Judge Upinder S. Kalra, Case Number: 24STCV10778, Date: 2024-10-02 Tentative Ruling

On April 30, 2024, Plaintiff Donna DiFronzo (Plaintiff) filed a Complaint against Defendant Grant Shenon, APLC (Defendant) with seven causes of action for: (1) Discrimination; (2) Associational Discrimination; (3) Failure to Prevent Discrimination and Harassment; (4) Violation of the California Family Rights Act; (5) California Family Rights Act Retaliation; (6) Wrongful Adverse Actions in Violation of Public Policy; and (7) Intentional Infliction of Emotional Distress.

According to the Complaint, Plaintiff worked for Defendant (or Defendant’s predecessor entities) since 1988. Plaintiff alleges that she took a leave of absence pursuant to CFRA to care for her father and Defendant did not reinstate her to the position she had before taking leave and that it otherwise retaliated against her. Plaintiff alleges that her health deteriorated as a result which required taking another leave of absence to care for her own health.

On June 21, 2024, Defendant filed the instant motion to compel arbitration. On September 18, 2024, Plaintiff filed an opposition. Defendant filed a reply on September 24, 2024.

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.)¿¿

However, when an arbitration agreement states that the Federal Arbitration Act (FAA) governs enforcement, the FAA governs a motion to compel arbitration. (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345-346 (Victrola 89).) “A written provision … to settle by arbitration a controversy thereafter arising … or … to submit to arbitration an existing controversy … shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” [9 U.S.C. § 2 (emphasis added)] A party to an arbitration agreement may seek a court order compelling the parties to arbitrate a dispute covered by the agreement. (9 U.S.C. § 4.)

Defendant seeks to enforce the October 29, 2021 Arbitration Agreement (Agreement).[1] Defendant contends that Plaintiff agreed to arbitrate her claims because she continued to work for Defendant. Plaintiff argues Defendant did not meet its burden of proving an arbitration agreement exists because it relies upon agreements which were superseded or unsigned.

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, Defendant met its initial burden. First, they attached the various arbitration agreements at play: the 1994 Agreement, the 2002 Handbook, the 2006 Handbook, and the 2021 Handbook. (Barr Decl., Exhibits 1, 2, 3, 4, 5, 6.) Defendant also notes that Plaintiff, as office administrator, knew that the firm had an arbitration agreement and had executed acknowledgement of it – somewhere. (Barr Decl. ¶¶ 7, 9, 11.)

“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).) The evidence must be sufficient to create a factual dispute to shift the burden back to the arbitration proponent who retains the ultimate burden of proving, by a preponderance of the evidence, the authenticity of the signature. (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere).)

Here, there is no signature in dispute. Rather, Plaintiff disputes that the 2021 Handbook is the operative agreement at all. Notably, Plaintiff produced evidence of a 2023 Handbook which omitted the Arbitration Agreement found in the prior handbooks. (DiFronzo Decl. ¶¶ 16-17, Exhibits A, B.) Defendant’s contention that this omission nevertheless incorporates the prior arbitration agreements is unpersuasive.[2] First, it ignores the clause present in each handbook presented to the court that “the Firm’s policies and procedures may be changed at the sole discretion of the Shareholders.” (DiFronzo Decl., Exhibit A; Barr Decl., Exhibits 2, 3, 5, 6.) It appears clear to the court that such “policies and procedures” included arbitration as it is conspicuously missing from the 2023 Handbook. This is particularly relevant since the 1994 Handbook has the signed acknowledgement of an arbitration policy as well as the separate arbitration agreement and there is a separate agreement signed in 2003. (Barr Decl., Exhibits 1, 2, 4.) Second, it is nonsensical. Based on this logic, Defendant’s employees would need to compare every handbook issued to employees for conflicting clauses and omissions. The court is thus persuaded that the 2023 Handbook controls and does not have an arbitration agreement.

[1] Defendant then seeks to enforce the 2003 Mandatory Arbitration Agreement on reply. They also analyze the 2002 Handbook to explain the superseding clause in the 2023 Agreement. Then they return to the 2021 Agreement. For the sake of clarity and consistency, the court will limit its discussion to the 2021 and 2023 handbooks.

[2] It is also improper. (Grey v. American Management Services (2012) 204 Cal.App.4th 803, 807 [noting that the terms of a final integrated contract “may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.”]) Here, Plaintiff agreed to “abide by” the 2023 Handbook’s “policies and procedures during [her] employment and understand the consequences if [she does] not.” (DiFronzo Decl., Exhibit A.) Prior handbooks noted there was such a policy – some included the rules in the policy and some noted there would be a separate agreement forthcoming. (Barr Decl., Exhibits 2, 3.)