Guidry v. Vitas Health Care Corporation of California et al

Filing 20

ORDER Granting Defendant's 6 Motion to Compel Arbitration. The Court orders the parties to file a joint status report regarding the arbitration within six (6) months from the date of this of this order, and to file a joint status report every six (6) months thereafter until the completion of arbitration. The Court further orders the parties to file a joint status report within seven (7) days following the completion of arbitration. Signed by Judge Marilyn L. Huff on 5/9/2024. (rlw)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 17 18 KAISHAUNA GUIDRY, M.D., H.M.D.C., an individual, Case No.: 3:24-cv-00176-H-MMP ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION Plaintiff, v. VITAS HEALTHCARE CORPORATION OF CALIFORNIA, a Delaware corporation; and DOES 1 through 25, [Doc. No. 6.] Defendants. 19 On December 21, 2023, Plaintiff Kaishauna Guidry, M.D., H.M.D.C. (“Plaintiff”) 20 filed a complaint in the Superior Court of California, County of San Diego. (Doc. No. 1-2.) 21 On January 25, 2024, Defendant VITAS Healthcare Corporation of California 22 (“Defendant”) removed the case to this Court. (Doc. No. 1.) That same day, Defendant 23 filed an answer to Plaintiff’s complaint. (Doc. No. 2.) On February 29, 2024, Defendant 24 filed a motion to compel arbitration and stay proceedings. 25 March 25, 2024, Plaintiff filed a response in opposition to Defendant’s motion to compel 26 arbitration. (Doc. Nos. 14, 15.) On April 1, 2024, Defendant filed a reply. (Doc. No. 17.) 27 On April 17, 2024, the Court, pursuant to its discretion under Local Rule 7.1(d)(1), 28 submitted the motion on the parties’ papers. (Doc. No. 19.) For the reasons below, the (Doc. No. 6.) On 1 3:24-cv-00176-H-MMP 1 Court grants Defendant’s motion to compel arbitration. 2 BACKGROUND 3 On or about April 18, 2022, Defendant hired Plaintiff as a home care physician. 4 (Doc. No. 6-2, Declaration of Riti Malhotra (“Malhotra Decl.”) ¶ 3.) Defendant is a private 5 healthcare company incorporated in Delaware with its principal place of business in Miami, 6 Florida. (Id. ¶ 2.) Defendant provides hospice and other healthcare services to its clients 7 in fourteen states, including California. (Id.) Defendant also purchases products from 8 out-of-state vendors. (Id.) 9 In January of 2023, Defendant rolled out the Mutual and Voluntary Agreement to 10 Arbitrate Claims (the “Agreement”) to all of its existing employees. (Id. ¶ 3.) Defendant 11 sent the Agreement to all current employees’, including Plaintiff’s, work email accounts 12 via DocuSign. (Id. ¶¶ 3, 5.) On January 20, 2023, Defendant alleges that Plaintiff executed 13 the Agreement via DocuSign. (Id. ¶ 11.) The Agreement states, in relevant part, that the 14 parties “agree to use binding arbitration as the means to resolve all disputes that may arise 15 out of or relate to [Plaintiff’s] application for employment or employment with the 16 Company, including termination of employment.” (Malhotra Decl., Ex. 5 ¶ 1.) The 17 Agreement covers “claims of discrimination, harassment and/or retaliation, whether they 18 be based on the California Fair Employment and Housing Act, Title VII of the Civil Rights 19 Act of 1964, as amended, or any other state or federal law or regulation, equitable law, or 20 otherwise.” (Id. ¶ 4.) The parties also “agree the [Federal Arbitration Act (“FAA”)] applies 21 to this Agreement and that a court of competent jurisdiction will be the sole determiner of 22 whether the FAA applies.” (Id. ¶ 3.) 23 On December 21, 2023, Plaintiff filed a complaint in the Superior Court of 24 California, County of San Diego, alleging claims for: (1) discrimination on basis of color, 25 ethnicity, 26 § 12940; (2) discrimination on basis of gender, violation of California Government Code 27 § 12940; (3) harassment on basis of color, ethnicity, race, and/or gender, violation of 28 California Government Code § 12940; (4) retaliation for complaining of illegal and/or race, violation of California Government Code 2 3:24-cv-00176-H-MMP 1 discrimination and harassment, violation of California Government Code § 12940; 2 (5) failure to prevent discrimination, harassment, and/or retaliation, violation of California 3 Government Code § 12940; (6) failure to pay for all overtime wages, violation of California 4 Labor Code §§ 510, 1194; (7) failure to timely pay wages, violation of California Labor 5 Code § 204; and (8) whistleblower retaliation, violation of California Labor Code § 1102.5. 