) Failure to Provide Reasonable Accommodations in Violation of Gov’t Code §§12940 et seq.; (5) Failure to Engage in a Good Faith Interactive Process in Violation of Gov’t Code §§12940 et seq.; (6) Violation of California Family Rights Act, Gov’t Code §§12945.2 et seq; (7) For Declaratory Judgment; (8) Wrongful Termination in Violation of Public Policy; (9) Failure to Pay Wages; (10) Failure to Provide Meal and Rest Periods (Lab. Code §§226.7, 512); (11) Failure to Provide Itemized Wage Statements (Cal. Labor Code §§226 et seq.); (12) Waiting Time Penalties (Cal. Labor Code §§201-203); and (13) Unfair Competition (Cal. Bus. & Prof. Code §17200 et seq.).

According to the Complaint, Plaintiff was hired by Defendants on August 15, 2025 as a full-time non-exempt kitchen Sales Associate. She alleges she worked 35-40 hours per week from about July 7, 2019 to June 11, 2020 and was paid $16.60 per hour from July 7, 2019 to September 21, 2019 and $18.00 per hour from September 22, 2019 to June 11, 2020. She further alleges she was not always provided with uninterrupted 30-minute meal periods and 10-minute rest periods. Plaintiff alleges that on or about June 11, 2020 she sustained injuries that made it difficult for her to walk. Due to her injuries, Plaintiff requested time to recover and reasonable accommodations. From June 10, 2020 to June 14, 2021, Plaintiff took medical leave due to her injuries and kept Defendants regularly updated as to her ongoing medical situation. On June 14, 2021, Plaintiff’s medical providers cleared her for work. On June 15, 2021, Plaintiff visited her workplace and informed her manager she was able to return to work with some restrictions. On July 7, 2021, Plaintiff discovered she had been removed from the schedule and was told by a corporate representative that she had been terminated due to her medical leave and was not eligible to return to work. Plaintiff alleges she reapplied for her position, and two other open positions, but Defendants did not rehire her.

On August 10, 2023, Defendants Macy’s, Inc. and Macy’s Retail Holdings, LLC filed an Answer to the Complaint.

On September 19, 2023, Defendants Macy’s, Inc. and Macy’s Retail Holdings, LLC (Moving Defendants) timely filed the instant motion to compel arbitration. On October 20, 2023, Plaintiff timely filed an opposition. On October 26, 2023, Moving Defendants timely filed a reply.

Although the court is unaware of any legal authority which requires a court to rule on evidentiary objections on a motion, except as to a motion for summary motion/adjudication, the Court nonetheless, overrules the objections. [Cal. Code Civ. Proc. (CCP) § 437c(q)] or a special motion to strike [CCP § 425.16 (b)(2); see also, Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.]

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 Defendants met their initial burden because they attached a copy of the Solutions InSTORE Plan Document (the Agreement) with Plaintiff’s electronic signature acknowledging receipt of the Agreement. (Declaration of Cynthia Ripak (Ripak Decl.) ¶7, 8, Exhibit A; Declaration of Barry Sherrick (Sherrick Decl.) ¶ 13, Exhibit G.) Both California and Federal law provides that electronic signatures on arbitration agreements are valid. The California Uniform Electronic Transactions Act (“UETA”) indicates that an electronic signature has the same legal effect as handwritten signature. Thus, Moving Defendants satisfied their initial burden to compel arbitration.

“If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 (Gamboa).) Plaintiff argues that Moving Defendants have failed to establish a valid agreement and contests the validity of the electronic signature. Specifically, Plaintiff contends that she does not recall receiving or signing the agreement.

Once Plaintiff challenges the validity of the signature, “defendants were then required to establish by a preponderance of the evidence that the signature was authentic.” (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060 (Espejo).) Espejo dealt with an electronic signature. In Espejo, the supplemental declaration of the systems consultant provided the necessary information to establish the authenticity of the document, specifically how the unique username and password were only accessible to that specific individual. (Id. at 1062). In Gamboa, in contrast, the Court determined that the declaration provided by the director of human resources was insufficient, because the declarant failed to provide facts demonstrating how she had personal knowledge of what she stated. (Gamboa, supra, 72 Cal.App.5th at 169).

