2013-00156736-CU-OE

Kati McDonald vs. Strategic Restaurants Acquisition Co

Nature of Proceeding: Petition to Compel Arbitration and Strike Class Action Allegations

Filed By: Dion, Paul J.

*** If oral argument is requested, the parties are directed to notify the clerk and
opposing counsel at the time of the request which issues will be addressed at
the hearing. Counsel are reminded that pursuant to Local Rules, only limited
oral argument is permitted on law and motion matters. ***

Defendants’ petition to compel arbitration of plaintiff’s individual claims and to strike
class allegations or alternatively, to consolidate the present action with related
arbitration proceedings now pending, is GRANTED, as follows.

Moving counsel is admonished because the notice of hearing does not provide notice
of the Court’s tentative ruling system, as required by Local Rule 1.06(D). Moving
counsel is directed to contact opposing counsel and advise him/her of Local Rule 1.06
and the Court’s tentative ruling procedure and the manner to request a hearing. If
moving counsel is unable to contact opposing counsel prior to hearing, moving
counsel is ordered to appear at the hearing in person or by telephone.

Plaintiff’s original complaint in this action asserts on behalf of herself and “all others
similarly situated” a multitude of statutory causes of action relating to her employment with defendants, including failure to provide meal and rest breaks; failure to pay hourly
wages, timely pay final wages and provide accurate wage statements; failure to
indemnify; and unfair competition. The Court notes that on 3/7/2014 plaintiff filed a
first amended complaint which purports to add a new cause of action for “Civil
Penalties” under Labor Code §2698 et seq.

Defendants assert that pursuant to plaintiff’s written employment agreement, all of her
claims in this action must be submitted to arbitration and because the applicable
arbitration provisions do not extend to class actions, the complaint’s class allegations
should be stricken pursuant to Kinecta Alternative Financial Solutions, Inc. v. Superior
Court (Malone) (2012) 205 Cal.App.4th 506 (Kinecta) and Stolt-Nielsen S.A. v.
AnimalFeeds Intl. Corp. (2010) 559 U.S. 662 (Stolt-Nielsen). Alternatively, should the
Court decline to strike plaintiff’s class allegations, defendants request that pursuant to
Code of Civil Procedure §1281.3 the arbitration of the present action be consolidated
with the pending arbitration proceedings in a similar action brought against defendants
by Noah Silver-Sky on behalf of himself and a purported class of others similarly
situated (Silver-Sky Action).

In opposition, plaintiff raises four (4) primary contentions: (1) The arbitration
agreement is unenforceable because it is both procedurally and substantively
unconscionable; (2) plaintiff’s claims under the Private Attorney General Act of 2004
(“PAGA”) found at Labor Code §2698 et seq. are not subject to compulsory arbitration;
(3) plaintiff’s wage-and-hour claims under the Labor Code are exempt from arbitration
pursuant to the Labor Code §229 and defendants failed to show that §229 is
preempted by the Federal Arbitration Act (“FAA”); (3) plaintiff’s claims under the
Private Attorney General Act of 2004 (“PAGA”) found at Labor Code §2698 et seq. are
not subject to compulsory arbitration; and (4) if this matter is ordered to arbitration, it
should proceed on a class-wide rather than an individual basis especially since the
arbitrator in the Silver-Sky Action has already concluded the arbitration in that case
may proceed on a class-wide basis but in the event the Court declines to compel class
arbitration, the arbitrator appointed in this case should determine whether individual or
class arbitration is appropriate. Based on these arguments, plaintiff maintains that
defendants’ motion must be denied in its entirety but in the event the Court is inclined
to compel arbitration, then plaintiff requests the PAGA claim be excluded while
arbitration of the other claims not only proceed on a class basis but also be
consolidated with the arbitration already commenced in the Silver-Sky Action.

