Case Name: D. Puluc v. BJ’s Restaurants, Inc.
Case Number: 17CV306340

Factual and Procedural Background

This case arises out of Plaintiff, Dilma Puluc’s (“Puluc”), employment with Defendant, BJ’s Restaurant (“BJ’s”). Her employment with BJ’s began on or about April 14, 2012. On the same day she was hired, Plaintiff and BJ’s executed a Mutually Binding Arbitration Agreement according to which they would arbitrate any and all disputes between them relating to Plaintiff’s employment with BJ’s and any disputes between BJ’s employees (“Agreement”). Plaintiff’s employment terminated on or about April 18, 2016. (Defendant BJ’s Restuarants, Inc.’s Motion to Compel Arbitration and Dismiss or Stay Action. “Motion to Compel”.)

On January 27, 2017, plaintiff filed her Complaint against Defendants BJ’s Restaurant, Alvaro Castillo, who has joined BJ’s Restaurant in this instant motion, and Javiar Llanos. Her complaint asserts six causes of action stemming from the sexual harassment she allegedly experienced by Castillo and Llanos at BJ’s Cupertino, California restaurant: sexual harassment, retaliation, failure to take reasonable steps to prevent and/or correct harassment and/or retaliation, constructive discharge, intentional infliction of emotional distress, and assault. (Complaint for Damages “Complaint”.)

On March 20, 2017, plaintiff’s counsel met with defense Counsel to confer on arbitration. Plaintiff’s counsel informed defense counsel that Plaintiff was a monolingual Spanish speaker who could not read, write, or speak English and requested a Spanish language copy of the arbitration agreement. Prior to that, defense counsel had only provided Plaintiff’s counsel with an English language copy of the arbitration agreement signed by Plaintiff. Defense counsel did not provide a Spanish language copy but rather filed this motion to compel arbitration, supported by a declaration from one Tanya Tibbo. (Memorandum of Points and Authorities in Support of Plaintiff’s Opposition to Defendant BJ’s Restaurant, Inc.’s Motion to Compel Arbitration and Dismiss or Stay Action at p. 2. “Opposition”.)

In response, Plaintiff filed her Opposition, Plaintiff contends that she is not bound by the arbitration agreement because she did not assent to it, and that the contract is unenforceable because it is permeated with procedural and substantive unconscionability. In support of her contentions, plaintiff provides her own declaration: Declaration of Dilma Puluc In Support of Plaintiffs Opposition to Defendant BJ’s Restaurant, Inc.’s Motion to Compel Arbitration and Dismiss or Stay Action (“Puluc Decl.”).

According to her declaration, when Plaintiff arrived to work at the BJ’s restaurant in Cupertino, she was told she needed to complete new employee paperwork, including an arbitration agreement, written entirely in English. (Puluc Decl. ¶8.) Plaintiff did not attend school, and cannot read, write, or speak English, except for a few basic phrases. (Puluc Decl. ¶¶1-2.) The kitchen manager for the Cupertino restaurant, Miguel Castro, instructed Plaintiff on how to complete this paperwork, but did not explain any of the paperwork to her. Rather, he simply told her where to sign the various documents. Castro did not explain that Plaintiff was signing an arbitration agreement, or explain to Plaintiff what arbitration was. Plaintiff did not know she was giving up her right to sue her employer in court. (Puluc Decl. ¶¶8-9.) The arbitration agreement signed by plaintiff provides in pertinent part:

“Employee and Company understand that by entering into this agreement, they are . . . waiving any right they may have to resolve employment disputes through a jury trial.” (Agreement at p. 1.)

Rather the parties would agree to arbitration, and the Agreement provides:

“The arbitration shall be conducted under the auspice of Judicial Arbitration & Mediation Services, Inc (‘JAMS’), or its successors, before a mutually agreed upon neutral arbitrator selected in accordance with the JAMS Employment Arbitration Rules (‘JAMS Rules’).” (Id.)

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On May 24, 2017, the court issued a Ruling granting joinder of Castillo and instructing the parties to obtain a declaration from Miguel Castro so that the court could better ascertain the circumstances surrounding Plaintiff’s execution of the arbitration agreement.