6 (Doc. No. 1-2, Compl. ¶¶ 15–56.) On January 25, 2024, Defendant removed the case to 7 this Court. (Doc. No. 1.) That same day, Defendant filed an answer to Plaintiff’s 8 complaint. (Doc. No. 2.) By the present motion, Defendant moves to compel this action 9 to arbitration pursuant to the Agreement. (Doc. No. 6.) 10 11 DISCUSSION I. LEGAL STANDARDS 12 A. 13 The Federal Arbitration Act (“FAA”) established a clear preference for enforcing 14 arbitration agreements. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 15 U.S. 1, 24 (1983) (“Section 2 is a congressional declaration of a liberal federal policy 16 favoring arbitration agreements.”); accord Mortensen v. Bresnan Comm., LLC, 722 17 F.3d 1151, 1160 (9th Cir. 2013) (“[T]he FAA’s purpose is to give preference (instead of 18 mere equality) to arbitration provisions.”). Accordingly, the FAA “mandates that district 19 courts shall direct the parties to proceed to arbitration on issues as to which an arbitration 20 agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) 21 (emphasis removed). Thus, courts must compel arbitration where (1) a valid agreement to 22 arbitrate exists, and (2) the agreement to arbitrate encompasses the claims at issue. Chiron 23 Corp. v. Ortho Diagnostic Sys., 207 F.3d 1126, 1130 (9th Cir. 2000). “[W]here the contract 24 contains an arbitration clause, there is a presumption of arbitrability.” AT&T Tech., Inc. 25 v. Commc’ns Workers of Am., 475 U.S. 643, 648 (1986). This presumption is particularly 26 strong where the arbitration clause is broad and “only the most forceful evidence of a 27 purpose to exclude the claim from arbitration can prevail.” 28 Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 585 (1960)). Federal Federal Arbitration Act Id. (quoting United 3 3:24-cv-00176-H-MMP 1 courts apply state contract law to determine whether a valid arbitration agreement exists, 2 and what claims it encompasses. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 3 (1995); Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1121 (9th Cir. 2008). 4 Section 2 of the FAA makes arbitration agreements “valid, irrevocable, and 5 enforceable, save upon such grounds as exist at law or in equity for the revocation of any 6 contract.” 9 U.S.C. § 2. Thus, the FAA “permits agreements to arbitrate to be invalidated 7 by generally applicable contract defenses, such as fraud, duress, or unconscionability, but 8 not by defenses that apply only to arbitration or that derive their meaning from the fact that 9 an agreement to arbitrate is at issue.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 10 339 (2011) (internal citation and quotation marks omitted). “Any doubts about the scope 11 of arbitrable issues, including applicable contract defenses, are to be resolved in favor of 12 arbitration.” Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1259 (9th Cir. 2017) (quoting 13 Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1022 (9th Cir. 2016)). But “the liberal federal 14 policy regarding the scope of arbitrable issues is inapposite when the question is whether 15 a particular party is bound by the arbitration agreement.” Norcia v. Samsung Telecomms. 16 Am., LLC, 845 F.3d 1279, 1291 (9th Cir. 2017) (citations omitted). 17 B. 18 In California, a court may refuse to enforce a contract that was “unconscionable at 19 the time it was made.” Cal. Civ. Code § 1670.5(a). A contract is unconscionable if, at the 20 time of formation, there was “an absence of meaningful choice on the part of one of the 21 parties together with contract terms which are unreasonably favorable to the other party.” 