Judge: Walter P. Schwarm, Case: 30-2021-01238426, Date: 2022-12-13 Tentative Ruling
Defendants’ (Loan Depot, LLC and Allen Blau) Motion to Dismiss and Compel Arbitration (Motion), filed on 7-1-22 under ROA No. 43, is GRANTED in part and DENIED in part as set forth below.
The court OVERRULES all of the objections in Defendants’ Objection to Declaration of Danielle Buard filed on 12-6-22 under ROA No. 57.
Code of Civil Procedure section 1281.2, states, in part, “On 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 to arbitrate the controversy exists, unless it determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner; or [¶] (b) Grounds exist for the rescission of the agreement.”
Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154, 165 (Western Pizza), states, “Under California law, as under the FAA, an arbitration agreement may be invalidated upon the same grounds as any other contract. [Citation.] In other words, although arbitration agreements ordinarily are enforced according to their terms, their enforceability is limited by the same general contract law principles governing the enforceability of any contract. [Citation.] [¶] Under California law, the question whether an arbitration agreement is unenforceable, in whole or in part, based on general contract law principles is a question for the court to decide, rather than an arbitrator. [Citations.] This includes the determination whether an arbitration agreement is unconscionable or contrary to public policy. [Citation.] Discover Bank concluded that the FAA, and particularly the opinion by the United States Supreme Court in Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444, 123 S.Ct. 2402, 123 S.Ct. 2402, did not conflict with California law on this point and that the California rule therefore governs. [¶] Some opinions by the Courts of Appeal have suggested, without holding, that the enforceability of an arbitration agreement is a question for the arbitrator to decide if the arbitration agreement ‘ “clearly and unmistakably” ’ so provides. [Citations.] We need not decide whether such a clear and unmistakable provision would be enforceable because the arbitration agreement here does not clearly state that the arbitrator will decide whether the arbitration agreement is enforceable. Rather, the provision that the arbitrator will resolve ‘any disputes over the interpretation or application of this Arbitration Agreement’ does not appear to encompass disputes concerning the enforceability of the arbitration agreement based on unconscionability, public policy, or other grounds.” (Footnote 3 omitted.)
Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1219 (Toal), provides, “In Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 58 Cal.Rptr.2d 875, 926 P.2d 1061 (Rosenthal ), our Supreme Court set forth the procedure to be followed when a petitioner seeks to compel arbitration: ‘[W]hen a petition to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the controversy, the court itself must determine whether the agreement exists and, if any defense to its enforcement is raised, whether it is enforceable. Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence. If the party opposing the petition raises a defense to enforcement—either fraud in the execution voiding the agreement, or a statutory defense of waiver or revocation [citation]—that party bears the burden of producing evidence of, and proving by a preponderance of the evidence, any fact necessary to the defense.’ [Citation.]” (Footnote. 8 omitted.) Ruiz v. Moss Bros. Auto Group, Inc. (Ruiz) (2014) 232 Cal.App.4th 836, 846 (Ruiz), states, “Properly understood, Condee holds that a petitioner is not required to authenticate an opposing party’s signature on an arbitration agreement as a preliminary matter or in the event the authenticity of the signature is not challenged. [Citations.]” (Italics in Ruiz.)
Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 (Gamboa), explains, “First, the moving party bears the burden of producing ‘prima facie evidence of a written agreement to arbitrate the controversy.’ [Citation.] The moving party ‘can meet its initial burden by attaching to the [motion or] petition a copy of the arbitration agreement purporting to bear the [opposing party's] signature.’ [Citation.] Alternatively, the moving party can meet its burden by setting forth the agreement's provisions in the motion. [Citations.] For this step, ‘it is not necessary to follow the normal procedures of document authentication.’ [Citation.] If the moving party meets its initial prima facie burden and the opposing party does not dispute the existence of the arbitration agreement, then nothing more is required for the moving party to meet its burden of persuasion. [¶] 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. [Citation.] The opposing party can do this in several ways. For example, the opposing party may testify under oath or declare under penalty of perjury that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement. [Citations.] [¶] If the opposing party meets its burden of producing evidence, then in the third step, the moving party must establish with admissible evidence a valid arbitration agreement between the parties. The burden of proving the agreement by a preponderance of the evidence remains with the moving party. [Citation.]”