At the outset, the Court finds that arbitration must be compelled where there is a valid,
binding arbitration agreement unless the opposing party proves the agreement is
unenforceable on unconscionability or other grounds. (See, e.g., Armendariz v.
Foundation Health (2000) 24 Cal.4th 83, 96-100, 114; Gatton v. T-Mobile USA (2007)
152 Cal.App.4th 571, 579.) As plaintiff effectively admits in her declaration that she
did sign the employment agreement containing the arbitration clause sought to be
enforced here, she bears to burden of proving this agreement is unenforceable.

Procedural and Substantive Unconscionability

Although plaintiff characterizes the arbitration agreement as procedurally
unconscionable, this Court disagrees. Plaintiff first contends that arbitration
agreement was oppressive because it was “not the product of real negotiation or
meaningful choice, as it was presented on a ‘take it or leave it’ basis” and cites
Paragraph 4 of her declaration as support. However, in reality, Paragraph 4 merely asserts in conclusory terms that she “was rushed to sign the Agreement…” This
statement fails to affirmatively or competently establish that the agreement was
actually condition of employment or not otherwise subject to negotiation; plaintiff could
not have taken more time to review the agreement or was refused her request for
more time to review it; or she did not understand at the time she was signing an
arbitration agreement or failed to comprehend its language. Plaintiff next argues that
under Samaniego v. Empire Today LLC (2012) 205 Cal.App.4th 138 defendants’
failure to provide her with a copy of the AAA’s Arbitration Rules is “significant” but this
argument is not supported by the evidence now before the Court since plaintiff’s own
declaration nowhere avers either that she was not actually provided the AAA rules or
even that she requested an opportunity to review the rules before signing the
agreement. Regardless, Samaniego does not hold that the failure to provide the
arbitration rules, without more, effectively precludes as a matter of law enforcement of
an arbitration agreement. Instead, Samaniego merely affirmed the trial court’s
decision to deny an employer’s motion to compel arbitration given the inconspicuous
arbitration clause, the lack of a Spanish translation, the failure to provide the arbitration
rules and multiple one-sided substantive provisions, all of which supported a finding of
unconscionability. (Samaniego, at 1143-1148.)

With respect to substantive unconscionability, plaintiff insists that the arbitration clause
at issue here violates Armendariz because it (1) requires plaintiff to pay a $150
administrative fee for arbitration, (2) provides only a limited pool of arbitrators, thereby
increasing of the risk of bias in favor of the employer as a “repeat customer,” (3) fails to
provide adequate discovery, and (4) fails to provide for the same relief and remedies
afforded in Court. The present record is, however, insufficient to establish any
actionable substantive unconscionability. The $150 administrative fee does not offend
the standards in Armendariz because this Supreme Court decision merely prohibits
shifting “unreasonable costs or…fees or expenses as a condition…arbitration forum” (
Armendariz , at 102 (emphasis added)) and $150 is, on its face, not unreasonable,
being far less than the fee for filing an unlimited jurisdiction action in California.
Likewise, plaintiff’s objection to the limited pool of potential arbitrators is without merit
because Armendariz merely requires “neutral arbitrators” (Id.) and there is no evidence
before the Court which shows that any of AAA’s arbitrators is or appears to be biased
in favor of defendants or any other “repeat customer.” Regardless, under the AAA
Rules, both parties are involved in selecting the arbitrator(s) and as such, plaintiff’s
vague claim of a “risk of bias” is entirely speculative.

While plaintiff suggests not only that the arbitration clause “provides for no discovery”
whatsoever but also that permissible discovery is “at the whim” of the arbitrator
(Oppos., p.9:24; p.10:4-6), the reality is that the AAA Rules state in pertinent part:

“9. Discovery
The arbitrator shall have the authority to order such discovery, by way of
deposition, interrogatory, document production, or otherwise, as the arbitrator
considers necessary to a full and fair exploration of the issues in dispute,
consistent with the expedited nature of arbitration.” (Emphasis added.)

