Case Number: BC521467 Hearing Date: June 24, 2014 Dept: SEC

MADRIGAL v. MACY’S WEST STORES, INC.
CASE NO.: BC521467
HEARING: 06/24/14

#6
TENTATIVE ORDER

Defendant MACY’S WEST STORES, INC.’s motion to compel arbitration is
GRANTED. C.C.P. § 1281.2. The action is STAYED.

All parties are ORDERED to appear at an OSC re: Dismissal/Case Management Conference (post-arbitration) on November 20, 2014 at 8:30 a.m. in Department SE-F.

Defendant’s Request for Judicial Notice of various trial court orders which upheld the enforceability of defendant’s arbitration agreements with other employees is DENIED. Those rulings have no precedential effect and, insofar as they involve different factual circumstances, are not relevant here.

Plaintiff JENNIFER MADRIGAL filed a complaint alleging wrongful termination, harassment, wage violations and several other related claims against her former employer, defendant Macy’s and against defendants Joseph Garcia and Julian Velasquez, who engaged in the alleged harassing conduct. Plaintiff was employed with defendant Macy’s on three separate occasions, but the alleged wrongful conduct arose during her employment after the November 2009 hire.

Defendant Macy’s seeks an order compelling plaintiff to arbitrate her claims pursuant to the agreement between the parties. Plaintiff contends that the agreement is not legally enforceable and subject to revocation. See, e.g. Armendariz v. Foundation Health (2000) 24 Cal.4th 83. (As an aside, the Court notes that Armendariz has been abrogated in part, as it relates to the right to a Berman hearing under the FAA and the Supreme Court’s holding in At &T Mobility LLC v. Conception (2011) 563 U.S.___, but remains citable for the issues presented herein). Specifically, plaintiff claims the agreement is unconscionable. Unconscionability has both procedural and substantive elements, which are addressed below. Id.; see also Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519.

Defendant Macy’s has implemented a “Solutions InSTORE Dispute Resolution Program,” referred to as its “SIS Program.” Decl. of Erin Coney (Director of Employee Relations). All new employees are given a brochure outlining the program and a plan document. Coney decl., Exh. A, B, G, H. Each new hire must complete various online forms, including those pertaining to the SIS Program. Decl. of Ragunathan Veeraraghavan (Director of Insite, Analytics and Operations). Defendant contends that plaintiff received that paperwork on the three separate occasions of her employment, and each time electronically signed an acknowledgment of such. Coney decl., Exh. D (7/22/2005), J (11/28/2009) and K (3/30/2010). Electronic signatures are given the same effect as an “ink and paper” signature. C.C. § 1633.7(a).

Plaintiff’s complaint alleges that she was hired in November 2009. Comp., ¶11. In her opposing declarations, she only acknowledges the November 2009 hiring. She states that during that process, she was forced to “click through” numerous documents without reading them and that she did not realize she was agreeing to arbitration. She also states that she “believes that [she] was not given the [SIS] acknowledgement or agreement.” Madrigal decl., ¶12. She states she was given pamphlets which discussed a “three-step process” without mention of arbitration. ¶14. Her supplemental declaration clarifies that she was never informed of the arbitration and waiver of jury trial, or of her right to opt out. Madrigal supp. decl., ¶3.

Plaintiff admits to signing the paperwork, but claims that she did not know what she was signing. A contracting party cannot avoid the enforceability of an agreement by failing to read its terms and then relying on his own lack of diligence as a defense. See Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667; McCauley v. Norlander (1992) 12 Cal.App.4th 1.

To the extent plaintiff argues she was not given the opportunity to read the agreement, defendant proffered evidence that, at least with respect to the 2010 paperwork, over 30 minutes elapsed between the execution of two separate documents. Veeraraghavan decl., ¶18, Exh. K. Plaintiff thus spent some time going through the process, as she was required to input detailed information in doing so. She admits that she was told the documents were available electronically, but states that she had no internet access. ¶13.

Plaintiff’s argument that she only recalls a “three-step” process and no opt-out provision is unpersuasive in light of the documentary evidence of the SIS Program paperwork applicable on each of plaintiff’s three separate hire dates. The four-step process is illustrated by graphics on page 1 or 2 of most of the brochures. The program consists of four steps to address an employee’s concerns, and if the first three (informal) steps to do not resolve the issue, step four is binding arbitration. As noted above, the program also contains a provision allowing the employee to opt-out of arbitration, by signing and returning a form within 30-days of the date of hire. Coney decl., ¶¶12-13, Exb, B (p.4), Exh. G, p.4).