22 Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899, 910 (2015) (quoting 23 Sonic-Calabasas A, Inc. v. Moreno, 57 Cal. 4th 1109, 1133 (2013)). Courts have distilled 24 this into two prongs—procedural and substantive unconscionability. Id. Thus, to be 25 unconscionable, a contract must be both procedurally and substantively unconscionable. 26 Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 114 (2000). California Law Regarding Unconscionability 27 Procedural unconscionability focuses on “oppression or surprise due to unequal 28 bargaining power” while substantive unconscionability focuses on “overly harsh or 4 3:24-cv-00176-H-MMP 1 one-sided results.” Sanchez, 61 Cal. 4th at 910. Both prongs need not be present to the 2 same degree. Id. Specifically, courts apply a sliding scale—“the more substantively 3 oppressive the contract term, the less evidence of procedural unconscionability is 4 required . . . and vice versa.” Id. (quoting Armendariz, 24 Cal. 4th at 114). There is no 5 “one true, authoritative standard for substantive unconscionability.” Id. at 911. Instead, 6 courts “have used various nonexclusive formulations to capture the notion that 7 unconscionability requires a substantial degree of unfairness beyond ‘a simple 8 old-fashioned bad bargain.’” Id. (quoting Sonic-Calabasas, 57 Cal. 4th at 1160). These 9 “various formulations” include “so one-sided as to shock the conscience,” Pinnacle 10 Museum Tower Assn. v. Pinnacle Market Dev., 55 Cal. 4th 223, 246 (2012), “unfairly 11 one-sided,” Little v. Auto Stiegler, Inc., 29 Cal. 4th 1064, 1071 (2003), “overly harsh,” 12 Armendariz, 24 Cal. 4th at 114, and “unduly oppressive,” Graham v. Scissor-Tail, Inc., 28 13 Cal. 3d 807, 820 (1981). This analysis is “highly dependent on context” and the court 14 should consider the general commercial background and the commercial needs of the 15 particular trade or case.” Sanchez, 61 Cal. 4th at 911–12 (quoting Williams v. Walker- 16 Thomas Furniture Co., 350 F.2d 445, 450 (D.C. Cir. 1965)). 17 unconscionability bears the burden of proof. Id. at 911. 18 II. The party asserting ANALYSIS 19 Defendant produced a copy of the Agreement, which contains a broad arbitration 20 clause and Plaintiff’s electronic signature. 1 (Malhotra Decl., Ex. 5.) Plaintiff disputes that 21 22 23 24 25 26 27 28 The FAA governs the Agreement. Pursuant to 9 U.S.C. § 2, an arbitration agreement only needs to evidence a transaction involving commerce for the FAA to apply. Courts broadly construe this to encompass the full reach of Congress’ commerce power. Cit. Bank v. Alfabaco, Inc., 539 U.S. 52, 56 (2003). Indeed, the dispute itself need not implicate interstate commerce for the FAA to apply. Id.; Shepard v. Edward Mackay Enters., 148 Cal. App. 4th 1092, 1101 (2007). Rather, the FAA governs any arbitration agreement affecting commerce in any way, including where a company offering the agreement merely receives goods or resources from out of state. Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 269 (1995); Katzenbach v. McClung, 379 U.S. 294, 304 (1964) (restaurant serving food from out of state was involved in interstate commerce). Here, Defendant 1 5 3:24-cv-00176-H-MMP 1 she signed the Agreement. (Doc. No. 14 at 9.) Plaintiff also argues that the Agreement is 2 unenforceable because it is not signed by Defendant and the conduct between the parties 3 does not support a finding of an agreement to arbitrate claims. (Id. at 9–12.) Plaintiff 4 further challenges Defendant’s motion to compel arbitration on the grounds that the 5 Agreement is unconscionable. (Id. at 12–18.) The Court first addresses the authenticity of 6 Plaintiff’s electronic signature. 7 A. 8 A party moving to compel arbitration meets its initial burden by attaching a copy of 9 a purported agreement to arbitrate along with the nonmoving party’s signature. Espejo v. 10 So. Cal. Permanente Med. Grp., 246 Cal. App. 4th 1047, 1060 (2016). If the nonmoving 11 party challenges the authenticity of her signature, the moving party is then required to 12 establish its authenticity by a preponderance of the evidence. Id. (“Once Espejo challenged 13 the validity of that signature in his opposition, defendants were then required to establish 14 by a preponderance of the evidence that the signature was authentic.”). The moving party 15 may submit such evidence in its moving papers or on reply when authenticity is challenged. 