Judge Upinder S. Kalra, Case Number: 23STCV15929, Date: 2023-12-13 Tentative Ruling

1. Motion to Compel Arbitration is GRANTED as to Defendant CVS Pharmacy, Inc. only.

On July 7, 2023, Plaintiff Mark Huard (Plaintiff) filed a Complaint against Defendants CVS Pharmacy, Inc. and Lew Arlington (Defendants) with eleven causes of action for: (1) Discrimination in Violation of the FEHA; (2) Hostile Work Environment in Violation of the FEHA; (3) Retaliation in Violation of the FEHA; (4) Failure to Provide Reasonable Accommodation in Violation of the FEHA; (5) Failure to Engage in the Interactive Process in Violation of FEHA; (6) Failure to Prevent Discrimination, Harassment, or Retaliation in Violation of FEHA; (7) Negligent Hiring, Supervision, and Retention; (8) Wrongful Termination of Employment in Violation of Public Policy; (9) Retaliation in Violation of Public Policy; (10) Whistleblower Retaliation (Labor Code § 1102.5); and (11) Intentional Infliction of Emotional Distress.

According to the Complaint, Plaintiff worked for Defendant CVS and Defendant Arlington was his supervisor. Plaintiff alleges to have a physical disability and was discriminated against due to this disability and due to his age (he is 57 years old). Plaintiff was terminated on October 7, 2021.

On September 20, 2023, Defendant CVS Pharmacy (Moving Defendant) filed the instant motion. On November 30, 2023, Plaintiff filed an opposition. On December 6, 2023, Moving Defendant filed a reply.

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.)¿

Plaintiff seeks an opportunity to cross-examine Moving Defendant’s declarants so that court can weigh their credibility. Plaintiff intends to call these witnesses to show that he was forced to complete training modules under pressure from his managers, including the module with the arbitration policy.

The court declines to exercise its discretion to allow an evidentiary hearing. The court is well aware of the rules of evidence, and to how much weight, if any, should be given to any of the proposed evidence.[1]

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 attached a copy of the Arbitration of Workplace Legal Disputes and the corresponding Training that introduced the policy to employees (the Agreement) with supporting declaration of Robert G. Bailey, the Director for Talent Management at CVS Pharmacy, Inc. and Declaration of Lisa Williams, a Lead Investigator in CVS’s Colleague Relations department, a division of CVS Human Resources (Bailey Decl. ¶ 5, Exhibit 1; Williams Decl. ¶ 11, Exhibit 1 (training).) Plaintiff completed the training covering the Agreement on October 9, 2014. (Williams Decl. ¶12, Exhibit 2.) Completing the training required signing an Acknowledgement. (Williams Decl. ¶¶ 16, 17.) Plaintiff did not opt-out within the specified time period. (Williams Decl. ¶ 18; Declaration of Lorne Dunkerton ¶ 5.) California and Federal law provide 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. Plaintiff does not challenge his signature’s authenticity.[2]

Moving Defendant contends the Agreement covers Plaintiff’s claims. Plaintiff did not specifically oppose this contention.

Here, the Agreement covers the subject dispute. The Agreement applies to “any dispute between an Employee and CVS Health that is covered by this Policy” including “any and all legal claims, disputes or controversies . . . arising out of or related to the Employee’s employment with CVS Health or the termination of the Employee’s employment.” (Bailey Decl., Exhibit 1, page 1 “Claims Covered by This Policy.”) Such claims include “disputes regarding . . . leaves of absence, harassment, discrimination, retaliation and termination arising under the Civil Rights Act of 1964, Americans with Disabilities Act, Age Discrimination in Employment Act, . . . and other federal, state and local statutes, regulations and other legal authorities relating to employment.” (Ibid.) Plaintiff’s Complaint concerns various FEHA and other employment violations that fall within the covered claims provision.