Plaintiff has not established that the manner in which the agreement was signed was so on-sided so as to constitute procedural unconscionability.
See Ingle v. Circuit City Stores, Inc. (2003) 328 F.3d 1165. Unlike in Ingle, plaintiff was never presented with a “take it or leave it” ultimatum. Cf. Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064 (finding the terms of the agreement one-sided in favor of the employer and thus unenforceable). There is no indication that plaintiff’s signing the agreement was a condition of employment.

With respect to substantive unconscionability, plaintiff contends the agreement is so one-sided such that the terms are not within the reasonable expectation of the employee and are unduly oppressive. Armendariz, supra.

The agreement provides that plaintiff is entitled to her employment file and that each side is entitled up to 20 interrogatories/requests for production and up to 3 depositions, unless the arbitrator allows for additional discovery. Motion, Exh. A, p. 10-11. Plaintiff contends that provision unfairly disfavors the employee. See Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702. Both Fitz and Martinez v. Master Protection Corp. (2004) 118 Cal.App.4th 107, relied on by plaintiff, involved much narrower discovery. Moreover, the agreement allows for additional discovery at the discretion of the arbitrator upon the showing of a “substantial need.” Plaintiff’s argument that the amount of discovery allowed will not be enough is somewhat speculative and, in light of an available remedy at arbitration, is not persuasive ground on which to invalidate the clause.

Plaintiff also argues that the agreement’s application of federal rules of discovery and evidence, and the lack of requirement of factual findings by the arbitrator, render the agreement unenforceable. The agreement states that the arbitrator must provide “a written decision specifying appropriate remedies, if any.” Exh. A, p.16. The provision does not preclude written findings of fact and thus “must be interpreted to provide for such findings.” Armendariz, 21 Cal 4th at 107.

Defendant notes that the use of federal rules is permissive, but not mandatory under the agreement. Exh. A, p. 11, 13. In any event, plaintiff proffers no authority that the application of federal procedural rules is improper.

Similarly, plaintiff has not persuaded the Court that the confidentiality provision is unfair. A confidentiality clause is not per se unconscionable. Davis v. O’Melveny & Meyers (9th Cir. 2007) 485 F.3d 1066, 1079 (overruled on other grounds at 733 F.3d 928 (9th Cir. 2013). Plaintiff did not proffer any authority that the subject confidentiality provision, which provides for exceptions as required by state law, is substantively unconscionable.

Plaintiff argues that the individual defendants did not sign the arbitration agreement and thus cannot be bound by it. See City of Contra Costa v. Kaiser Foundation Health Plan, Inc. (1996) 47 Cal.App4th 237. The agreement provides that plaintiff be compelled to arbitrate claims against defendant’s employees. Exh. A, p.6. Defendants here are represented by separate counsel, and their attorney (Lawrence Song, Esq.) was served with the motion. No opposition was filed and thus the court can assume they are amenable to arbitration. To the extent plaintiff acknowledges the claims against defendants Garcia and Velasquez are not “connected with any employment agreement,” if those defendants object to arbitration, the matter may be stayed as to them pending the outcome of arbitration of the employment related claims. C.C.P. § 1281.2.

Finally, plaintiff argues that defendant waived the right to arbitrate. C.C.P. § 1281.2(a). The action was filed in September 2013 in the Central District court. Defendant was served in October 2013 and filed the subject petition on February 14, 2014. Although plaintiff has served discovery, defendant took no advantage of the discovery procedures nor took any other action inconsistent with arbitration. It alleged that the claims were subject to arbitration as an affirmative defense in its October 2013 answer. Delay alone is insufficient to establish waiver. See Gloster v. Sonic Automotive, Inc. (2014) 226 Cal.App.4th 438. Plaintiff has not shown that she has been deprived of a speedy resolution of her claims. Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436.

For the reasons set forth above, the Court finds that defendant has met its burden of establishing a valid agreement to arbitrate and that plaintiff failed to prove a defense. Accordingly, the motion to compel this matter into arbitration is granted.