Opinion
A146177
11-17-2017
ENCARNITA ALONSO, Plaintiff and Respondent, v. GURBAKSH CHAHAL et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco County Super. Ct. No. CGC-15-545426)
Defendants Gurbaksh Chahal and Gravity4, Inc. (collectively "the Gravity4 Defendants") appeal from an order denying their motion to compel arbitration of a discrimination, harassment, and retaliation lawsuit filed by plaintiff Encarnita Alonso, a former executive at the company. The Gravity4 Defendants contend the trial court erred when it ruled that no contract was ever formed so as to compel arbitration. We agree and also reject Alonso's arguments that the arbitration agreement was unconscionable. We reverse.
BACKGROUND
Alonso is a marketing executive with approximately 20 years' experience in the advertising technology sector. In December 2014, she received an offer to join Gravity4 as its Senior Vice President of Global Marketing. Gravity4 offered Alonso a $250,000 initial base salary, stock options, and other employee benefits.
On December 2, 2014, as part of its hiring process, Gravity4 emailed Alonso the following documents: (1) an offer letter with the subject heading "At-Will Employment with Gravity4, Inc." ("Offer Letter"); (2) the "Employee Proprietary Information and Invention Assignment Agreement" ("Proprietary Information Agreement"); and (3) the "Employment and Nondisclosure Agreement" ("NDA").
Gravity4 also transmitted to Alonso the "Agreement and Policy of Gravity4, Inc. of Equal Employment Opportunity and Zero Tolerance of Harassment, Discrimination, and Retaliation" ("Zero Tolerance Policy Agreement"). Neither party discusses this agreement, and it does not bear on our analysis.
Offer Letter. The Offer Letter is a six-page document that sets forth Alonso's terms of employment. It includes an arbitration provision which occupies all of page four of the agreement and appears below the underlined and bold-lettered heading "Agreement to Arbitrate." The arbitration provision reads as follows, "To the fullest extent permitted by law, you and Gravity4 agree to arbitrate any controversy, claim or dispute between them arising out of or in any way related to this offer letter, your employment relationship with Gravity4, and any disputes upon termination of employment, including but not limited to breach of contract, tort, discrimination, harassment, wrongful termination, demotion, discipline, failure to accommodate, family and medical leave, privacy, compensation or benefits claims, constitutional claims, and any claims for violation of any federal, state or local law, statute, regulation, ordinance, or common law . . . . Upon your signing of this letter, you and Gravity4 are both waiving the right to jury trial with respect to these matters." The provision sets forth an exception for claims under the Proprietary Information Agreement which it notes "shall not be subject to these arbitration provisions."
Additional provisions identify the consideration exchanged for the arbitration agreement, the process for initiating arbitration, Gravity4's agreement to bear arbitration-related costs, and the arbitration procedure. A section on procedure provides that arbitration will be conducted in "accordance with the rules for resolution of employment disputes of JAMS Endispute LLC ("JAMS") (effective as of July 15, 2009)." A severability clause reads, "In the event any provision of this letter is found by an arbitrator (under the procedures described above) or court of competent jurisdiction to be unenforceable, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited . . . . If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed omitted." The letter agreement also identifies as other conditions of employment compliance with both the Proprietary Information Agreement and Zero Tolerance Policy Agreement, which are "incorporated herein."
Proprietary Information Agreement. The Proprietary Information Agreement addresses employee use and disclosure of company proprietary information and intellectual property. It contains an arbitration provision which reads in part, "[A]ll disputes between Company and Employee arising out of or related to this Agreement shall be settled by binding arbitration under the Comprehensive Arbitration Rules then in force of JAMSEndispute, LLC ("JAMS") . . . or any other rules or organization upon which the parties may agree at that time, before a single arbitrator." Another section of the agreement entitled "Governing Law; Consent to Personal Jurisdiction" establishes that California law governs any disputes and states: "I expressly consent to the exclusive personal jurisdiction of the state and federal courts in California for any lawsuit arising from or relating to this Agreement or [her] employment with Company. I acknowledge and agree that any violation or threatened violation of this [Proprietary Information Agreement] would result in irreparable damage to [Gravity4] which might be difficult or impossible to quantify and which would exceed my ability to respond in monetary damages. I agree that the provisions hereof may be enforced by prohibitory or mandatory injunctive relief . . . ."