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 contends the Agreement is procedurally unconscionable because it lacks consideration, is mandatory and non-negotiable.[3] Plaintiff also contends that he did not knowingly waive his right to pursue claims in court because he was pressured to click through the agreement without reading it by his manager.[4] Moving Defendant argues that the Agreement’s mutuality is sufficient for consideration, it is not a contract of adhesion because he was permitted to opt-out, and failure to read is no defense.

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).

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). Here, the Agreement was not a surprise. Moving Defendant clearly marked the Agreement as a separate document and provided training to Plaintiff, and other employees, explaining what the Agreement meant. (Bailey Decl., Exhibits 1-3; Williams Decl. ¶¶ 11, 14, 15.) The Agreement also explains the procedures for the process if there is a dispute between the parties. While the Agreement does not provide for opt-out procedures, the training that Moving Defendant provided to Plaintiff, and other employees, does explain that Plaintiff had the opportunity to opt-out by sending a letter to CVS Health, P.O. Box 969, Woonsocket, RI 02895 within 30 days after first receiving the Agreement. (Dunkerton Decl. ¶ 4; Bailey Decl. Exhibit 2.) Plaintiff has not otherwise provided evidence of surprise or oppression.

Moving Defendant contends that the TCA complies with the Armendariz factors. Plaintiff does not oppose this contention.

“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, Agreement meets the Armendariz factors. First, the Agreement provides for a neutral arbitrator because it states that “[t]he parties will select the arbitrator by mutual agreement.” (Bailey Decl., Exhibit 1, pg. 3.) Second, the Agreement provides for more than minimal discovery because it states that the parties will have the right to “conduct discovery.” (Ibid.) Third, the Agreement impliedly provides for a written award because it states “Judgment may be entered on the arbitrator’s decision and enforced in any court having jurisdiction .” (Ibid.) Fourth, the Agreement provides for all types of relief available in court because it states “The arbitrator will follow the substantive law applicable to the case and may award only those remedies that would have been available had the matter been heard in court” (Ibid.) Fifth, the Agreement provides that Moving Defendant will pay all costs and expenses except for claim-initiation fee if the Employee initiates arbitration (but only so long as the initiation fee does not exceed what a court would charge). (Ibid.)

1.Motion to Compel Arbitration is GRANTED as to Defendant CVS Pharmacy, Inc. only.

2.The matter is STAYED pending arbitration. OSC re: status of arbitration June 11, 2025 at 8:30 a.m.

[1]Plaintiff’s reliance on Hotels Nevada v. L.A. pacific Center (2006)144 Cal.App.4th 754. 758, is misplaced. In that matter, it was error to accept Plaintiff’s pleadings as evidence to deny Defendant’s motion for arbitration.

[2] While failure to recall is sufficient to challenge an electronic signature’s authenticity (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165; Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.), Moving Defendant provided credible evidence that Plaintiff was the only person able to access his login credentials to complete the Agreement training and did so. (Williams Decl. ¶¶ 5, 6, 10, 13, 17, Exhibit 2.)

[3] The court declines to develop Plaintiff’s lack of consideration argument. (See, e.g., Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 398 [noting mutuality of obligation to arbitrate enforceable.]) Here, the Agreement binds both Plaintiff and Moving Defendant to arbitrate their disputes. (Bailey Decl. Exhibit 1.)

[4] The court is not persuaded by this argument because of Plaintiff’s contradictory declaration. Specifically, Plaintiff claims he did not recall taking the training for the Agreement or agreeing to arbitrate with Moving Defendant. (Huard Decl. ¶ 2.) Then Plaintiff claims he “was pressured into clicking through to the end of the acknowledgment of the arbitration module without even reading the policy.” (Huard Decl. ¶ 4.) This alone is suspect. Additionally, Plaintiff does not claim that his manager stood over him to ensure he would click through the training as quickly as possible, rather that “managers would pressure us to take training modules as quickly as possible before they became overdue.” (Huard Decl. ¶ 2.) (emphasis added.) This indicates concern with employees’ timely completion of training for all issues, not just the Agreement, and does not indicate Plaintiff completed the training with his manager looming over his shoulder. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126-27.)