16 Id.; see also Ruiz v. Moss Bros. Auto Grp., Inc., 232 Cal. App. 4th 836, 847–48 (2014). Plaintiff’s Electronic Signature 17 Under California Civil Code Section 1633.7, an electronic signature “has the same 18 legal effect as a handwritten signature.” Ruiz, 232 Cal. App. 4th at 843. “Still, any writing 19 must be authenticated before the writing . . . may be received in evidence.” Id. (citing Cal. 20 Evid. Code § 1401). Pursuant to California Civil Code Section 1633.9(a), “an electronic 21 record or electronic signature is attributable to a person if it was the act of the person. The 22 act of the person may be shown in any manner, including a showing of the efficacy of any 23 security procedure applied to determine the person to which the electronic record or 24 electronic signature was attributable.” Courts have previously held that the moving party 25 26 27 28 provides hospice and other healthcare services to its clients in fourteen states, including California. (Malhotra Decl. ¶ 2.) Defendant also purchases products from out-of-state vendors. (Id.) Accordingly, Defendant’s business affects interstate commerce sufficiently for the FAA to apply. 6 3:24-cv-00176-H-MMP 1 meets this burden by submitting a declaration detailing the company’s “security 2 precautions regarding transmission and use of an applicant’s unique username and 3 password, as well as the steps an applicant would have to take to place his or her name on 4 the [agreement].” See Espejo, 246 Cal. App. 4th at 1062. 5 Here, Defendant met its initial burden by attaching a copy of the Agreement, which 6 contains a broad arbitration clause and Plaintiff’s electronic signature. (Malhotra Decl., 7 Ex. 5); see Espejo, 246 Cal. App. 4th at 1060. Plaintiff challenges the authenticity of her 8 signature, arguing that she “denies seeing, reviewing, understanding, and signing” the 9 Agreement. (Doc. No. 14 at 11.) In its moving papers and on reply, Defendant provides 10 evidence detailing the security precautions regarding the transmission and use of Plaintiff’s 11 username and password as well as the steps Plaintiff would have taken to execute the 12 Agreement electronically. (Malhotra Decl., Exs. 1–5; Doc. No. 17-1, Declaration of Lino 13 Vargas (“Vargas Decl.”).) Specifically, Defendant provides each employee with a unique 14 work email account. (Malhotra Decl. ¶ 4.) In order to access this unique email account, 15 employees are required to create a unique and secure password. (Id.) Defendant’s email 16 system automatically prompts employees to change their passwords approximately every 17 three months in order to ensure that only that specific employee can access and view the 18 emails sent to their work email account. (Id.) 19 In January of 2023, all current employees, including Plaintiff, received the 20 Agreement through their work email accounts via DocuSign. (Id. ¶¶ 3, 5.) Plaintiff would 21 have then been required to use her unique username and password to access the email. (Id. 22 ¶¶ 4, 9.) Importantly, only the person who has access to the email address and secure 23 password is able to access, review, and sign the Agreement. (Id. ¶ 9.) Should someone 24 using an email address other than the intended recipient attempt to access, review, and sign 25 the Agreement, DocuSign generates an error message and denies access. (Id.) The email 26 which contained the Agreement states that Defendant is providing the Agreement to the 27 employee and explains why Defendant was sending the Agreement. (Id., Ex. 1.) Upon 28 clicking “Review Document” at the top of the email, Plaintiff would have then been 7 3:24-cv-00176-H-MMP 1 brought to a separate page which would have allowed her to review and sign the 2 Agreement. (Id. ¶ 6 & Ex. 1.) When an employee elects to sign the Agreement, DocuSign 3 generates an electronic notification in the form of a “Certificate of Completion.” (Id. ¶ 8.) 