NDA. The NDA obligates employees to maintain confidential information in strict confidence. It, too, includes an arbitration provision which requires that any NDA-related disputes be subject to binding arbitration to be "administered by the American Arbitration Association ("AAA") in accordance with its Rules."
On December 2, 2014, Alonso electronically signed and dated each agreement. Her signature in each document is prefaced by language reflecting her understanding and acceptance of the terms and conditions of that agreement. Also, immediately before Alonso's signature line in the Proprietary Information Agreement is an "Advice of Counsel" provision, which reads, "I acknowledge that, in executing this agreement, I have had the opportunity to seek the advice of independent legal counsel at [her] own expense and either have done so or knowingly have elected not to do so." The NDA contains a similar provision.
In January 2015, Gravity4 terminated Alonso after approximately six weeks of employment. In April 2015, Alonso filed suit against the Gravity4 Defendants in San Francisco Superior Court alleging claims for discrimination, harassment, and retaliation under the California Fair Employment and Housing Act, as well as a claim for unlawful electronic eavesdropping. The Gravity4 Defendants moved to compel arbitration and stay the litigation. The trial court denied the motion. Observing several "internal inconsistencies" between the employment agreement, Proprietary Information Agreement, and NDA, the court found "the contract terms were not clear enough that the parties could understand what each was required to do and thus no contract was formed as to arbitration." The Gravity4 Defendants appeal.
Specifically, Alonso asserted statutory claims for (1) gender discrimination (Govt. Code §§ 12940, subd. (a)); (2) age discrimination (Govt. Code § 12940, subd. (a)); (3) harassment (Govt. Code § 12940, subd. (j)); (4) retaliation (Govt. Code § 12940, subd. (h)); (5) failure to prevent harassment, discrimination and retaliation (Govt. Code § 12940, et seq.); and (6) unlawful electronic eavesdropping (Pen. Code § 632).
DISCUSSION
A. General Principles
An order denying a motion to compel arbitration is subject to de novo review on appeal where the evidence is not in conflict. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle).) Both parties agree the trial court order was based on its reading of their written agreements and that order is subject to our de novo review.
" 'The right to arbitration depends on a contract. [Citations.] Accordingly, a party can be compelled to submit a dispute to arbitration only where he has agreed in writing to do so. [Citation.]' " (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 172 (Serafin).) "In determining whether there is a duty to arbitrate, the trial court must, at least to some extent, examine and construe the agreement." (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239 (Tiri).) Courts must also "consider the parties' likely expectations about allocations of responsibility" when construing arbitration provisions. (Sandquist v. Lebo Automotive, Inc. (2016) 1 Cal.5th 233, 246.) " 'Typically, those who enter into arbitration agreements expect that their dispute will be resolved without necessity for any contact with the courts.' [Citation.]" (Id. at p. 247.)
"California has a strong public policy in favor of arbitration." (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) "[A]rbitration agreements should be liberally interpreted, and arbitration should be ordered unless the agreement clearly does not apply to the dispute in question." [Citation.] "Doubts as to whether an arbitration [provision] applies to a particular dispute are to be resolved in favor of sending the parties to arbitration.' " (Vianna v. Doctors' Management Co. (1994) 27 Cal.App.4th 1186, 1189.) However, " '[t]he policy in favor of arbitration does not apply when the contract cannot be interpreted in favor of arbitration. There is no policy in favor of arbitrating a dispute the parties did not agree to arbitrate.' " (Balandran v. Labor Ready, Inc. (2004) 124 Cal.App.4th 1522, 1527-1528.)