Defendant BJ’s filed a Response to the Ruling on June 20, 2017, containing additional supplemental briefing and another declaration from Tanya Tibbo, but did not produce a declaration from Mr. Castro. Plaintiff filed her Objection to Defendant’s Response to the Ruling on June 22, 2017, requesting the Court to disregard Defendant’s Response, asserting that it improperly introduces new evidence and legal arguments, or to permit further briefing by Plaintiff. On June 27, 2017, the Court issued a Ruling permitting Plaintiff to respond to Defendant’s supplemental briefing. On July 10, 2017, Plaintiff filed Plaintiff’s Further Briefing in Opposition to Defendant BJ’s Restaurant, Inc.’s Motion to Compel Arbitration and Dismiss or Stay Action, (“Further Briefing”) and Supplemental Declaration of Dilma Puluc in Support of Plaintiff’s Further Briefing in Opposition to Defendant BJ’s Restaurant, Inc.’s Motion to Compel Arbitration and Dismiss or Stay Action (“Supp. Decl.”).

I. Legal Analysis

A. BJ’s Arbitration Agreement is Not a Valid Contract Since There Was No “Meeting of the Minds”

BJ’s Restaurant, as the party seeking to compel arbitration, has the burden of proving the existence of an agreement to arbitrate by a preponderance of the evidence. (Rosenthal v. Great W. Fin. Sec. Corp. (1996) 14 Cal.4th 394, 413.) “[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit [Citations.]” (AT & T Techs., Inc. v. Communication Workers of America et al. (1986) 475 U.S. 643, 648.)
“There is no contract until there is mutual consent of the parties…. Mutual consent necessary to the formation of a contract ‘is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.’ [Citation.]” (Deleon v. Verizon Wireless, LLC (2012) 207 Cal.App.4th 800, 813) “However, when the offeree does not know that a proposal has been made to him this objective standard does not apply.” (Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 993.) Hence, “ ‘[a]n offeree, regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious.’ [Citation.] ‘This principle of knowing consent applies with particular force to provisions for arbitration.’ [Citation.] ‘If a party wishes to bind in writing another to an agreement to arbitrate future disputes, such purpose should be accomplished in a way that each party to the arrangement will fully and clearly comprehend that the agreement to arbitrate exists and binds the parties thereto.’ [ Citation.]” (Knutson v. Sirius XM Radio Inc. (9th Cir. 2014) 771 F.3d 559 (emphasis added); Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 993.) That is not the case here.

Indeed, the evidence is overwhelming and undisputed that plaintiff could not read, write or speak English and did not understand that by signing a flurry of documents laid before her, she was giving up her Constitutional right to a jury trial and agreeing to arbitrate any disputes with her employer. Moreover, the evidence is abundant and undisputed that BJ’s knew plaintiff was not proficient in English when they hired her.

In her declaration, Ms. Puluc stated that when she sought employment at BJ’s restaurant in March 2012, she spoke in Spanish with Miguel Castro whom she believed was the kitchen manager. During her initial interview, plaintiff told Mr. Castro she wanted to work at the salad station in the kitchen which she believed would command a higher hourly wage. Mr. Castro asked if plaintiff spoke and understood English and she replied she did not. He then told her she would not be eligible to work in the kitchen because she would not be able to understand the food tickets which were written in English. He said she could work at the preparation station instead because that position did not require any English comprehension.

Ms. Puluc tried to fill out the application and submitted same. When she did not hear back from BJ’s, she called Miguel Castro to follow up. He relayed he did not receive any paperwork and told her it would be easier if he filled out the paperwork for her and submit same on her behalf. Thereafter, Mr. Castro called plaintiff and asked her questions from the job application. She gave him the answers which he then used to fill out the job application for her.

And, when plaintiff started working at BJ’s around April 14, 2012, Mr. Castro again helped her fill out the new employee documents which were in English. Mr. Castro did not explain any of the documents to plaintiff but told her where to sign her name on each document. Mr. Castro told her she needed to sign the documents so she could start working.