This provision plainly contradicts plaintiff’s misleading suggestions and demonstrates
compliance with Armendariz , which only requires “more than minimal discovery.” (
Armendariz , at 102.) Moreover, the above-cited provision satisfies this Court that
neither party will be precluded from all appropriate and reasonably necessary
discovery.
Plaintiff’s final point on the issue of substantive unconscionability, that the agreement
does not provide for the same relief and remedies as could be granted in a court
proceeding, is not entirely clear and spans only eleven (11) lines but starts by vaguely
asserting, “The agreement failed to carve out the non-waivable statutory claims under
Labor Code Section 229.” (Oppos., p.7:23-24.) Plaintiff also appears to argue that
because the parties’ agreement does not explicitly mention arbitration of statutory
claims or even identify any particular statutes, but instead merely refers to “any
dispute, claim or controversy relating to employment” being subject to arbitration, it
would be improper under Hoover v. American Life Insurance Co. (2012) 206
Cal.App.4th 1193 to compel arbitration of the Labor Code violations asserted in the
present action. (Id., at p.7:24-p.8:6.) However, the opposition misses the mark in
several respects. Plaintiff fails to cite any support for her claim that the prospective
arbitration would limit in any way the relief or remedies which she might obtain in court
and in fact, directly contrary plaintiff’s argument, the AAA Rules governing arbitration
explicitly provide, “The arbitrator may grant any remedy or relief that would have been
available to the parties had the matter been heard in court including awards of
attorney’s fees and costs, in accordance with applicable law.” (AAA Rule 39.d.
(emphasis added).)

While plaintiff may be correct that her Labor Code claims are “non-waivable,” this does
not mean such claims are non-arbitrable especially where, as here, arbitration affords
all remedies which could otherwise be secured through court proceedings. (See, e.g.,
Armendariz , at 98-102.) Regardless, plaintiff’s own opposition concedes elsewhere
that statutory claims, including those under the Labor Code, may in certain
circumstances be compelled to arbitration. (Oppos., p.3:1-4; p.4:1-2.) It is also worth
noting here that the opposition’s reliance on Lane v. Francis Capital Management LLC
appears premature since this 3/11/2014 decision is not yet final but even if it were, it
does not assist plaintiff because in Lane, the Court of Appeal directed the trial court to
compel arbitration on all but one of the plaintiff’s employment-related claims, including
several based on the alleged violation of Labor Code provisions. More specifically, the
Second District concluded the plaintiff’s causes of action for wrongful termination;
breach of oral contract; unpaid overtime wages (Labor Code §510); unpaid meal
period wages (Labor Code §§226.7, 512); waiting time penalties (Labor Code §§201-
203); itemized wage statement violations (Labor Code §226); and unfair competition
(Bus. & Prof. Code §17200 et seq.) did not fall within the purview of Labor Code
§229’s exclusion from arbitration those claims for “the collection of due and unpaid
wages.”

The Hoover decision on which the opposition seems to primarily rely poses no
obstacle to arbitration in this case. In Hoover, the plaintiff alleged violations of various
Labor Code sections and the defendant sought to compel arbitration pursuant to the
“agent contract” which plaintiff signed as well as a separate collective bargaining
agreement (“CBA”). In denying arbitration, the Fourth District Court of Appeal found
that (1) the “agent contract” merely provided for the arbitration of “any dispute or
disagreement arising out of or relating to this contract” and of “all disputes, claims,
questions, and controversies of any kind or nature arising out of or relating to this
contract” and (2) the CBA nowhere provided for the resolution of statutory rights
violations through arbitration. (Hoover, at 1208 (emphasis added).) To be clear, it was
readily apparent that plaintiff Hoover’s Labor Code claims did not arise from or
otherwise seek to enforce compliance with either the “agent contract” or the CBA and
thus, the Court of Appeal correctly found the plaintiff never agreed to arbitrate such
claims. (Id., at 1209.)

In contrast, the employment agreement in the present case includes the following
language in Paragraph 4:

“Arbitration of all Employment Disputes. Both the Company and I agree that
if there is any dispute between the Company and me related to my employment
or the termination of my employment including, without limitation, any claim of
harassment, discrimination or retaliation (whether statutory or at common law),
then the dispute shall be resolved in accordance with the Company’s Arbitration
Policy.” (Emphasis added.)