B. Who Decides Arbitrability
First, we must decide whether the court or the arbitrator determines arbitrability. Gravity4 contends the JAMS rules which were expressly incorporated into the Offer Letter clearly delegated arbitrability determinations to the arbitrator. We disagree.
The question of whether a particular dispute is within the scope of an arbitration agreement is to be decided by the court, not the arbitrator, "[u]nless the parties clearly and unmistakably provide otherwise." (AT&T Technologies, Inc. v. Communications Workers of America (1986) 475 U.S. 643, 649.) "Just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, . . . so the question 'who has the primary power to decide arbitrability' turns upon what the parties agreed about that matter." (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 943-945.) For an arbitrator to decide the question of an arbitration agreement's enforceability, the parties must clearly and unmistakably agree that the arbitrator will decide whether the agreement is enforceable; ambiguous language does not suffice. (Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425, 1445.)
In Baker v. Osborne Development Corp. (2008) 159 Cal.App.4th 884 (Baker), the court refused to enforce an express delegation clause that read "[a]ny disputes concerning the interpretation or enforceability of this arbitration agreement, including without limitation, its revocability or voidability for any cause . . . shall be decided by the arbitrator." (Id. at pp. 888-89.) Despite such seemingly clear and unmistakable language, the court concluded that the issue of delegation was ambiguous in light of another clause in the arbitration provision that allowed for severance if "any provision of this arbitration agreement shall be determined by the arbitrator or by any court to be unenforceable." (Id. at pp. 891, 893.) Thus, "although one provision of the arbitration agreement stated that issues of enforceability or voidability were to be decided by the arbitrator, another provision indicated that the court might find a provision unenforceable." (Id. at p. 893.) Because "the arbitration agreement did not 'clearly and unmistakably' reserve to the arbitrator the issue of whether the arbitration agreement was enforceable," the court determined that the court should adjudicate the question of whether the agreement was enforceable. (Id. at p. 894.)
This case is similar to Baker. Gravity4's Offer Letter to Alonso states the parties "agree to arbitrate any controversy, claim or dispute between them arising out of or in any way related to this offer letter, your employment relationship with Gravity4, and any disputes upon termination of employment." The Offer Letter further provides that any arbitration will be conducted in accordance with JAMS rules for resolution of employment disputes. Those rules vest the arbitrator with the following authority: "Jurisdictional and arbitrability disputes, including disputes over the formation, existence, validity, interpretation or scope of the agreement under which Arbitration is sought . . . shall be submitted to and ruled on by the Arbitrator. Unless the relevant law requires otherwise, the Arbitrator has the authority to determine jurisdiction and arbitrability issues as a preliminary matter." While standing in isolation this delegation language appears to be a clear and broad delegation of arbitrability issues to the arbitrator, the delegation is equivocal when read with the Offer Letter's severability clause. That one-paragraph severability provision makes four references to "court" authority over interpretation of the agreement First, it allows for modification "[i]n the event any provision of [the Offer Letter] is found by an arbitrator (under the procedures described above) or court of competent jurisdiction to be unenforceable." (Italics added.) Its illustration of the point contains the second and third references: "[I]n the event any provision of this letter relating to the time period, scope of activities or areas of restrictions shall be so found to exceed the maximum time period, scope of activities or area such arbitrator or court deems reasonable and enforceable, the time period, scope of activities or areas of restrictions shall thereafter be deemed the maximum which such court deems reasonable and enforceable." (Italics added.) Fourth, the Offer Letter provides that "[i]f a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed omitted . . . ." (Italics added.) "[W]here one contractual provision indicates that the enforceability of an arbitration provision is to be decided by the arbitrator, but another provision indicates that the court might also find provisions in the contract unenforceable, there is no clear and unmistakable delegation of authority to the arbitrator." (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 792.) The references to court authority over arbitrability issues make the language delegating such issues solely to the arbitrator unclear. Thus, in the absence of clear and unmistakable language delegating the question of arbitrability to the arbitrator, the court decides arbitrability and enforceability of the Offer Letter.