4 The Certificate of Completion shows which documents, if any, the employee signed, along 5 with the date, time, name, IP address, and email address of the person who signed the 6 document. (Id.) According to the Certificate of Completion, Plaintiff executed the 7 Agreement on January 20, 2023, at approximately 4:54 p.m. through her work email 8 account. (Id., Ex. 5.) Further, the IP address listed on the Certificate of Completion 9 is and below the IP address it states that the Agreement was “[s]igned 10 using mobile.” (Id.) As Defendant’s Manager of IT Security Operations declared, IP 11 address is connected to Defendant’s company-owned mobile devices, 12 including the cellular phone it provided to Plaintiff as part of her employment. (Vargas 13 Decl. ¶ 2.) Plaintiff does not allege that she gave anyone access to her company-owned 14 mobile device or shared her work email password with anyone. (See Doc. Nos. 14, 15.) 15 In opposition, Plaintiff implies that someone from Defendant’s IT department may 16 have signed the Agreement. (Doc. No. 14 at 8.) But the only individuals that can gain 17 access to an employee’s email account are Defendant’s Enterprise Engineering Team, and 18 they can only do so with documented approval from both their manager and non-IT 19 management. (Vargas Decl. ¶ 4.) Further, there is no record of any request to access 20 Plaintiff’s email account in January of 2023, when Plaintiff received and signed the 21 Agreement. (Id.) Moreover, the personnel within Defendant’s Enterprise Engineering 22 Team do not have access to employees’ mobile devices and they operate in a distinct 23 geographical area from Plaintiff and utilize devices connected to different IP addresses. 24 (Id. ¶ 5.) 25 Defendant has produced sufficient evidence to establish that the electronic signature 26 was “the act of” Plaintiff. Cal. Civ. Code § 1633.9(a); Espejo, 246 Cal. App. 4th at 1062. 27 Accordingly, Defendant has met its burden of authenticating Plaintiff’s electronic 28 signature. See Ruiz, 232 Cal. App. 4th at 844 (“The burden of authenticating an electronic 8 3:24-cv-00176-H-MMP 1 signature is not great.”). 2 B. 3 Next, Plaintiff argues that the Agreement is unenforceable because Defendant did 4 not sign it and the conduct between the parties does not support a finding of an agreement 5 to arbitrate claims. (Doc. No. 14 at 9–12.) “The writing memorializing an arbitration 6 agreement need not be signed by both parties in order to be upheld as a binding arbitration 7 agreement.” Serafin v. Balco Properties Ltd., LLC, 235 Cal. App. 4th 165, 176 (2015). 8 Rather, “it is the presence or absence of evidence of an agreement to arbitrate which 9 matters.” Banner Ent., Inc. v. Superior Court, 62 Cal. App. 4th 348, 361 (1998) (emphasis 10 removed); Cal. Civil Code § 3388; see also Serafin, 235 Cal. App. 4th at 177 (“Just as with 11 any written agreement signed by one party, an arbitration agreement can be specifically 12 enforced against the signing party regardless of whether the party seeking enforcement has 13 also signed, provided that the party seeking enforcement has performed or offered to do 14 so.”). “Evidence confirming the existence of an agreement to arbitrate, despite an unsigned 15 agreement, can be based, for example, on ‘conduct from which one could imply either 16 ratification or implied acceptance of such a provision.’” Serafin, 235 Cal. App. 4th at 176 17 (quoting Banner Ent., 62 Cal. App. 4th at 361). Evidence of an Agreement to Arbitrate 18 Here, Defendant authored the Agreement and the terms of the Agreement evidence 19 an intent to be bound by the Agreement: “The Company and I each waive and relinquish 20 our respective rights to bring a claim against the other in court . . . .” (Malhotra Decl., 21 Ex. 5 ¶ 2.) Further, Defendant promptly moved to compel arbitration and stay proceedings. 22 (Doc. No. 6.) Such evidence confirms the existence of an agreement to arbitrate. See 23 Serafin, 235 Cal. App. 4th at 176–77. Accordingly, Plaintiff must show the Agreement is 24 both procedurally and substantively unconscionable in order for the Agreement to be 25 deemed unenforceable. Sanchez, 61 Cal. 4th at 911. 