Civil Code section 1633.9 provides, “(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. [¶] (b) The effect of an electronic record or electronic signature attributed to a person under subdivision (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law.”
Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060 (Espejo), provides, “In context, the brief discussion of Condee by the court in Toal regarding a petitioner's ultimate burden has no bearing on the question before us—whether defendants may meet their initial burden to show an agreement to arbitrate by attaching a copy of the arbitration agreement purportedly bearing the opposing party's signature. We conclude they may, in compliance with the requirements of section 1281.2 and California Rules of Court, rule 3.1330. [¶] Accordingly, we conclude that defendants here met their initial burden by attaching to their petition a copy of the purported arbitration agreement bearing Espejo's electronic signature. Once Espejo challenged the validity of that signature in his opposition, defendants were then required to establish by a preponderance of the evidence that the signature was authentic. [¶] Because defendants were not required to establish the authenticity of Espejo's signature on the DRP until challenged by Espejo in his opposition, they were not required to file the supplemental Tellez declaration pursuant to the deadline set by section 1005, subdivision (b) for a party's moving papers. Rather than wait until their reply, defendants filed the supplemental declaration in advance of Espejo's opposition. The supplemental declaration was therefore timely. The trial court abused its discretion in finding it was untimely under section 1005 and striking it on that basis.” (Italics in Espejo.)
Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538 (Jay), explains, “The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers. This principle is most prominent in the context of summary judgment motions, which is not surprising, given that it is a common evidentiary motion. ‘[T]he inclusion of additional evidentiary matter with the reply should only be allowed in the exceptional case . . .’ and if permitted, the other party should be given the opportunity to respond. [Citations.] . . . [¶] This rule is based on the same solid logic applied in the appellate courts, specifically, that ‘[p]oints raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument.’ [Citations.] [¶] To the extent defendants argue they had the right to file any reply declarations at all, they are not wrong. Such declarations, however, should not have addressed the substantive issues in the first instance but only filled gaps in the evidence created by the limited partners' opposition. Defendants' decision to wait until the reply briefs to bring forth any evidence at all, when the limited partners would have no opportunity to respond, was simply unfair. Thus, while the trial court had discretion to admit the reply declarations, it was not an abuse of discretion to decline to do so.”
Here, Defendants’ Reply to Plaintiff’s Opposition to Motion to Dismiss and Compel Arbitration (Reply), filed on 12-6-22 under ROA No. 55, submitted the additional declaration of Dysiree Villalvazo. The evidence submitted with the Reply responds to Plaintiff’s (Danielle Buard) Opposition to Defendant’s Motion to Dismiss and Compel Arbitration and Stay Judicial Proceedings (Opposition), filed on 11-30-22 under ROA No. 47, that “. . . there was no mutual assent because Plaintiff does not recall signin an arbitration agreement and Plaintiff does not know what an arbitration agreement is.” (Opposition; 3:23-24.)
Defendants move to compel arbitration based on an Arbitration Agreement between Plaintiff and loanDepot dated December 5, 2019 (Arbitration Agreement). (Kyleigh Schumacher Decl., ¶ 7 and Exhibit B.)
Existence of a Valid Arbitration Agreement.
The Opposition states, “Defendants did not meet their burden to show that Plaintiff signed the document.” (Opposition; 5:1.) The court finds that Defendants carried their initial burden of demonstrating a valid arbitration agreement between the parties based on the declaration of Kyleigh Schumacher. (Kyleigh Schumacher Decl., ¶¶ 5, 6, 7, 13, 14, 15, and Exhibits A and B.) Plaintiff’s declaration challenged the validity of Plaintiff’s signature by stating, “I do not recall receiving or signing an arbitration agreement. . . . [¶] I searched my DocuSign account for the DocuSign Envelope ID depicted at the top of each page of the arbitration agreement . . . I did not find the arbitration agreement. . . . [¶] My DocuSign signature code verifying my signature is not on the arbitration agreement. The code is C828FB8956F44DD.” (Buard Decl., ¶¶ 2, 7, and 9.) Since Plaintiff challenged the authenticity of Plaintiff’s signature on the Arbitration Agreement, the burden shifts to Defendants to that the Arbitration Agreement is authentic. Based on Espejo and Jay, the court will consider the declaration of declaration of Dysiree Villalvazo submitted with the Reply. Dysiree Villalvazo with their Reply.
