30-13-670437

Motion to Compel Arbitration (Employment Contract)

Defendant’s Burden

On a motion to compel arbitration under CCP §1281 et seq, the moving party has the burden of demonstrating (1) an arbitration agreement covering the controversy, (2) a demand for arbitration consistent therewith, and (3) a refusal by the other party to arbitrate. Mansouri v. Superior Court (2010) 181 Cal.App.4th 633, 640; Brodke v. Alphatec Spine Inc. (2008) 160 Cal.App.4th 1569, 1575. The burden rests with the party seeking to compel arbitration to establish these three prerequisites by a preponderance of the evidence. Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972; Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1220-1221.

Here, defendant has met its initial burden by showing an arbitration agreement covering the controversy (See Independent Contractor Agreement ¶ 10(g)), a demand for arbitration consistent therewith (see Cottle Decl, ex. B), and a refusal by the other party to arbitrate (as evidenced by the opposition brief).

Plaintiff’s Burden: Unconscionability

Plaintiff contends that the arbitration agreement is unconscionable, and therefore unenforceable. Unconscionability is a question of law. Civil Code §1670.5; Parada v. Superior Court (2009) 176 Cal.App.4th 1554, 1567. Plaintiff has the burden of proof on the issue of unconscionability, which he must satisfy by a preponderance of the evidence. Chin v. Advanced Fresh Concepts Franchise Corp. (2011) 194 Cal.App.4th 704, 708; Arguelles-Romero v. Superior Court (2010) 184 Cal.App.4th 825, 836.

To find an arbitration agreement unconscionable, the party resisting arbitration bears the burden of establishing both procedural and substantive unconscionability. Stirlen v. Supercuts (1997) 51 Cal.App.4th 1519, 1530. Procedural unconscionability concerns the manner in which the contract was negotiated and the circumstances of the parties at that time; substantive unconscionability involves contract terms that are so one-sided as to shock the conscience or that impose harsh or unreasonable terms. Parada, 176 Cal.App.4th at 1570, 1573. However, because unconscionability must be measured in a sliding scale, the court’s task is not only to determine whether unconscionability exists, but more importantly, to what degree. Parada at 1569. 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.” Bruni v. Didion (2008) 160 Cal.App.4th 1272, 1282.

To determine procedural unconscionability, courts often employ one of two approaches:

(1) the common law approach under Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, which looks to whether the provision at issue is part of an adhesion contract; OR

(2) the UCC approach under Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, which focuses on two factors: oppression and surprise.

It does not matter which approach a court uses, as “both pathways should lead to the same result.” Parada at 1568.

Here, as with all cases involving pre-employment arbitration agreements, some degree of procedural unconscionability is present. The presumption was explained recently by the Court in Ajamian v. CantorCO2e, LP (2012) 203 Cal.App.4th 771 (at 796):

“The finding that the arbitration provision was part of a nonnegotiated employment agreement establishes, by itself, some degree of procedural unconscionability. It was an adhesion contract, because it was based on a standardized form, drafted and imposed by a party of superior bargaining strength … [however] where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low.”

In accord, Wisdom v. AccentCare, Inc. (2012) 202 Cal.App.4th 591, 597; Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 980-981; Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1471; Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 175.

Other aspects of procedural unconscionability are not present. The agreement itself is not unwieldy in terms of its length or complexity; there is no effort to bury arbitration in a prolix printed form with tiny font, or use overly lawyer-like terminology. See Samaniego v. Empire Today, LLC (2012) 205 Cal.App.4th 1138, 1145-1146; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1252-1253; Crippen v. Central Valley RV Outlet, Inc. (2004) 124 Cal.App.4th 1159, 1165; Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 89.

Therefore, procedural unconscionability remains low.

As for substantive unconscionability, in Armendariz v. Foundation Heath Psychcare Services, Inc. (2000) 24 Cal.4th 83, the California Supreme Court specified minimum requirements that a mandatory employment arbitration agreement must meet to avoid being found substantively unconscionable: (1) provides for neutral arbitrators; (2) provides for more than minimal discovery; (3) requires a written award; (4) provides for all types of relief that would be available in court; (5) does not require employees to pay the unique expenses of arbitration; and (6) a modicum of bilaterality. Id. at 102-103.

Plaintiff first contends that the arbitration agreement imposes fees upon him. “When an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court.” Armendariz, supra, 24 Cal.4th at 110-111; Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242, 1249; Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387, 394-395. Defendant ignores this contention, but the agreement is quite evidently silent on the matter. So long as defendant bears all of the arbitration costs, no unconscionability is shown on this issue.

Plaintiff next contends that the arbitration agreement bars plaintiff’s right to recover fees per Labor Code §218.5. Defendant (again) ignores this contention, but (again) the contract speaks for itself and says nothing of the sort. Plaintiff is presumably still entitled to recover fees the same here as in arbitration.

Plaintiff next contends that the arbitration agreement fails to provide for discovery, a neutral factfinder or a written award. Defendant (again) ignores this contention, but (again) the contract speaks for itself and says nothing of the sort. The agreement provides that one AAA arbitrator will be selected, and will apply California law. This makes him or her neutral per CCP §§ 1281.85-1281.91. The agreement is silent regarding discovery or a written opinion, which means these are implied to be adequate per CCP §§ 1282.2-1283.8.

Lastly, plaintiff contends that the agreement bans punitive damages. Defendant (again) ignores this contention, but (again) the contract speaks for itself and says nothing of the sort. By applying California law, the arbitrator is presumably empowered to award all appropriate damages.

Petition to compel arbitration GRANTED. Defendant shall bear all costs of the arbitration.

OSC re: selection of arbitrator set for 5-13-14 at 8:30 a.m. in Dept. C-20.