26 C. 27 Plaintiff argues that the Agreement is procedurally unconscionable because (1) the 28 Agreement is contract of adhesion; (2) the applicable arbitration rules were not attached to Procedural Unconscionability 9 3:24-cv-00176-H-MMP 1 Agreement; (3) Defendant did not explain the Agreement to her; and (4) the Certificate of 2 Completion shows that the Agreement was reviewed and signed in twenty-seven seconds. 3 (Doc. No. 14 at 14–16.) “Procedural unconscionability analysis focuses on oppression or 4 surprise.” Negrampa v. MailCoups, Inc., 469 F.3d 1257, 1280 (9th Cir. 2006) (quotation 5 marks omitted) (quoting Flores v. Transamerica Home First, Inc., 93 Cal. App. 4th 846, 6 853 (2007)). “Oppression arises from an inequality of bargaining power that results in no 7 real negotiation and an absence of meaningful choice, while surprise involves the extent to 8 which the supposedly agreed-upon terms are hidden in a prolix printed form drafted by the 9 party seeking to enforce them.” Id. (quotation marks omitted). If procedural 10 unconscionability exists, a court will scrutinize the substantive terms of the agreement. 11 Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1244 (2016). 12 Plaintiff first argues that the Agreement is procedurally unconscionable because it is 13 a contract of adhesion. (Doc. No. 14 at 14–16.) In support of her argument that the 14 Agreement is a contract of adhesion, Plaintiff argues that the Agreement “was purportedly 15 presented to her on a take-it-or-leave-it basis.” (Id. at 14.) A contract of adhesion “is a 16 standardized contract, which, imposed and drafted by the party of superior bargaining 17 strength, relegates to the subscribing party only the opportunity to adhere to the contract or 18 reject it.” Scissor-Tail, 28 Cal. 3d at 817. However, “California courts recognize that 19 adhesion only establishes a minimal degree of procedural unconscionability.” Hodsdon v. 20 DirecTV, LLC, No. 12-cv-02827-JSW, 2012 WL 5464615, at *5 (N.D. Cal. Nov. 8, 2012); 21 Loewen v. Lyft, Inc., 129 F. Supp. 3d 945, 957 (N.D. Cal. 2015); Gatton v. T-Mobile, 22 USA, Inc., 152 Cal. App. 4th 571, 581 (2007). Here, as indicated in its title and throughout 23 the document, the Agreement was “mutual and voluntary.” (Malhotra Decl., Ex. 5 ¶ 1 24 (“The Company and its affiliates, subsidiaries, or parents . . . and I voluntarily enter into 25 this Mutual and Voluntary Agreement to Arbitrate Claims.”).) Plaintiff also had the choice 26 to decline to sign the Agreement. (Id. ¶ 7.) And Plaintiff has presented no evidence to the 27 contrary. Even had Plaintiff presented evidence that the Agreement was a condition of her 28 employment, this would, at most, constitute a minimal amount of procedural 10 3:24-cv-00176-H-MMP 1 unconscionability. See Poublon, 846 F.3d at 1262 (“[T]he adhesive nature of a contract, 2 without more, would give rise to a low degree of procedural unconscionability at most.”); 3 Serpa v. California Surety Investigations, Inc., 215 Cal. App. 4th 695, 704 (2013) (“[T]he 4 degree of procedural unconscionability of an adhesion agreement is low.”). 5 Plaintiff next argues that the Agreement is procedurally unconscionable because the 6 applicable arbitration rules were not attached to Agreement. (Doc. No. 14 at 15.) Plaintiff 7 relies on Trivedi v. Curexo Tech. Corp., 189 Cal. App. 4th 387 (2010), to support her 8 argument that the failure to provide the applicable arbitration rules renders the contract 9 procedurally unconscionable. (Doc. No. 14 at 15.) More recent cases, however, have held 10 that “the failure to specify or attach applicable rules does not increase the procedural 11 unconscionability of [an employment application] or its arbitration provision.” Dominguez 12 v. Stone Brewing Co. LLC, No. 20-cv-00251-WQH-BLM, 2020 WL 3606396, at *7 (S.D. 13 Cal. July 2, 2020); Hodsdon, 2012 WL 5464615, at *5 (holding that “procedural 14 unconscionability can be avoided if the arbitration rules are incorporated into the contract 15 by reference, such incorporation is clear, and the rules are readily available”); see also Lane 16 v. Francis Capital Mgmt., 224 Cal. App. 4th 676, 690 (2014) (holding that failure to attach 17 AAA rules to arbitration agreement did not render the agreement procedurally 18 unconscionable, because rules were easily accessible on the Internet and plaintiff did not 19 lack means or capacity to retrieve them). Moreover, the California Supreme Court has 20 rejected the argument that a failure to attach arbitration rules renders the contract 21 unconscionable. Baltazar, 62 Cal. 4th at 1246. 