Additionally, the arbitration agreement itself states in the opening paragraph:

“In order to encourage the speedy, cost-effective resolution of any disputes
between the Company and its employees concerning any of the terms,
conditions or benefits of employment, including disputes arising from
termination of the employment relationship, arbitration shall be the exclusive
remedy for any such disputes. Arbitration supplants, replaces and waives any
right that the employee or the Company may have to pursue any dispute, claim
or controversy relating to employment with the Company, or the termination of
employment from the Company (including claims for employment discrimination
and harassment), in any court, agency, tribunal or other forum, including a civil
action before any jury. This agreement to arbitrate includes, without limitation,
employment-related claims against both the Company … [N]or is this
agreement intended to provide for arbitration of (i) claims for worker’s
compensation benefits, or (ii) administrative claims for wage and hour
disputes.” (Emphasis added.)

Based on the above-cited broad and (virtually) all-inclusive arbitration language,
Hoover is factually distinguishable and is therefore not dispositive of the present
petition. Coincidentally, in Lane the Second District declined to follow Hoover on
essentially the same grounds and this Court notes that the opposition papers nowhere
demonstrate plaintiff in this case, in signing the employment agreement and the
arbitration agreement, never intended to waive her right to pursue any statutory claims
in a court of law.

Finally, as highlighted in Lane, the Hoover decision remains unpersuasive for still other
reasons. First, as alluded to above, Labor Code §229 does not apply to all statutory
wage and hour claims. Second, Hoover’s broad presumption against the arbitration of
statutory labor claims conflicts with Armendariz , where this state’s Supreme Court held
that under the California Arbitration Act an arbitration agreement could encompass all
statutory employment claims not expressly prohibited by the Legislature. (Armendariz ,
at 98.) Third, the suggestion that an arbitration clause must specifically identify the
Labor Code provisions in order to compel arbitration of those statutory labor claims is
not supported by California law. The only requirement is that the language clearly
evidence the parties’ intent to arbitrate even statutory claims. (See, e.g., Spellman v.
Securities Annuities & Insurance Services, Inc. (1992) 8 Cal.App.4th 452, 463.) For all
the foregoing reasons, plaintiff has failed to establish any procedural or substantive
unconscionability both of which are required in order to potentially justify a finding that
the arbitration agreement at issue in the case at bar is unenforceable.
Plaintiff’s PAGA Cause of Action

In this part of the opposition, plaintiff contends that pursuant to current “California law”
th
her 8 cause of action for “civil penalties” under PAGA (Labor Code §2698 et seq.) is
exempt from arbitration because there is no “express agreement” to arbitrate such
claims. (Oppos., p.10:13-17.) Somewhat confusingly, the only two authorities cited for
this proposition are two United States Supreme Court decisions (Id., at p.10:16-17) but
neither supports plaintiff’s contention. In the first cited decision, Stolt-Nielsen, the
nation’s High Court reviewed a federal case arising in New York State (and implicating
New York along with general maritime law) regarding whether an arbitration panel’s
imposing “class” arbitration on parties whose arbitration clauses are “silent” on that
issue is consistent with the FAA, ultimately holding that it was not. (Stolt-Nielsen, at
666, 671.) In AT&T Mobility LLC v. Concepcion (2010) 563 U.S. ___ (131 S.Ct. 1740),
the Concepcions had a cellular telephone contract with AT&T which provided for
arbitration of all disputes but did not permit class-wide arbitration of claims against
AT&T and the High Court found that a California rule deeming unconscionable and
unenforceable class-action waivers in consumer contracts was pre-empted by the
FAA. (AT&T Mobility , at 1744, 1753.) Neither decision appears to address much less
bear out plaintiff’s claim that her PAGA cause of action is exempt from arbitration and
likewise, the opposition’s request for the Court deny arbitration of all causes of action
pursuant to Code of Civil Procedure §1281.2(c) [“possibility of conflicting rulings on a
common issue of law or fact”] also lacks merit. (Oppos., p.10:18-20.)