Here, unlike Gamboa, Moving Defendants provided declarations from Ms. Ripak, Senior Manager of the Office of Solutions InSTORE for Macy’s, Inc. and its divisions, and Mr. Sherrick, Manager, Software Engineering for Macy’s Systems and Technology, Inc., who are personally familiar and have oversight over the preparation and retention of business records pertaining to agreements between Moving Defendants and their employees, including agreements to arbitrate, along with overseeing the preparation and/or or retention of personnel files. Just like in Espejo, where the defendant provided a declaration that discussed the “steps an applicant would have to take to place his or her name on the signature line of the employment agreement,” (Espejo, supra, 246 Cal.App.4th at 1062), Ripak and Sherrick attested to the authenticity of the password protected electronic signature. In sum, Moving Defendants provided credible evidence that Plaintiff was the only person able to access her login credentials to review and acknowledge receipt of the Agreement. (Sherrick Decl., ¶ 4, 5, 9.) Further, Moving Defendants produced business records that attest that Plaintiff’s employment file shows that on October 6, 2015 and June 18, 2017, Plaintiff acknowledged receipt of the Agreement which clearly notified Plaintiff that Plaintiff had 30 days from her hire date, to opt out of the agreement by returning an enclosed opt-out form via U.S. Mail.[1] (Sherrick Decl., Exhibit G.) The employment records indicate that Plaintiff had not opted out within 30 days of either date of hire. (Ripak Decl., ¶¶ 29-30.) Thus, the evidence indicates that Plaintiff effectively accepted the Agreement on November 7, 2015 and again on July 19, 2017. (Ibid.) Lastly, the court is not persuaded by Plaintiff’s lack of authentication argument. While Plaintiff herself does not recall electronically signing any arbitration agreement, she does not deny signing the Agreement.[2]

Thus, notwithstanding Plaintiff’s claim denying remembering signing the Agreement, the court finds that Moving Defendants have met their burden by a preponderance of the evidence establishing the existence of a valid agreement between the parties.

Therefore, the Defendant has established that the Arbitration Agreement exists.

Moving Defendants contend the Agreement covers the subject dispute because Plaintiff filed an employment action that is not otherwise excluded by the Agreement. Plaintiff did not directly oppose this argument.

Here, the Agreement covers the instant dispute. First, the Agreement states it covers “disputes regarding your employment” subject to certain exclusions not applicable here. (Ripak Decl., Exhibit A.) Plaintiff’s claim against Moving Defendants concerns her employment with them and is not otherwise carved out.

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)).

In Armendariz, the California Supreme Court stated that when determining whether an arbitration agreement was unconscionable, there is both a procedural and a substantive element. (Armendariz v. Foundation Health Psychcare Service, Inc. (2000) 24 Cal.4th 82, 114 (Armendariz)).

Plaintiff argues significant oppression and surprise because the Agreement is a contract of adhesion and Moving Defendants failed to attach the AAA rules.[3] Moving Defendants reply that Plaintiff had 30 days to take the Agreement to an attorney, or anywhere else she chose, ask any questions she wanted, investigate any provisions she did not understand, and proceed with her employment whether she opted-out or not.[4] Moving Defendants also contend that the Agreement is not hidden and that the AAA rules are gap-fillers to the Agreement’s primary rules.

Courts determine whether an agreement is procedurally unconscionable by looking at surprise and oppression. Oppression is an “inequality of bargaining power, when one party has no real power to negotiate or a meaningful choice. Surprise occurs when the allegedly unconscionable provision is hidden.” (Carmona v. Lincoln Millennium Car Wash, Inc.¿(2014) 226 Cal.App.4th 74, 84 (Carmona).) Examples of contracts that are procedurally unconscionable are contracts of adhesion, which is a “standardized contract, 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.” (Armendariz, supra, at p. 113). “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. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126-27 (OTO).)

Here, while this may have been a contract of adhesion, as most employment contracts are, this alone does not mean the whole agreement is procedurally unconscionable. “When arbitration is a condition of employment, there is inherently economic pressure on the employee to accept arbitration. This alone is a fairly low level of procedural unconscionability.” (Cisneros Alvarez v. Altamed Health Services Corporation (2021) 60 Cal.App.5th 572, 591). Plaintiff has not provided evidence that she was rushed or under duress to complete the Agreement. Additionally, Plaintiff’s contention that the Agreement was voluminous with hidden terms is not well taken. (OTO LLC v. Kho (2019) 8 Cal.5th 111, 127-28 [identifying a “visually impenetrable” agreement that “challenge[d] the limits of legibility.”]) Specifically, the Agreement breaks down Moving Defendants’ entire internal dispute resolution process, including arbitration, in its 4-step program which is thorough, incorporates diagrams, uses plain language, and also a chart highlighting the distinctions between arbitration and a traditional litigation. (Ripak Decl., Exhibit A.)

The court is also not persuaded by Plaintiff’s argument that failure to attach the AAA Employment Arbitration rules renders the Agreement severely procedurally unconscionable.[5] (Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 690 (Lane) [agreeing that “failure to attach the arbitration rules could be a factor in support of a finding of procedural unconscionability, but disagree[d] that failure, by itself, is sufficient to sustain a finding of procedural unconscionability.”]) Notably, the only section the court has seen in the Agreement that references the applicability of the AAA Employment Arbitration Rules and Mediation Procedures is under Article 2 of the Agreement and states that in the event of a conflict between the Agreement and the AAA Rules, the Agreement governs. (Ripak Decl., Exhibit A.) Therefore, unlike Plaintiff’s contention, she does not need to locate and analyze the AAA Rules in order to understand her rights and expectations under the Agreement. They are spelled out for her.

