Case Number: BC521209 Hearing Date: May 13, 2014 Dept: 56

Case Name: Nahai v. University of Southern California, et al.
Case No.: BC521209
Motion: Motion to Compel Arbitration
Moving Party: Defendants
Responding Party: Plaintiff

Tentative Ruling: Motion is granted.

Plaintiff Gina Nahai filed this action against Defendants University of Southern California and Brighde Mullins arising out of her employment, alleging causes of action for (1) discrimination; (2) harassment; (3) retaliation; (4) failure to prevent discrimination, harassment, and retaliation; and (5) negligent hiring, retention, and supervision. Plaintiff has been employed by USC as a lecturer in the Masters of Professional Writing Program since 1999. She alleges that USC and Mullins (who is director of the program) have engaged in discriminatory and harassing conduct toward her from 2008 to the present.

Defendants move to compel arbitration of Plaintiff’s claims. The general standards which govern the motion are well settled: A petition to compel arbitration based on a written arbitration agreement must be granted unless grounds exist to revoke the agreement. CCP §1281 & §1281.2(b). The petitioner bears the burden of proving the existence of a valid arbitration agreement, and a party opposing the petition bears the burden of proving any fact necessary to its defense. E.g. Engalla v. Permanente Medical Group (2007) 15 Cal.4th 951, 972.

Arbitration Agreement –
In ruling on a motion to compel arbitration, a trial court must decide whether an enforceable arbitration agreement exists between the parties and whether the claims are within the scope of the agreement. Omar v. Ralphs Grocery (2004) 118 Cal.App.4th 955, 961. General principles of contract law determine whether the parties have entered into a binding agreement. Craig v. Brown & Root (2000) 84 Cal.App.4th 416, 420.

On 5/10/10 Plaintiff and USC entered into a faculty employment contract that specifically incorporated a signed arbitration agreement [Reynolds Decl., Ex 2 & 3]. The arbitration agreement broadly requires arbitration of all claims “that Employee may have against the University or any of its related entities, including but not limited to … officers, trustees, administrators, employees or agents … .” [Id, Ex 3]. The agreement specifically requires arbitration of the kind of employment claims alleged in this action [Id].

Before the 5/10/10 arbitration agreement, Plaintiff and USC entered into signed arbitration agreements containing substantially identical language in 2002, 2004, 2005, 2006, 2007 and 2009 [Id, Ex 1]. After the 5/10/10 arbitration agreement, Plaintiff accepted appointment letters in 2011, 2012 and 2013 which stated that “your last faculty contract remains unchanged and is incorporated by reference” [Id, Ex 4 – 6]. On 7/19/13 Plaintiff and USC entered into a faculty contract that specifically incorporated an arbitration agreement containing substantially identical language. Although Plaintiff signed the 7/19/13 agreement, she added a qualification that she did not intend for the arbitration clause to apply retroactively [Id, Ex 8].

Plaintiff admits that she has an obligation to arbitrate claims under the terms of the 5/10/10 arbitration agreement, but she contends that it only applied to the 2010 school term. Plaintiff also acknowledges the 7/19/13 arbitration agreement, but she contends that it does not apply retroactively. Plaintiff therefore contends there is a gap between the two agreements, which relieves her of any obligation to arbitrate the claims made in this case.

This argument has no merit. Considered together, the language of the offer letters, arbitration agreements, and reappointment letters establish that the arbitration agreement continued in force and covers the entire period of Plaintiff’s employment. “General principles of contract law determine whether the parties have entered a binding agreement to arbitrate. This means that a party’s acceptance of an agreement to arbitrate may be express . . . or implied-in-fact where, as here, the employee’s continued employment constitutes her acceptance of an agreement proposed by her employer.” Craig v. Brown & Root, supra 84 Cal.App.4th at 420. Defendants have met their burden of proving the existence of a valid arbitration agreement.

Defendants have also established that the arbitration agreement extends to Mullins as well as USC. The agreement applies to all claims against “officers, trustees, administrators, employees, or agents” and Plaintiff has made claims against Mullins arising from his work as director of her program. The agreement to arbitrate therefore extends to Mullins. See Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 271-72; Dryer v Los Angeles Rams (1985) 40 Cal.3d 406, 418.

Defenses –
Plaintiff contends that the arbitration agreement is unconscionable, relying upon cases such as Armendariz v. Foundation Health (2000) 24 Cal.4th 83. Unconscionability has procedural and substantive elements, and both must be found for a court to invalidate an arbitration contract. 24 Cal.4th at 114.

Procedural unconscionability focuses on the elements of oppression (inequality of bargaining power) and surprise (the extent to which the terms are hidden). Armendariz, supra 24 Cal.4th at 114. Plaintiff argues that the arbitration agreement was presented to her on a “take it or leave it” basis, without the opportunity for meaningful negotiation. But her declaration presents no evidence on this subject or the circumstances surrounding the presentation or execution of the 5/10/10 arbitration agreement or other employment letters.

Plaintiff also argues that the arbitration agreement is procedurally unconscionable because it refers to AAA arbitration rules and procedures without attaching them to the agreement. While this has been found to be procedurally unconscionable in some circumstances, see Trivedi v. Curexo Technology (2010) 189 Cal.App.4th 387, 393, it is insufficient here. The AAA materials can be found on the internet, and Plaintiff is an accomplished academic and writer. Overall the arbitration agreement is stated in clear and understandable language, and Plaintiff has presented no evidence that she was surprised or confused by the terms. Plaintiff has not established procedural unconscionability.

Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create one-sided results. Armendariz, supra 24 Cal.4th at 114. Plaintiff argues that the arbitration agreement is substantively unconscionable because it does not provide for discovery. The agreement states that “The arbitrator shall afford the parties adequate discovery, including deposition discovery, taking into account their shared desire to have a fast, cost-effective dispute-resolution mechanism” and the AAA employment arbitration rules say much the same. This provides adequate discovery. See Armendariz, 24 Cal.4th at 104-6; Coast Plaza Doctors Hosp. v. Blue Cross of California (2000) 83 Cal.App.4th 677, 690.

Plaintiff also argues that the arbitration agreement is substantively unconscionable because it requires a written notice of the claim and gives Defendants a “free peek” at the substance of her claims. This is an odd argument in a case which has such a detailed complaint. In all events it has no merit. The arbitration agreement merely requires the party initiating arbitration to “identify and factually describe the nature of all claims asserted.” Plaintiff has not established substantive unconscionability.

Ruling –
The motion is granted, and arbitration is ordered for all claims alleged in the complaint against USC and Mullins. The action is stayed pending arbitration pursuant to CCP §1281.4.