Plaintiff next insists that arbitration of her PAGA claims must under Brown v. Ralphs
Grocery Co. (2011) 197 Cal.App.4th 489 be denied since the arbitration agreement in
this case is “silent” as to PAGA claims. However, upon closer review, Brown does not
support plaintiff’s assertion. Plaintiff Brown brought a “class action” and
“representative action” under PAGA against her employers for violations of the Labor
Code; the employer defendants appealed the trial court’s order denying their petition to
compel arbitration of plaintiff’s individual causes of action pursuant to her employment
agreement. (Brown, at 494.) The Second District Court of Appeal held (1) the trial
court erred in ruling that the “class action waiver” in plaintiff’s employment agreement
was unenforceable because the ruling was not supported by “substantial evidence”
and (2) AT&T Mobility (California law invalidating “class action waivers” in consumer
arbitration agreements is preempted by the FAA) does not apply to “representative
actions” under PAGA, so the trial court was correct in ruling the waiver of plaintiff’s
right to pursue a “representative action” under PAGA was not enforceable under
California law. (Id.) In Footnote 2, the Court of Appeal explained that the “class action
waiver” at issue purported to preclude plaintiff Brown from pursuing a class action in
any forum, not only court but also at arbitration. (Id., at 494, fn.2.) Similarly, the
employment agreement containing the arbitration clause apparently sought to preclude
plaintiff Brown from bringing a PAGA claim in any forum. (Id., at 502, fn.7 [“The
agreement here can be read to preclude any action or arbitration, individual, class or
representative, brought as a private attorney general.” (Emphasis added.)]) The
agreement provided in pertinent part:

“[T]here is no right or authority for any Covered Disputes to be heard or
arbitrated on a class action basis, as a private attorney general, or on bases
involving claims or disputes brought in a representative capacity on behalf of
the general public, of other Ralphs [Grocery Company] employees (or any of
them), or of other persons alleged to be similarly situated. … [T]here are no
judge or jury trials and there are no class actions or Representative Actions permitted under this Arbitration Policy.” (Id., at 495 (emphasis added).)

While the Second District concluded the “representative actions” waiver in the
employment agreement was unenforceable even after the AT&T Mobility decision,
there is in the case at bar no language in plaintiff’s employment agreement which even
purports to preclude her from asserting both in court and at arbitration any PAGA or
other “representative action” on behalf of others. Accordingly, Brown does not stand
for the proposition that the PAGA claims in this case are per se exempt from arbitration
and in fact, Brown even conceded that PAGA claims may well be subject to arbitration.
(Id., at 503 [“And, even if a PAGA claim is subject to arbitration, it would not have the
attributes of a class action that the AT&T [Mobility] case said conflicted with
arbitration…”].) Regardless, since Brown several courts in this state have held that
PAGA claims are amenable to compulsory arbitration at least to the extent a plaintiff is
asserting an individual claim which is otherwise governed by an arbitration provision.
(See, e.g. Quevedo v. Macy’s Inc. (2011 C.D. Cal) 798 F.Supp.2d 1122, 1141;
Grabowski v. C.H. Robinson Co. (2011 S.D. Cal) 817 F.Supp.2d 1159, 1181; Luchini
v. Carmax, Inc. (2012 E.D. Cal) 2012 U.S. Distr. Lexis 126230, 20-23.)

Because plaintiff has failed to provide valid authority for her assertion that a PAGA
claim is exempt from arbitration and because defendants have cited authority which
affirmatively indicates that a PAGA claim is subject to compulsory arbitration pursuant
to the parties’ agreement, this Court holds that plaintiff’s objection to arbitrating her
PAGA claim is without merit.