Dysiree Villalvazo is the “Manager of HR – Technology for loanDepot.” (Villalvazo Decl., ¶ 1.) The declaration described Dysiree Villalvazo’s familiarity with the procedures Defendant—Loan Depot, LLC uses to disseminate onboarding documents to new hires. The declaration states, “I have personal knowledge of how onboarding documents such as the arbitration agreement are disseminated to new hires from WorkDay. This is because my team and I created the actual steps on WorkDay that must be followed for the onboarding process, and my and I created the routing for the onboarding documents, i.e., who those onboarding documents should be sent to. Specifically, WorkDay has certain steps that the talent coordinator must follow, including creating a user profile that includes the new hire’s personal email address obtained during the application phase, and other information such as the applicant’s name, address, phone number, social security number, and job position applied for.” (Villalvazo Decl., ¶ 7.) Dysiree Villalvazo’s declaration also describes the procedures new hires use when electronically signing the onboarding documents. The declaration states, “I also have personal knowledge of how a new-hire accesses, reviews, and electronically signs the onboarding documents. This is because my team and I created and built the step on WorkDay which allows the new hires to access, review, and electronically sign the onboarding documents. Specifically, once the new hire clicks on the link to WorkDay which was sent to his or her personal email address, the new hire is immediately prompted to log in to WorkDay using the user ID and temporary password which was also sent to his or her personal email address. After logging in, the new hire is immediately prompted to change the password for the WorkDay account, and is prompted to set up three security questions and answers. There is no way for the new hire to access any onboarding documents on WorkDay prior to creating a new password. Only someone with access to the new hire’s personal email address and personal password created for that personal email address could access (a) the link to WorkDay where they are prompted to create a new password, and where they can access the onboarding documents, including the arbitration agreement; and (b) the email containing the user ID and temporary password to be used when logging into WorkDay for the first time, before they are prompted to create a new password, and before accessing the onboarding documents. I personally confirmed these security and safety protocols by going through the onboarding process as a “test” new hire at loanDepot, as set forth below.” (Villalvazo Decl., ¶ 8; See also, Villalvazo Decl., at ¶ 9.)
The declaration concludes, “By accessing and reviewing the technical end of WorkDay with respect to Plaintiff’s onboarding documents and Plaintiff’s work file on WorkDay, I confirmed that first time Plaintiff logged in to WorkDay was on December 5, 2019, at 9:20:26 AM from browser type: Windows Chrome, which I confirmed is outside of loanDepot’s network. See Exhibit 1, which is a true and correct copy of a screen shot of Plaintiff’s sign-on history in WorkDay. Because only someone with access to Plaintiff’s personal email address and personal password for that personal email address could have accessed the link to WorkDay and the user ID and temporary password to log in to WorkDay for the first time, this confirms that it could only have been Plaintiff that logged in to WorkDay for the first time on December 5, 2019. Indeed, that is the same date that Plaintiff electronically signed the Arbitration Agreement on WorkDay. The time that Plaintiff acknowledged her signature on the Arbitration Agreement within the 30 minutes her sign-on history shows she was logged on that day. All of these facts further confirm that it was Plaintiff, and only Plaintiff, who signed the Arbitration Agreement.” (Villalvazo Decl., ¶ 14.)
The court finds that the declaration from Dysiree Villalvazo is sufficient to authenticate that Plaintiff signed the Arbitration Agreement attached to the declaration of Kyleigh Schumacher. (Kyleigh Schumacher Decl., ¶ 7 and Exhibit B.) The declaration of Dysiree Villalvazo described the security and safety protocols that Defendant—Loan Depot, LLC uses to ensure that only Plaintiff could have accessed the onboarding documents that applied to Plaintiff. Therefore, based on the preponderance of the evidence, the court finds that Defendants have demonstrated that Plaintiffs’ signature on the Arbitration Agreement is Authentic. Accordingly, Defendants have sufficiently shown that Plaintiff signed the Arbitration Agreement.
