The court DENIES Defendant 24 Hour Fitness USA, Inc.’s motion to dismiss the action, but GRANTS its alternative request to compel Plaintiff Clarence Franklin to arbitrate the claims in this action.

As a preliminary matter, Defendant’s request for judicial notice of 5 trial court orders is denied. (Request for Judicial Notice, Exs. A-E.) Judicial notice of court orders is proper under Evid. Code, Section 452, subd. (d), to establish the existence of the findings and decisions made, but not the truth of those findings. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-1566.) The existence of findings by other trial courts is not relevant to the issue at hand. (Fenske v. Bd. of Admin. (1980) 103 Cal.App.3d 590, 596 [“trial courts make no binding precedents”].) And the truth of those findings cannot be judicially noticed.

Turning to the merits of the motion, Defendant met its burden of proving an entitlement to compel arbitration under Defendant’s January 2005 Employee Handbook containing an “Arbitration of Disputes” policy. There is no dispute that Plaintiff signed an “Employee Handbook Receipt Acknowledgement” (the “Acknowledgement”) indicating he received the January 2005 Employee Handbook with the “Arbitration of Disputes” Policy. (Echavarria Decl., Ex. E.) The arbitration policy provides that Plaintiff agrees to submit disputes “arising out of [his] employment” exclusively to binding and final arbitration. (Loar Decl., Ex. B.) This action arises out of Plaintiff’s employment with Defendant. And Plaintiff refused to arbitrate his claims in this action. (Echavarria Decl., Ex. F.)

Plaintiff argues, however, that he never received a copy of the 2010 Employee Handbook, which includes a provision to opt-out of Defendant’s “Arbitration of Disputes” Policy. Plaintiff asserts that, when he signed the 2005 Acknowledgement, arbitration was a condition of his employment. Had he received the 2010 Handbook, he would have opted out of arbitration.

The Acknowledgement specifically states that Defendant “has the right to revise, delete, and add to the employee handbook.” (Echavarria Decl., Ex. E.) “An arbitration agreement between an employer and an employee may reserve to the employer the unilateral right to modify the agreement. But the covenant of good faith and fair dealing implied in every contract requires the employer to exercise that right fairly and in good faith so as not to deprive the employee of his or her reasonable expectations under the agreement. Similarly, the employer must give the employee reasonable notice regarding changes the employer makes so the employee is aware of his or her rights under the agreement.” (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 61 [internal citations omitted].)

In its supplemental papers, Defendant offers evidence that the 2010 handbook and revised arbitration policy applied only to its employees in Texas, and not to any of its California employees. (Supp. Loar Decl.) Although Plaintiff raises questions as to why Defendant did not argue this fact sooner, he does not submit any evidence to refute this fact. For this reason, the court finds a valid arbitration agreement exists between the parties by virtue of the 2005 employee handbook.

Based on the evidence and argument before the court, Plaintiff failed to meet his burden of establishing that the arbitration agreement was unconscionable or that Defendant waived its right to arbitrate.

As to unconscionability, there is a procedural and a substantive element: the procedural element focuses on the existence of oppression or surprise and the substantive element focuses on overly harsh or one-sided results. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal. 4th 83, 114.) The elements, however, need not be present in the same degree: “…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.” (Ibid.)

Although Plaintiff presents evidence of procedural unconscionability, there is insufficient evidence of substantive unconscionability. In assessing substantive unconscionability, the “paramount consideration” is mutuality of the obligation to arbitrate. (Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal. App.4th 1267, 1287.) Here, the arbitration provision in the 2005 handbook provides, any employment related dispute between Defendant and its employees shall be arbitrated, “whether initiated by an employee or by 24 Hour Fitness.” (Echevarria Decl., Ex. E.)

As to waiver, the evidence does not support a finding that Defendant waived the right to arbitration. The discovery conducted thus far related only to the issue of arbitration. The “litigation machinery” has not been “substantially invoked” (Wagner Construction Company v. Pacific Mechanical Corporation (2007) 41 Cal.4th 19, 30-31) simply because Defendant filed an answer. Indeed, Defendant’s answer includes a ninth affirmative defense that the issues are subject to arbitration. Defendant did not file a cross-complaint in this action, and it filed this motion without substantial delay.

Plaintiff is therefore ordered to submit all claims alleged in this Complaint to arbitration. The court will continue to retain jurisdiction in this action to enforce any arbitration award.

The court stays the instant litigation until arbitration is conducted in accordance with this order. This matter is set for an Arbitration Review Hearing / OSC re Dismissal on September 8, 2014 at 9:00 a.m. in Dept. C21.

Moving Party shall give notice.