Plaintiff argues the Agreement is substantively unconscionable because “repeat player” bias renders the AAA non-neutral and the Agreement does not provide for enough discovery. Moving Defendants reply that the “repeat player” argument is preempted by the Federal Arbitration Act and the Agreement provides for more than minimal discovery. The parties do not dispute the remaining Armendariz factors.

“Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided.” (Carmona, supra, at p. 85). There are five minimum substantive requirements to an enforceable arbitration agreement: (1) neutral arbitrators, (2) more than minimal discovery, (3) written award sufficient for judicial review, (4) all types of relief otherwise available in court, and (5) no unreasonable costs or fees as a condition of access. (Armendariz, supra, at p.102.) When there is little procedural unconscionability, a party opposing arbitration must show substantial substantive unconscionability. (Id. at 114.)

Here, the court agrees with Moving Defendants that the Agreement meets the Armendariz factors. First, the Agreement does provide for a neutral arbitrator because it states that the arbitrator is selected by each party. (Ripak Decl., Exhibit A.) Plaintiff cites no authority supporting her contention that the arbitrator would not be neutral. As to discovery, the court does not agree with Plaintiff that the Agreement prohibitively curtails discovery. First, the Agreement provides for “initial disclosures” that require each party to “provide to the other party copies of all documents . . . in its possession, custody or control and upon which the disclosing party will rely in support of the disclosing parties claims or defenses.” (Ripak Decl., Exhibit A, Article 10(a).) Additionally, Plaintiff may request a copy of her personnel file. (Ibid.) As for other discovery, the parties may propound 1 set of 20 interrogatories, one of which may be a request for documents the responding party used to prepare the interrogatory responses. (Id. at Article 10(b).) Finally, the Agreement provides for three depositions. (Ibid.) In conjunction with the initial disclosures, the court does not see why either party could not tailor their additional interrogatory requests to obtain the information they need. As to additional discovery, unlike the authority Plaintiff cites, the Agreement provides that upon “a showing of appropriate justification” the arbitrator may allow further discovery. (Ibid.) This standard is not prohibitive, as it was in Baxter, where the agreement limited discovery to 10 interrogatories (each subpart counting as an interrogatory), two depositions capped at 8 hours, and requiring “good and sufficient cause” for the arbitrator to allow additional discovery. (Baxter v. Genworth North America Corp. (2017) 16Cal.App.5th 713, 727 (Baxter).)[6] Accordingly, the Agreement provides for more than minimal discovery.

Therefore, the Agreement is not substantively unconscionable such that compelling arbitration is unwarranted.

[1] Plaintiff argues that there is no evidence Plaintiff received the opt-out agreement. Not so. Moving Defendants provided evidence of the customary practice for new hires to receive the Agreement and acknowledgement form. (Ripak Decl. ¶¶ 16-26; Sherrick Decl. ¶ 3, 4, 5.)

[2] Plaintiff’s argument that Moving Defendants have access to her personal information required to electronically sign the acknowledgement form is unavailing. In particular, the court is persuaded by Exhibit H and Exhibit I to Mr. Sherrick’s declaration that shows a multitude of other employment forms, which Plaintiff does not dispute completing, that are time-stamped within an hour of the Agreement signatures on October 6, 2015 and June 18, 2017.

[3] The court notes Plaintiff’s argument that Moving Defendants did not explain what arbitration was but disagrees with it. Moving Defendants provided evidence that Plaintiff, as part of her training, accessed and viewed a video that did explain arbitration. (Sherrick Decl., ¶ 17.) Accordingly, the court is also not persuaded by Plaintiff’s dependent arguments that without such explanation she had no real chance to seek attorney advice.

[4] Moving Defendants also challenge Plaintiff’s assertion that requiring mailing the opt-out form to Ohio is unconscionable. Notably, Moving Defendants contend that mailing the opt-out form protects the employee from the employee’s supervisor and others in their workplace from learning they decided to opt-out.

[5] First, Plaintiff relies on one case that, as far as the court can tell, is no longer good law. (Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387.) Second, Plaintiff relies on a case where the failure to attach the AAA Rules directly impacted the employee’s ability to know their rights in terms of scope of discovery. (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702 (Fitz).) Here, the Agreement sets out, in detail, the Solutions InSTORE Early Dispute Resolution Rules and Procedures that govern any arbitration. (Ripak Decl., Exhibit A.) Finally, the Agreement does not incorporate the AAA Rules, but confirms that the Agreement governs in the event of a conflict.

[6] This is also not an “impossibility” standard as the Court found in Fitz, supra, 118 Cal.App.4th at 716.