Plaintiff did not appreciate she was signing an Arbitration Agreement because she did not speak English and could not read what she was being told to sign. Mr. Castro did not explain what arbitration was or tell her that by signing the document she was giving away her right to sue BJ’s in court if necessary.

Plaintiff also signed the Employee Handbook. But, similar to the previous documents, she could not read the English words on those documents and signed where Mr. Castro instructed her to sign.

She could not read other employment documents she was presented with because they were in English. As with the other documents, she was told to sign them and did. Plaintiff, a single mother who wanted a paycheck to support her family, felt she had no choice other than to sign the employment documents she was told to sign.

As further proof BJ’s knew plaintiff did not speak English, when plaintiff complained to Rodney Winstead, the General Manager of the Cupertino restaurant, about the sexual harassment she was experiencing, she had to bring a translator with her because Mr. Winstead did not speak Spanish.

As an aside, Ms. Puluc noted that many of kitchen workers at BJ’s only spoke and understood Spanish and did not speak or understand English. They always had a supervisor who was fluent in Spanish and spoke to them exclusively in Spanish.

On May 24, 2017, this Court asked BJ’s if it was possible to submit a declaration from Miguel Castro to determine the circumstances under which plaintiff signed employment documents, including the arbitration agreement. The Court wanted to know if Mr. Castro explained the arbitration agreement to plaintiff and whether BJ’s could dispute plaintiff’s assertion she could not read, write in or speak English.

BJ’s indicated it did not obtain a declaration from Mr. Castro because he is no longer an employee. However, BJ’s submitted an additional declaration from Ms. Tibbo showing more English language documents plaintiff signed. Those submissions are not helpful in deciding the issue of whether plaintiff actually understood the arbitration agreement she signed.

The Court notes BJ’s did not submit a declaration from defendant Alvaro Castillo to dispute plaintiff’s testimony she cannot read, understand or speak English. Mr. Castillo is still currently an employee of BJ’s and actually joined in this motion.

The Court finds Plaintiff did not assent to the Agreement because she was not even aware of the proposal. The uncontroverted facts indicate that Plaintiff signed the purported Agreement without even being aware of the contractual nature of the Agreement. (Puluc Decl. 9 [“I did not know I was signing an arbitration Agreement, because I do not speak English and could not read what I was being told to sign. Mr. Castro did not explain what arbitration was.”].)

Defendant has not submitted evidence tending to show that Plaintiff could read English, knew that she was entering into a contractual relationship, was ever provided with the Agreement in Spanish, or that any other attempt was made to accomplish the Agreement in a way that plaintiff could fully and clearly comprehend its existence. The declarations from Tanya Tibbo fail to establish that Tibbo had first-hand knowledge of the circumstances surrounding Plaintiff’s execution of the purported Agreement. (Knutson v. Sirius XM Radio Inc. (9th Cir. 2014) 771 F.3d 559; Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 993.)

Not knowing what arbitration was (Puluc Decl. ¶12), Plaintiff merely believed that the documents were “basic employee forms” (Supp. Decl. ¶10). Therefore, Plaintiff did not knowingly consent. There was no “meeting of the minds” on an agreement to arbitrate. Bustamante v. Intuit (2006) 141 Cal. App 4th.199, 208. (no contract is formed until there is a meeting of the minds on all material points). Accordingly, there is no valid agreement to arbitrate between Defendant and Plaintiff.

B. The Arbitration Agreement is Unconscionable

Moreover, the “agreement” to arbitrate should be considered procedurally unconscionable. An agreement to arbitrate, like any other contract, is subject to revocation if the agreement is unconscionable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 98, 99(Armendariz ). abrogated on other grounds by AT & T Mobility LLC v. Concepcion, 563 U.S. 333 (2011)). The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.” Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 246, 145 Cal.Rptr.3d 514, 282 P.3d 1217 (Pinnacle ).) Oppression arises from 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. (Id. at p. 247)

There can be no question there was unequal bargaining power between BJ’s, a corporate restaurant chain and plaintiff, an immigrant from Guatemala with little education and no English proficiency. Plaintiff had no real power to negotiate the terms of her employment and apparently signed whatever document she was told to sign if she wanted to start working. Ms. Puluc was a single mother who needed a job to support her family.