22 As for Plaintiff’s claim that Defendant did not explain the Agreement to her, “[n]o 23 law requires that parties dealing at arm’s length have a duty to explain to each other the 24 terms of a written contract.” Ramos v. Westlake Servs. LLC, 242 Cal. App. 4th 674, 686 25 (2015). Regardless, Defendant explained the Agreement in the DocuSign email that was 26 sent to all current employees, including Plaintiff. (Malhotra Decl. ¶¶ 3, 5 & Ex. 1.) And 27 “[i]t is hornbook law that failing to read an agreement before signing it does not prevent 28 formation of a contract.” Iyere v. Wise Auto Group, 87 Cal. App. 5th 747, 759 (2023) 11 3:24-cv-00176-H-MMP 1 (citing Upton v. Tribilcock, 91 U.S. 45, 50 (1875) (“It will not do for a [person] to enter 2 into a contract and when called upon to respond to its obligations, to say that [they] did not 3 read it when [they] signed it, or did not know what it contained.”)). Thus, Plaintiff’s 4 argument that the Agreement was reviewed and signed in twenty-seven seconds is also 5 unavailing. 6 After reviewing the Agreement and the surrounding context, the Court agrees with 7 Defendant that the Agreement is not procedurally unconscionable. As such, Plaintiff must 8 make a strong showing of substantive unconscionability in order to succeed on her 9 unconscionability argument. Armendariz, 24 Cal. 4th at 114; Serpa, 215 Cal. App. 4th 10 at 704 (explaining that when the degree of procedural unconscionability is low, “the 11 agreement will be enforceable unless the degree of substantive unconscionability is high”). 12 D. 13 Plaintiff argues that the Agreement is substantively unconscionable because 14 it: (1) lacks reciprocity; (2) contains a class action waiver; (3) prohibits Plaintiff from 15 recovering attorney fees; (4) requires both parties to bear their own costs; (5) waives 16 Plaintiff’s right to a jury trial; and (6) does not provide for a neutral arbitrator, sufficient 17 discovery, or a proper decision that would allow for judicial review. (Doc. No. 14 18 at 16–18.) “Substantive unconscionability centers on the terms of the agreement and 19 whether those terms are so one-sided as to shock the conscience.” Ingle v. Circuit City 20 Stores, Inc., 328 F.3d 1165, 1172 (9th Cir. 2003) (quotation marks omitted) (quoting 21 Kinney v. United HealthCare Servs., Inc., 70 Cal. App. 4th 1322, 1330 (1999)). 22 Specifically, California law requires that arbitration agreements between employer and 23 employees be bilateral. See Armendariz, 24 Cal. 4th at 117–18. “If the arbitration system 24 established by the employer is indeed fair, then the employer as well as the employee 25 should be willing to submit claims to arbitration.” Id. Substantive Unconscionability 26 Here, the Agreement is bilateral. The Agreement expressly states that “the Company 27 and [Plaintiff] agree to use binding arbitration as the means to resolve all disputes that may 28 arise out of or relate to [Plaintiff’s] application for employment or employment with the 12 3:24-cv-00176-H-MMP 1 Company.” (Malhotra Decl., Ex. 5 ¶ 1). The Agreement also states that arbitration “is the 2 exclusive remedy for all disputes” between the parties, and the Agreement “includes any 3 such claims against the Company’s affiliates, . . . owners, . . . [and] employees.” (Id. 4 ¶¶ 2, 5.) Thus, Defendant, as well as Plaintiff, agreed to submit any claim they had against 5 the other to binding arbitration. (See id. ¶¶ 1–2, 5.) This satisfies the requirement of 6 bilateral consent to arbitration. Armendariz, 24 Cal. 4th at 117–18. 