Case Number: 19STCV06998 Hearing Date: June 18, 2019 Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES – CENTRAL DISTRICT

PARIS PROVIDENCE, etc.,

Plaintiff,

vs.

STAMPS.COM, INC., etc., et al.,

Defendants.

CASE NO.: 19STCV06998

[TENTATIVE] ORDER RE:

DEFENDANT’S MOTION TO COMPEL ABRITRATION

Date: June 18, 2019

Time: 8:30 a.m.

Dept. 56

MOVING PARTY: Defendant Stamps.com, Inc.

RESPONDING PARTY: Plaintiff Paris Providence

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

This action arises from alleged wrongful actions against Plaintiff during her employment with Defendant. Plaintiff filed a complaint against Defendant alleging causes of action for: (1) negligent hiring; (2) sexual harassment; (3) failure to take steps necessary to prevent harassment; (4) retaliation for opposing sexual harassment; (5) disability discrimination; (6) failure to accommodate disability; (7) failure to engage in the interactive process; and (8) wrongful termination in violation of public policy.

Thereafter, Defendant filed a motion to compel arbitration and stay proceedings based on an arbitration agreement signed by Plaintiff that included an arbitration provision for all claims arising from her employment with Defendant.

Plaintiff opposes Defendant’s motion to compel arbitration on the grounds that: (1) the agreement is procedurally unconscionable; (2) the agreement is substantively unconscionable; (3) the unconscionable aspects of the agreement cannot be severed; (4) the FAA does not apply to the arbitration agreement; and (5) Defendant’s request for a stay is moot.

EVIDENTIARY OBJECTIONS

The Court rules as follows on Plaintiff’s objections to Defendant’s evidence in support of Defendant’s motion to compel arbitration:

OVERRULED: 1-8

DISCUSSION

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy.” (Code Civ. Proc. § 1281.2.) Under Section 1281.2(a) and 1281.2(b), parties will not be compelled to arbitrate if: (1) the party seeking compelling or arbitration has waived the right to arbitrate or (2) grounds for the arbitration agreement to be rescinded exist.

Initially, the Court will address Plaintiff’s argument that the arbitration agreement fails to identify which rules would govern the agreement. The Court finds Plaintiff’s argument misplaced. The arbitration agreement at issue indicates that the then applicable National Rules for the Resolution of Employment Disputes of the American Arbitration Association governs the arbitration agreement. (Wolpin Decl. at Exhibit A.) Defendant presents evidence that the Employment Arbitration Rules and Mediation Procedures for the American Arbitration Assocation (“AAA Rules”) are the renamed National Rules for the Resolution of Employment Disputes and are the controlling rules for arbitration of this action. (Wagner Decl., Exhibit D at 10.) Thus, for purposes of this ruling the Court will analyze the arbitration agreement pursuant to the AAA Rules. Nevertheless, the fact that the AAA does not publish the arbitration rules under the title referenced in the arbitration agreement at issue does insert an element of oppressiveness to the agreement. (Zullo v. Superior Court (2011) 197 Cal.App.4th 477, 486, fn.3.)

Issue No.1: Adhesion and Procedural Unconscionability

“The standard definition of a contract of adhesion is 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.” (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1533.) Adhesion is present where there is a lack of opportunity to negotiate. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 116.) “The finding that the arbitration provision was part of a nonnegotiated employment agreement establishes, by itself, some degree of procedural unconscionability.” (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 794.) “Where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be unenforceable unless the degree of substantive unconscionability is high.” (Id. at 796.) Nevertheless, actual surprise must be present in order for a court to find that a contract was one of adhesion. (Bruni v. Didion (2008) 160 Cal.App.4th 1272, 1293.)

The declaration of Sean Wolpin indicates that Plaintiff had to sign the arbitration agreement at issue in order to work for Defendant. (Wolpin Decl. at ¶ 11.) Moreover, the agreement states in all capital letters that it is an arbitration agreement. (Wolpin Decl. at Exhibit A.) Defendant presents evidence that Plaintiff completed her employment documents, which included the arbitration agreement at issue, and electronically executed the arbitration agreement. (Wolpin Decl. at ¶ 9.) Defendant presents evidence that Plaintiff had the opportunity to print the arbitration agreement and read it off-line. (Id. at ¶ 10.) Plaintiff presents no evidence that she did not sign the arbitration agreement or that she was surprised by its existence. Thus, Plaintiff presents no admissible evidence with respect to the oppressiveness issue.

While the Court finds this was a contract of adhesion, due to its ‘take it or leave it’ nature, the Court finds that it possesses a very low degree of procedural unconscionability.

Issue No. 2: Copy of the Rules

Plaintiff argues that she was not provided a copy of either set of arbitration rules and as such the agreement is procedurally unconscionable.