Further, BJ’s knew plaintiff did not read, speak or understand English, yet compelled her to sign an English language arbitration agreement in which she gave up her Constitutional right to a jury trial. Although apparently easily within grasp, it is undisputed that BJ’s did not provide a Spanish language speaker to explain the meaning or effect of the agreement to her. Nor did BJ’s provide plaintiff with a Spanish language version of the arbitration agreement. BJ’s certainly has the capability of providing Spanish language documents to its employees. Indeed, when plaintiff initiated her complaint with the Equal Employment Opportunity Commission, BJ’s provided a written response which included English and Spanish versions of documents such as “Open Door Policy” (Politica de Puertas Abiertas”) and “Team Member Hotline.” (“Linea Telefonica Para Miembros Del Equipo.”) (McKenna Decl. Para 2.)

In Carmona v. Lincoln Millennium Car Wash (2014) 226 Cal. App.4th 75, 85, plaintiff spoke only Spanish and could not read or write in English. His employer provided him documents to sign as a condition of his employment. Some of the documents were in English and some were in Spanish. The Court found there was a high degree of procedural unconscionability because of the element of surprise. The carwash company hid the enforceability clause and the entire confidentiality sub-agreement by failing to translate that portion of the agreement into Spanish.

Here, the facts are much more egregious and the element of surprise even more profound. In this case, BJ’s provided English-only documents which included an agreement to arbitrate to an employee BJ’s knew could not read, speak or understand English. Where the surprise in Carmona was partial, it was wholesale for Ms. Puluc in this case. There is an extremely high degree of procedural unconscionability with the arbitration agreement in this case.

Similarly, the Court found surprise in Samaniego v. Empire Today, LLC (Samaniego) (2012) 205 Cal.App.4th 1138. In that case, plaintiffs were carpet installers who were not proficient with the English language. They requested but were not given Spanish translations of documents they were required to sign in order to work. Taken together with other factors, this supported an element of surprise. (See Samaniego at 1146.) The plaintiff in this case, Ms. Puluc, was also told to sign English language documents she could not understand as a condition to working at BJ’s presumably on a take it or leave it basis. Given her circumstances, plaintiff felt compelled to sign these documents she did not understand. In sum, it appears BJ’s was more concerned with having the documents signed than putting Plaintiff on notice of terms of the agreement. With both oppression and surprise present, the arbitration agreement was procedurally unconscionable, warranting closer scrutiny of the substantively unfair terms.

The Court recognizes it must also consider substantive unconscionability, which examines mutuality between the parties. Nyulassy v. Lockheed Martin Corp (2004) 120 Cal App 4th 1267, 1287. Plaintiff has the burden of proving all six causes of action she has asserted against each of the three defendants she has sued. This will likely require several depositions of parties and percipient witnesses. Yet, the arbitration agreement in this case allows for only three depositions, which includes party and non-party witnesses, unless otherwise ordered by the arbitrator. Adequate discovery is a critical part of essential fairness that must be protected in cases with claims under the Fair Employment and Housing Act (FEHA). Armendariz, supra, 24 CA4th at 104. Here, plaintiff runs the risk the arbitrator may not allow her to prove her case beyond the taking of three defendant depositions.
Moreover, BJ’s holds a distinct lop-sided advantage because it may interview current employees, including percipient witnesses to the alleged sexual harassment, without seeking an order from the arbitrator. This opportunity is not available to plaintiff. Substantively, the arbitration agreement is unconscionable.

In sum, on the sliding scale of unconscionability, there is an extremely high degree of procedural unconscionability and less substantive unconscionability. Carmona, 226 Cal. App. 74, 85. Nonetheless, the entire arbitration agreement is tainted by unconscionability and cannot be severed.

Defendant’s Motion to Compel Arbitration and Stay or Dismiss Action is DENIED.