The Arbitration Agreement provides in pertinent part, “Arbitration. This Agreement requires the Parties to arbitrate all Claims, as defined in Section 3 of this Agreement, the Parties may have against each other. . . .” (Kyleigh Schumacher Decl., ¶ 8, and Exhibit B; (¶ 1 of the Arbitration Agreement.); Underscore in Arbitration Agreement.) As to claims covered, the Arbitration Agreement provides, “Claims. The claims covered by this Agreement, and subject to arbitration, include but are not limited to all past, present, future claims, including any currently pending litigation and/or class/collective/representative actions against the Company, for claims of: wrongful termination; discrimination; harassment; retaliation; breach of contract/covenant; trade secrets; emotional distress; fraud; misrepresentation; defamation; tort claims; wage and hour claims including but not limited to claims of: minimum wage, off the clock work, overtime, bonuses, meal/rest periods, wage statements, reimbursement, penalties, benefits; violation of any federal, state or other government constitution, statute, ordinance or regulation, including but not limited to Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans With Disabilities Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, the Consolidated Omnibus Budget Reconciliation Act, the Family and Medical Leave Act, the California Fair Employment and Housing Act, the California Family Rights Act, the California Labor Code, the California Civil Code, the California Business and Professions Code, the California Wage Orders, and/or the California Private Attorneys General Act (to the extent allowed by law) (collectively the ‘Claims’); however, the term ‘Claims’ does not include any claim or claims that cannot be arbitrated under the law. With the exception of claims brought before the California Division of Labor Standards Enforcement, nothing herein, however, shall prevent me from filing and pursuing administrative proceedings before administrative agencies such as the California Department of Fair Employment and Housing, or the United States Equal Employment Opportunity Commission (although if I choose to pursue a claim following the exhaustion of such administrative remedies, that claim would be subject to the provisions of this Agreement). (Kyleigh Schumacher Decl., ¶ 8, and Exhibit B; (¶ 3 of the Arbitration Agreement.); Underscore in Arbitration Agreement.)
Here, Plaintiff’s First Amended Complaint (FAC), 5-5-22 under ROA No. 20, alleges employment-related claims and Defendant—Loan Depot, LLC’s regarding violations of FEHA, the Equal Pay Act, and the Labor Code. Thus, Defendants have sufficiently met their burden of producing prima facie evidence of a written agreement to arbitrate the controversy.
Based on the above, the court finds that Defendants have carried their burden, by a preponderance of the evidence, the existence of a valid arbitration agreement between Defendant—Loan Depot, LLC and Plaintiff.
Unconscionability:
Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 910 (Sanchez), explains, “ ‘ “The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.” [Citation.] But they need not be present in the same degree. “Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” [Citations.] In other words, the 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.’ [Citation.]” (Italics in Sanchez.) Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 243 (Carbajal), provides, “Procedural unconscionability ‘addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.’ [Citation.]” “ ‘The substantive element of unconscionability “pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided.” [Citation.] This includes consideration of the extent to which the disputed term is outside the reasonable expectation of the nondrafting party or is unduly oppressive.’ [Citations.]” (Id., at p. 247.)
Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz), states, “In 1979, the Legislature enacted Civil Code section 1670.5, which codified the principle that a court can refuse to enforce an unconscionable provision in a contract. [Citation.] As section 1670.5, subdivision (a) states: ‘If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.’ Because unconscionability is a reason for refusing to enforce contracts generally, it is also a valid reason for refusing to enforce an arbitration agreement under Code of Civil Procedure section 1281, which, as noted, provides that arbitration agreements are ‘valid, enforceable and irrevocable, save upon such grounds as exist [at law or in equity] for the revocation of any contract.’ The United States Supreme Court, in interpreting the same language found in section 2 of the FAA (19 U.S.C. § 2), recognized that ‘generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements. . . .” [Citation.] (Italics in Armendariz.) “Based on Gilmer, supra, 500 U.S. 20, and on the basic principle of nonwaivability of statutory civil rights in the workplace, the Cole court formulated five minimum requirements for the lawful arbitration of such rights pursuant to a mandatory employment arbitration agreement. Such an arbitration agreement is lawful if it ‘(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators' fees or expenses as a condition of access to the arbitration forum. Thus, an employee who is made to use arbitration as a condition of employment “effectively may vindicate [his or her] statutory cause of action in the arbitral forum.” ’ [Citation.]” (Id., at p. 102.)
Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704 (Serpa), states, “It is well settled that adhesion contracts in the employment context, that is, those contracts offered to employees on a take-it-or-leave-it basis, typically contain some aspects of procedural unconscionability. [Citation.] . . . [¶] Nonetheless, as we have explained, this adhesive aspect of an agreement is not dispositive. [Citation.] When, as here, there is no other indication of oppression or surprise, ‘the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high.’ [Citations.]” (Footnote 4 omitted.)
As to procedural unconscionability, Plaintiff contends, that “. . . the arbitration agreement references several specific federal statutes, but does not reference FEHA.” (Opposition; 7:1-2.) As discussed above, the Arbitration Agreement specifically refers to claims involving the California Fair Employment and Housing Act.
Plaintiff asserts, “. . . the arbitration agreement does not provide for adequate discovery. Further, the arbitration agreement provides for a JAMS arbitrator and the risk is that such an arbitrator would not be neutral. If Defendants contain the same provision in other arbitration agreements, then there is a risk of repeat player bias against Plaintiff and in favor of Defendants.” (Opposition; 7:8-11.) “ ‘ “Numerous cases have held that the failure to provide a copy of the arbitration rules to which the employee would be bound, supported a finding of procedural unconscionability.” ’ [Citations.] As each of these cases explained, the failure to provide a copy of the governing rules ‘contributes to oppression because the employee “is forced to go to another source to find out the full import of what he or she is about to sign and must go to that effort prior to signing.” ’ [Citation.] The level of oppression is increased when, as here, the employer not only fails to provide a copy of the governing rules, but also fails to clearly identify which rules will govern so the employee could locate and review them. [Citations.]” (Carbajal, supra, 245 Cal.App.4th at pp. 244-245; Italics in Carbajal.)
The Arbitration Agreement states that the arbitration “. . . shall be conducted under the JAMS Employment Arbitration Rules & Procedures . . . .” (Kyleigh Schumacher Decl., ¶ 8, and Exhibit B; (¶ 2 of the Arbitration Agreement.).) JAMS Arbitration Rule 17 provides that the parties must produce all relevant, nonprivileged documents. (David Decl., ¶ 3 and Exhibit. A.) In addition, “Each party may take at least one deposition of an opposing Party or an individual under the control of the opposing Party. The Parties shall attempt to agree on the number, time, location, and duration of the deposition. If the parties [do not] agree, these issues shall be determined by the Arbitrator. The necessity of additional depositions shall be determined by the Arbitrator based upon the reasonable need for the requested information the availability of other discovery options and the burdensomeness of the request on the opposing Parties and the witness. . . .” (David Decl., ¶ 3 and Exhibit A (Rule 17.).)
The court finds that there is a moderate level of procedural unconscionability. The Arbitration Agreement was an adhesive contract because the Offer of Employment states in part, “. . . This offer is contingent upon all agreements being acknowledged & agreed upon via the companies HRIS tool, Workday prior to your first day of employment. . . .” (Kyleigh Schumacher Decl., ¶ 6, and Exhibit A; (¶ 7 of the Offer of Employment.) Underscore in Exhibit A.) The adhesive nature of the contract combined with the failure to directly provide Plaintiff with a copy of the rules governing the arbitration support the finding of a moderate level of procedural unconscionability.