7 Plaintiff next argues that the Agreement is substantively unconscionable because it 8 contains a class action waiver. (Doc. No. 14 at 17.) As Defendant correctly notes on reply, 9 this is not a class action lawsuit. (See Compl.) And even if this was a class action lawsuit, 10 class action waivers are enforceable under both federal and state law. Epic Systems Corp. 11 v. Lewis, 584 U.S. 497 (2018); Truly Nolen of Am. v. Superior Ct., 208 Cal. App. 4th 487, 12 516 (2012). Plaintiff also argues that the Agreement is substantively unconscionable 13 because it prohibits Plaintiff from recovering attorney fees and requires both parties to bear 14 their own costs. (Doc. No. 14 at 16–18.) But the Agreement does not prevent Plaintiff 15 from recovering fees, costs, or any other form of relief allowed. (See Malhotra Decl., 16 Ex. 5.) Rather, the Agreement expressly states that “[t]he arbitrator shall base resolution 17 of all disputes solely upon the law governing the claims and defenses pleaded. The 18 arbitrator may not invoke any basis . . . other than such controlling law.” (Id. ¶ 14.) 19 Furthermore, the fact that the Agreement is otherwise silent on costs does not render the 20 Agreement unenforceable. See Armendariz, 24 Cal. 4th at 113 (“A mandatory employment 21 arbitration agreement that contains within its scope the arbitration of [California Fair 22 Employment and Housing Act (“FEHA”)] claims impliedly obliges the employer to pay 23 all types of costs that are unique to arbitration . . . . The absence of specific provisions on 24 arbitration costs would therefore not be grounds for denying the enforcement of an 25 arbitration agreement.”). 26 Plaintiff also takes issue with the fact that the Agreement waives her right to a jury 27 trial. But again, this does not render the Agreement unconscionable. Under both federal 28 and state law, arbitration agreements are valid and enforceable. See 9 U.S.C. § 2; Cal. 13 3:24-cv-00176-H-MMP 1 Code Civ. Proc. § 1281. And contrary to Plaintiff’s assertion, the Agreement provides for 2 a neutral arbitrator: “[T]he arbitrator selected will be a retired judge or an otherwise 3 qualified individual to whom the Company and [Plaintiff] agree, and will be subject to 4 disqualification on the same grounds as would apply to a judge of such court.” (Malhotra 5 Decl., Ex. 5 ¶ 14.) Additionally, although the Agreement is silent as to discovery, (see 6 Malhotra Decl., Ex. 5), express discovery language is not necessary because “when parties 7 agree to arbitrate statutory claims, they also implicitly agree, absent express language to 8 the contrary, to such procedures as are necessary to vindicate that claim.” Ramos v. 9 Superior Court, 28 Cal. App. 5th 1042, 1062 (2018) (quoting Armendariz, 24 Cal. 4th 10 at 106). Finally, the Agreement requires the arbitrator to issue a written award and judicial 11 review is provided by statute under both federal and state law. (Malhotra Decl., Ex. 5 12 ¶ 14); 9 U.S.C. §§ 9–11; Cal. Code Civ. Proc. § 1285. 13 Accordingly, Plaintiff has failed to meet her burden to show that the Agreement is 14 substantively unconscionable. See Sanchez, 61 Cal. 4th at 911. 15 /// 16 /// 17 /// 18 19 20 21 22 23 24 25 26 27 28 14 3:24-cv-00176-H-MMP 1 CONCLUSION 2 For the foregoing reasons, the Court grants Defendant’s motion to compel 3 arbitration. (Doc. No. 6.) The Court compels Plaintiff to submit her claims against 4 Defendant to arbitration and the parties are hereby ordered to proceed to arbitration in 5 accordance with the terms of the Agreement. The Court continues all dates, if any, until 6 the completion of arbitration but reserves the right to dismiss the action if the parties do 7 not diligently pursue their claims before the arbitrator, or for any reason justifying 8 dismissal. The Court orders the parties to file a joint status report regarding the arbitration 9 within six (6) months from the date of this of this order, and to file a joint status report 10 every six (6) months thereafter until the completion of arbitration. The Court further 11 orders the parties to file a joint status report within seven (7) days following the completion 12 of arbitration. 13 14 15 16 IT IS SO ORDERED. DATED: May 9, 2024   MARILYN L. HUFF, District Judge UNITED STATES DISTRICT COURT 17 18 19 20 21 22 23 24 25 26 27 28 15 3:24-cv-00176-H-MMP

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