Labor Code §229’s Exemption from Arbitration and Federal Preemption

The opposition maintains that all of plaintiff’s wage-and-hour claims based on the
alleged violation of the Labor Code are exempt from arbitration pursuant to the
provisions of Labor Code §229 and further that defendants have failed to show that
§229 is preempted by the FAA. Labor Code §229 provides in pertinent part:

“Actions to enforce the provisions of this article for the collection of due and
unpaid wages claimed by an individual may be maintained without regard to the
existence of any private agreement to arbitrate. …” (Emphasis added.)

In short, plaintiff argues that because her claims under Labor Code §§201-204, 212,
223, 226(a) and 226.7 are all found in the same article (Article 1) of the Labor Code as
§229, then all of these claims are pursuant to §229 categorically exempt from
arbitration. In reality, as explained above, plaintiff’s assertion runs counter to Lane v.
Francis Capital Management LLC, which the opposition specifically discusses.
(Oppos., pp.2-3.) In Lane, the Court of Appeal held that the causes of action for
unpaid overtime wages (Labor Code §510); unpaid meal period wages (Labor Code
§§226.7, 512); waiting time penalties (Labor Code §§201-203); itemized wage
statement violations (Labor Code §226); as well as for unfair competition (Bus. & Prof.
Code §17200 et seq.) were not exempt from arbitration pursuant to Labor Code §229
and that only the cause of action “to collect unpaid wages due Lane for his labor” was
excluded from arbitration under §229 (unless preempted by the FAA).

The opposition also relies in part on the 2012 decision in Hoover v. American Life
Insurance Co. in an attempt to show plaintiff’s Labor Code claims are not amenable to
arbitration given Labor Code §229’s plain language. However, as discussed above,
the Hoover decision is factually distinguishable from the present case as the scope of
the arbitration agreement in Hoover was significantly more narrow than in the present
case and did not even provide for the arbitration of any or all disputes arising out of
Hoover’s “employment.” Additionally, the Lane Court found that Hoover’s broad
presumption against the arbitration of statutory labor claims actually conflicts with this
state’s Supreme Court precedent (Armendariz , at 98 [under California Arbitration Act,
arbitration agreement may encompass statutory employment claims not expressly
prohibited]) and that Hoover’s suggestion an arbitration clause must specifically
identify the statutory provisions in order to compel arbitration lacks support under
California law.

But even if plaintiff were correct that all of the claims based on alleged violations of the
Labor Code were exempt from arbitration pursuant to Labor Code §229, she concedes
that the FAA may still preempt §229 and require her to arbitrate all of such claims.
Thus, this Court must now determine whether the FAA preempts the application of
§229 in this case. The opposition generally argues that defendants have failed to
carry their burden of showing their “activities constitute interstate commerce” since
“[their] self-serving exhibits are devoid of any admissible evidence of interstate
commerce…” and more specifically, “there is nothing to support that Plaintiff’s work as
a shift manager at a restaurant was involved with or had any impact on interstate
commerce.” (Oppos., p.4:1-15.) Title 9 U.S.C. §2 provides for the enforcement of an
arbitration clause in any contract “evidencing a transaction involving commerce” and
under established precedent, the phrase “evidencing a transaction” means only that
the transaction must turn out to involve interstate commerce regardless of whether the
parties intended any interstate activity. (Allied-Bruce Terminix Cos., Inc. v. Dobson
(1995) 513 U.S. 265, 277.) Decisional law analyzing §2 of the FAA demonstrates that
standard of “involving interstate commerce” is to be broadly construed. (See, e.g.,
Allied-Bruce Terminix Cos., at 282; Perry v. Thomas (1987) 482 U.S. 483, 490;
Shepard v. Edward Mackay Enterprises, Inc. (2007) 148 Cal.App.4th 1092, 1096-
1101; see also, Knight, Chernick et al., Cal. Prac. Guide: Alternative Dispute
Resolution (The Rutter Group 2013), Ch.5:52 et seq.)

