Ruling

The motion by defendant Maxwell Petersen Associates dba MPA Media (erroneously sued as MPA Media) to compel arbitration and to stay this action pending completion of arbitration is GRANTED.

Reason

It is evident to the court that cornerstone of this dispute is whether the arbitration provisions are procedurally and substantively unconscionable to preclude enforcement? As explained below the court finds that it is not substantively unconscionable.

The General standard for Arbitration

As a threshold Defendant has the burden to prove by a preponderance of the evidence the existence of a written arbitration agreement and that the dispute in question is covered by the agreement and that a party thereto refuses to arbitrate. CCP § 1281.2. A review of the written papers and exhibits thereto confirm that Defendant has met this burden. CRC 3.1330. Next Defendant must show that the arbitration agreement satisfies the requirements set forth in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 C4th 83, in which the Court held that causes of action under the California Fair Employment and Housing Act (“FEHA”) are arbitrable if the arbitration permits the employee to vindicate their statutory rights. There are five minimum requirements. The arbitration agreement is lawful if it:

(1) provides for neutral arbitrators;

(2) provides for more than minimal discovery;

(3) requires a written award;

(4) provides for all the types of relief that would otherwise be available in court, and

(5) does not require employees to pay either unreasonable costs or any arbitrator’s fees or expenses as a condition of access to the arbitration forum. (Id. at p. 102.) Employee may be required to pay reasonable costs of arbitration such as filing fees and other administrative expenses. (Id. at p. 108.) “[W]hen 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. This rule will ensure that employees bringing FEHA claims will not be deterred by costs greater than the usual costs incurred during litigation, costs that are essentially imposed on an employee by the employer.” (Id. at p. 110-111.)

Finally, the court must be guided by the principal that Public policy favors enforcement of arbitration agreements (Madden v. Kaiser Found. Hospitals, Inc. (1976) 17 Cal.3d 699, 706-707), and any doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of arbitration (Cione v. Foresters Equity Service (1997) 58 Cal.App.4th 625, 642.)

Here, plaintiff does not contend that Items 1, 2, 3 and 5 are not satisfied.

That leaves Item 4. The Arbitration Agreement provides:

(MP Ex. A at page 1.) Further, “either party may file a request of a court of competent jurisdiction for equitable relief, including but not limited to injunctive relief, pending resolution of any dispute through the arbitration procedure set forth herein.” (MP Ex. A at page 2.) Thus, the Arbitration Agreement provides for all types of relief that would be available in court. Item 4 is satisfied. Indeed, the court would point out that the Arbitration Agreement clearly covers the causes of action raised in plaintiff’s complaint, which are all related to her employment and the termination of her employment. Finally, defendant has submitted evidence unrefuted that plaintiff refuses to arbitrate.

Dec of Simpson at ¶ 2-6; MP Ex. C-F.) In sum defendant has met its burden. The burden shifts to plaintiff to establish that grounds exist to deny arbitration. The grounds that plaintiff relies on is that that the Arbitration provision is procedurally and substantively unconscionable.

Is the arbitration provision procedurally unconscionable?

“The procedural element focuses on ‘oppression’ or ‘surprise.’ Where the parties to a contract have unequal bargaining power and the contract is not the result of real negotiation or meaningful choice, it is oppressive. ‘Surprise’ is defined as ‘the extent to which the supposedly agreed-upon terms of the bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputed terms.’ The procedural element of an unconscionable contract generally takes the form of a contract of adhesion. An adhesive contract is defined as ‘a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’” “Of course, simply because a provision within a contract of adhesion is not read or understood by the non-drafting party does not justify a refusal to enforce it. It must be shown to be also substantively unreasonable.” (Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 87-88 (internal citations omitted).) So a failure to read or understand the arbitration clause is generally no defense. Madden v. Kaiser Found. Hosps. (1976) 17 C3d 699, 710.) Bolanos v. Khalatian (1991) 231 CA3d 1586, 1590.) Thus, finding adhesion is not a “prerequisite for a finding of unconscionability.” (Harper v. Ultimo (2003) 113 CA4th 1402, 1408–1410.) Here, plaintiff claims that the that the arbitration provision is oppressive per se because it was a necessary condition of her employment. Plaintiff offers her testimony that she was required to sign the papers that were given to her when she began working for defendant, including the Arbitration Agreement, in order to begin her employment with defendant, and that she was not given an opportunity to negotiation the terms of any of MPA’s policies or procedures, including the Dispute Resolution Policy. (Dec of Culligan at ¶ 3-4.) Moreover, she pleads that that she was not given time to review the arbitration policy or to consult with counsel, and that the Arbitration Agreement was not explained to her (Id. at ¶ 3-4.) She was simply expected to sign acknowledgment of it and return it. (Id at ¶ 3.) Defendant fails to counter this evidence. For example, there is nothing in the declaration from defendant (Dec of Auger) to indicate that the Agreement to Arbitration was voluntary and not a condition of employment. Nor, is there evidence that in the arbitration agreement or the Acknowledgements that plaintiff could reject the arbitration requirement or had any right to negotiate the Arbitration Agreement. Clearly plaintiff was offered an Arbitration Agreement was that can best be described as “take it or leave it”. Plaintiff has established procedural unconscionability. But to deny enforcement plaintiff must establish substantive unconscionability.