“Numerous cases have held that the failure to provide a copy of the arbitration rules to which the employee would be bound supported a finding of procedural unconscionability.” (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 244.) “[T]he failure to provide a copy of the governing rules contributes to the oppression because the employee is forced to go to another source to find the full import of what he or she is about to sign and must go to that effort prior to signing.” (Id. at 245.) “The level of oppression is increased when, as here, the employer not only fails to provide a copy of the governing rules, but also fails to clearly identify which rules govern so the employee could locate and review them.” (Id.)

The Court finds that Plaintiff presents no admissible evidence that she did not receive a copy of the rules, only mere argument. Plaintiff does not attach a declaration from either herself or from her counsel which indicates she did not receive a copy of the arbitration rules at issue. Thus, based on mere argument without accompanying supporting evidence, the Court cannot find that Plaintiff did not receive a copy of the rules. Moreover, the arbitration agreement clearly identifies the applicable rules that apply to the arbitration agreement.

As such, this factor is not in Plaintiff’s favor.

Issue No. 3: Disadvantages of Arbitration and Consulting Legal Counsel

Plaintiff argues that the arbitration agreement is procedurally unconscionable because it is silent on the disadvantages of arbitration and the importance of consulting a lawyer.

Plaintiff’s reliance on Ontiveros is misplaced as Ontiveros does not stand for the rule that an arbitration agreement must explain the disadvantages of arbitration and the importance of consulting with a lawyer. (Ontiveros v. DHL Express (USA), Inc. (2008) 164 Cal.App.4th 494.) Moreover, Plaintiff’s cite to Stirlen is also misplaced for the same reasons. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519.) Moreover, the Court finds that the agreement does indicate the disadvantage of arbitration as it says in all capital letters that by signing the arbitration agreement, Plaintiff waived the right to a trial by jury. (Wolpin Decl. at Exhibit A.)

Issue No.4: Substantive Unconscionability

“Under California law, the doctrine of unconscionability has a procedural and a substantive element. Both elements must appear in order to invalidate a contract or one of its individual terms.” (Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 174.)

In the FEHA context when assessing the substantive unconscionability of an arbitration agreement, an 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 of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102.) An arbitration agreement does not have to explicitly outline the above requirements in the agreement but may incorporate them by reference to pertinent arbitration rules. (Fittante v. Palm Springs Motors, Inc. (2003) 105 Cal.App.4th 708, 716.)

Neutral Arbitrator

Here, the agreement provides for a neutral arbitrator as the agreement indicates that the arbitrator will be selected from a panel provided by the American Arbitration Association. The applicable AAA Rules express that a neutral arbitrator will be selected. (Wagner Decl., Exhibit D at 15.) Plaintiff does not present any argument that the agreement does not provide for a neutral arbitrator.

Discovery

Here, the applicable AAA rules which are incorporated into the arbitration agreement provides that “[t]he 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.” (Id. at 14.) Plaintiff does not argue that the agreement fails to provide for more than minimal discovery.

Relief

Plaintiff does not argue that the arbitration agreement does not provide for all types of relief that would otherwise be available in court. Thus, the Court finds that Plaintiff has conceded on this point.

Written Award

Plaintiff argues that while the agreement does require a written fee award, the AAA Rules do not provide for any judicial review to protect Plaintiff’s statutory rights. Plaintiff argues that the AAA Rules indicate that the arbitrator’s decision shall be final and binding (Id. at 39g.) and as such there is no form of judicial review.

The Court rejects Plaintiff’s argument because neither the agreement nor the AAA Rules prohibit any form of judicial review. Moreover, “a dispute resolution procedure is not an arbitration unless there is . . . a final and binding decision.” (Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Cal.App.4th 676, 687.) Moreover, California Code of Civil Procedure, Section 1286.2 provides a statutory basis for judicial review of arbitration proceedings.

Costs of Arbitration

Plaintiff argues that the arbitration agreement is substantively unconscionable because the agreement allows the arbitrator to require the employee to pay all arbitration and administrative costs and fees.

The Court finds Plaintiff’s argument meritless as Plaintiff cites to the inoperative National Rules in her opposition. The operative AAA Rules indicate that “[a]ll expenses of the arbitrator, required travel and other expenses, and any AAA expenses, as well as the costs relating to proof and witnesses produced at the direction of the arbitrator, shall be borne by the employer company, unless otherwise agreed by the parties post-dispute.” (Wagner Reply Decl., Exhibit A at 2.)

Thus, the Court finds that substantive unconscionability is not present.

The Court GRANTS Defendant’s motion to compel arbitration pursuant to the arbitration agreement between the parties. This action is STAYED pending completion of arbitration pursuant to the terms of the arbitration agreement. (Code Civ. Proc. § 1281.4.)

The Court sets a status conference in this department on Friday, March 13, 2020 at 8:30 a.m.

Moving Party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 18th day of June 2019

Hon. Holly J. Fujie

Judge of the Superior Court