Here, defendants have submitted a declaration by Mr. Grossman who avers not only
that he has been defendants’ Chief Financial Officer since 2005 but also that (1)
defendants is a franchisee of Burger King Corporation (“BKC”), a Florida corporation
headquartered in Florida; (2) defendants operate Burger King restaurants in several
states including Alabama, Arkansas, California, Florida, Kansas, Missouri, Louisiana
and Mississippi; (3) defendants send monthly royalties to BKC in Florida in exchange
for the use of Burger King trademarks and service marks; (4) defendants’ businesses
operate under a uniform system established by BKC which governs the quality and
uniformity of products and services; restaurant operating standards, specifications and
procedures; restaurant design, decor, equipment system and colors; employee uniform
standards; and signage and advertising; (5) operating supplies, uniforms, computer
supplies and equipment used in the operation of defendants’ franchise locations come
from outside California; and (6) defendants’ employees regularly travel from and to
California for the purposes of management meetings, conferences, participation in
BKC and National Franchise Board and Committees and inspection of stores. The
Court finds that this uncontradicted evidence is sufficient to establish the existence of a
contract which involves interstate commerce, thereby triggering the FAA’s preemption
of Labor Code §229.

Individual v. Class-Wide Arbitration The final contention of the opposition is that if the Court compels arbitration of this
matter, it should be a class-wide arbitration rather than just plaintiff’s individual claims
and plaintiff adds that the arbitrator in the Silver-Sky Action has already found those
arbitration proceedings may be on a class-wide basis. In short, the opposition asserts
that because plaintiff’s arbitration agreement is broadly worded to encompass nearly
without limitation all claims related to her employment, it necessarily permits class-
wide arbitration of those employment claims and thus, plaintiff argues that defendants’
reliance on Kinecta is misplaced. (Oppos., p.12:17-p.13:8.) However, plaintiff’s
contentions on this final issue are unavailing. Although the arbitration agreement at
bar is indeed broad and effectively requires arbitration of virtually all employment-
related claims brought by plaintiff, there is no support for the suggestion that class-
wide arbitration is permitted. As pointed out in the reply, Paragraph 4 of plaintiff’s
employment agreement expressly provides in pertinent part:

“Arbitration of all Employment Disputes. Both the Company and I agree that
if there is any dispute between the Company and me related to my employment
or the termination of my employment including, without limitation, any claim of
harassment, discrimination or retaliation (whether statutory or at common law),
then the dispute shall be resolved in accordance with the Company’s Arbitration
Policy.” (Emphasis added.)

The language highlighted above leaves little question that the parties simply did not
agree to any class-wide arbitration of employment claims. As such, this Court is
compelled to follow the Kinecta decision which inter alia stated:

“The arbitration provision in this case expressly limited arbitration to the
arbitration of disputes between [plaintiff] Malone and [defendant] Kinecta. The
arbitration agreement made no reference to, and did not authorize, class
arbitration of disputes. Thus the parties did not agree to authorize class
arbitration in their arbitration agreement, and the order denying Kinecta’s motion
to dismiss class claims must be reversed.” (Kinecta, at 510 (emphasis added).)

Based on the above-cited language of the employment agreement and the binding
precedent of Kinecta, plaintiff’s claims in the present case must be arbitrated on an
individual basis rather than the class-wide basis proposed by the opposition and
further, the class allegations found in plaintiff’s complaint are hereby
stricken/dismissed. Consequently, this Court need not address plaintiff’s alternative
argument that the arbitrator appointed in this case should be left to determine whether
individual or class arbitration is appropriate here.

Conclusion

Based on the foregoing, this Court holds that plaintiff has failed to carry her burden of
proving both procedural unconscionability and substantive unconscionability which
justifies judicial nullification of the arbitration agreement at issue here and further that
plaintiff has failed to demonstrate why all of her individual claims should not be
resolved pursuant to the arbitration agreement. Accordingly, defendants’ petition to
compel arbitration is granted and the motion to strike the class action allegations which
are not subject to arbitration is also granted.

This minute order is effective immediately. Pursuant to CRC Rule 3.1312, defendants
to prepare formal order consistent with the foregoing.