As to substantive unconscionability, the Arbitration Agreement is lawful under Armendariz because it contains the following terms: (1) The Arbitration Agreement provides for a neutral Arbitrator (Kyleigh Schumacher Decl., ¶ 7, and Exhibit B; (¶ 1 of the Arbitration Agreement).); (2) The Arbitration provides for more that minimal discovery. (Kyleigh Schumacher Decl., ¶ 7, and Exhibit B; (¶ 2 of the Arbitration Agreement and (David Decl., ¶ 3 and Exhibit A (Rule 17).).) The court notes that the Opposition does not explain why the discovery provision is inadequate.; (3) The Arbitration Agreement provides for a written award. Kyleigh Schumacher Decl., ¶ 7, and Exhibit B; (¶ 5 of the Arbitration Agreement.).); (4) The Arbitration Agreement provides for all of the types of relief that would otherwise be available in court. (Kyleigh Schumacher Decl., ¶ 7, and Exhibit B; (¶ 5 of the Arbitration Agreement.).); and (5) The Arbitration Agreement does not require Plaintiff to pay either unreasonable costs or any arbitrator’s fees or expense as a condition of access to the arbitration. The Arbitration Agreement states, “. . . The Company will pay the arbitrator’s fees and any other administrative fees unique to arbitration.” (Kyleigh Schumacher Decl., ¶ 7, and Exhibit B; (¶ 4 of the Arbitration Agreement.).)
Based on Armendariz, the court finds that Plaintiff’s has not shown any degree of substantive unconscionability. Therefore, the court finds that the Arbitration Agreement is enforceable.
Labor Code section 432.6:
Labor Code section 432.6 provides in part, “(a) A person shall not, as a condition of employment, continued employment, or the receipt of any employment-related benefit, require any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the Government Code) or this code, including the right to file and pursue a civil action or a complaint with, or otherwise notify, any state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity of any alleged violation. . . . [¶] (h) This section applies to contracts for employment entered into, modified, or extended on or after January 1, 2020. . . .”
Plaintiff entered into the Arbitration Agreement on 12-5-19. on December 5, 2019. (Kyleigh Schumacher Decl., ¶ 7, and Exhibit B.) Therefore, the court finds that Labor Code section 432.6 does not apply because Plaintiff entered into the Arbitration Agreement before 1-1-20.
Enforcement by Non-Signatory:
Defendant Allen Blau seeks to compel arbitration even though he was not a signatory to the Arbitration Agreement.
“[T]here are six theories by which a nonsignatory may be bound to arbitrate: ‘(a) incorporation by reference; (b) assumption; (c) agency; (d) veil-piercing or alter ego; (e) estoppel; and (f) third-party beneficiary’ [citations].” (Suh v. Superior Ct. (2010) 181 Cal.App.4th 1504, 1513.) Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614-615 (Thomas), states, “Having alleged all defendants acted as agents of one another, John is bound by the legal consequences of his allegations. [Citation.] And, as the cases cited above hold, a plaintiff's allegations of an agency relationship among defendants is sufficient to allow the alleged agents to invoke the benefit of an arbitration agreement executed by their principal even though the agents are not parties to the agreement. [Citations.] Moreover, it would be unfair to defendants to allow John to invoke agency principles when it is to his advantage to do so, but to disavow those same principles when it is not. [Citations.] We therefore reject John's attempt to limit the legal effect of his agency allegations to the imposition of tort liability on defendants.”
The FAC pleads, “Defendants, and each of them, were at all times mentioned herein the agents, servants, and employees of each other, or otherwise were acting with the full knowledge and consent of each other. . . .” (FAC, ¶ 13.) Therefore, the court finds that Defendant—Allen Blau may compel Plaintiff to arbitrate Plaintiff’s claims under an agency theory.
Based on the above, the court GRANTS Defendants’ (Loan Depot, LLC and Allen Blau) Motion to Dismiss and Compel Arbitration, filed on 7-1-22 under ROA No. 43, to the extent it seeks to compel arbitration. The court DENIES the Motion to the extent it seeks a dismissal. The court stays all proceedings in this action pursuant to Code of Civil Procedure section 1281.4. The court sets and Arbitration Review hearing on 6-16-23 at 10:00 a.m. in Department C32.
Defendants are to give notice.