Is the arbitration provision substantively unconscionable?

“Substantive unconscionability focuses on whether the provision is overly harsh or one-sided and is shown if the disputed provision of the contract falls outside the ‘reasonable expectations’ of the nondrafting party or is ‘unduly oppressive.’ Some courts have imposed a higher standard: the terms must be ‘so one-sided as to shock the conscience.’ Where a party with superior bargaining power has imposed contractual terms on another, courts must carefully assess claims that one or more of these provisions are one-sided and unreasonable.” (Gutierrez v. Autowest, Inc., supra, 114 Cal.App.4th at 88 (internal citations omitted.) Here, plaintiff insists that the court should find substantive unconscionability because there is a lack of mutuality. The court does not agree.

First, although page 2 of the Agreement provides a special notification to the employee that he/she is waiving their right to a jury trial, the Agreement specifically provides for binding arbitration by both parties to the Agreement as the exclusive forum for resolving all disputes arising out of or involving the Employee’s employment with the Company or the termination of that employment. (MP Ex. A at pages 1-2.) Clearly, both parties have waived their right to a jury trial by agreeing to binding arbitration as the exclusive forum for resolution of their disputes. Second, The arbitration agreement provides:

“… either party may file a request of a court of competent jurisdiction for equitable relief, including but not limited to injunctive relief, pending resolution of any dispute through the arbitration procedure set forth herein.” (MP Ex. A at page 2.)

This provision specifically allows either party to file a request for injunctive relief and in a previous provision the arbitrator is authorized to issue an injunction, which is not limited to any particular party. Third, plaintiff argues that the NDA creates a hole in the coverage of the Arbitration Agreement that favors the employer because it applies only to claims that defendant is likely to bring against its’ employees. The document in question is titled “MPA Media Confidentiality, Nondisclosure, Copyright, Confirmation of Invention Assignment, and Invention Assignment Agreement.” The provision relied upon by plaintiff provides:

In reviewing this provision the court points out that

the provision cited applies only to claims sought to enforce or interpret the terms of this Agreement, which is the “MPA Media Confidentiality, Nondisclosure, Copyright, Confirmation of Invention Assignment, and Invention Assignment Agreement.” Moreover, plaintiff has not shown that the causes of action alleged in the Complaint deal with the “MPA Media Confidentiality, Nondisclosure, Copyright, Confirmation of Invention Assignment, and Invention Assignment Agreement.” Additionally , while plaintiff urges that this provision applies only to claims that the employer is likely to bring against an employee, plaintiff fails to state why this is so. For example, an employee might want to bring an action to interpret the NDA agreement to understand the scope of the non-compete agreement, or to determine whether a certain invention belongs to the Company or to plaintiff. In effect this provision does not specifically limit court actions to the employer. Finally, The Arbitration Agreement was signed by plaintiff on 10/29/08 and by defendant MBA on 11/29/09. (MP Ex. A.) The NDA Agreement was signed by plaintiff on 10/2/09 (RP Ex. B.). The Receipt and Acknowledgements of the Arbitration Agreement were signed by plaintiff on 10/29/09, 12/14/2010, 3/14/2011, 12/10/2012, and 1/23/2013. (MP Ex. B.)

Ex. A at page 4, Section V. at ¶ D.) This time line and the provisions of the NDA negate plaintiff claim that the NDA is limited to employer claims.

In sum, plaintiff fails to show substantive un-conscionability which requires enforcement of the agreement to arbitrate.