C. Existence and Enforceability of Arbitration Agreement
We next consider whether the Offer Letter's arbitration clause was valid and enforceable. The Gravity4 Defendants contend that there was a valid arbitration agreement that covered Alonso's claims and the trial court's ruling that there was no agreement to arbitrate was "utterly without factual or legal support." We agree there was a valid arbitration agreement.
"The right to arbitration depends on a contract. [Citations.] Accordingly, a party can be compelled to submit a dispute to arbitration only where he has agreed in writing to do so. [Citation.]" (Boys Club of San Fernando Valley, Inc. v. Fidelity & Deposit Co. (1992) 6 Cal.App.4th 1266, 1271.) "In California, '[g]eneral principles of contract law determine whether the parties have entered a binding agreement to arbitrate.' [Citations.]" (Pinnacle, supra, 55 Cal.4th at p. 236.) In a motion to compel arbitration, "the party seeking arbitration bears the burden of proving the existence of an arbitration agreement by a preponderance of the evidence, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any defense. [Citations.]" (Peng v. First Republic Bank (2013) 219 Cal.App.4th 1462, 1468.)
The Gravity4 Defendants met their burden of proving the existence of an arbitration agreement. The "Agreement to Arbitrate" in Gravity4's Offer Letter to Alonso provides: "To the fullest extent permitted by law, you and Gravity4 agree to arbitrate any controversy, claim or dispute between them arising out of or in any way related to this offer letter, your employment relationship with Gravity4, and any disputes upon termination of employment, including but not limited to breach of contract, tort, discrimination, harassment, wrongful termination, demotion, discipline, failure to accommodate, family and medical leave, privacy, compensation and benefits claims, constitutional claims, and any claims for violation of any federal, state or local law, statute, regulation, ordinance, or common law . . . ." An acknowledgement for the signatory at the end of the letter states, "I have read, understand and agree to the foregoing terms and conditions and to the job description." Alonso's electronic signature appears beneath that acknowledgement. Even Alonso stated in a trial court brief that she "[did] not contest that the Offer Letter exists and covers Ms. Alonso's employment-related claims." Since the Gravity4 Defendants undeniably proved an arbitration agreement exists, we will address Alonso's defenses.
1. Alonso's Uncertainty Defense
Alonso's first defense is that no arbitration agreement ever formed because Gravity4's offer to arbitrate was too uncertain to be accepted. Even though this was not an argument Alonso raised in trial court briefing but was orally addressed in hearings, this was the basis for the trial court's ruling. Here on appeal, Alonso defends the trial court's reasoning. We are not persuaded.
California statutes allow for the enforcement of contracts even if they contain ambiguous terms. (Civ. Code §§ 1649-1654.) A contract interpretation which gives effect to the contract is preferred to one which makes it void. (Civ. Code § 3541.) For example, repugnancies must be reconciled, if possible, by an interpretation that will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract. (Civ. Code § 1652.) Courts must interpret the contract in such a way as to make it "lawful, operative, definite, reasonable, and capable of being carried into effect" if it can be done without violating the parties' intent. (Civ. Code § 1643.) If any ambiguity, repugnancy or inconsistency is not removed by the statutory rules of interpretation, then the language in the contract should be interpreted most strongly against the party who caused the uncertainty to exist. (Civ. Code § 1654.) In light of these statutory rules of contract interpretation, the existence of some ambiguity in the arbitration agreement does not render that agreement unenforceable. (See 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1214-1215 [employer's personnel handbook and its arbitration procedures manual contained conflicting provisions governing the allocation of arbitration costs] (24 Hour Fitness).)
Here, the parties executed three different agreements: the Offer Letter, the Proprietary Information Agreement, and the NDA. Each agreement was subject to arbitration but each had a different purpose. The Offer Letter addresses employment matters such as Alonso's duties, performance, compensation, and benefits. The Proprietary Information Agreement concerns the use and disclosure of company proprietary information and intellectual property. The NDA seeks to ensure that company confidential information is kept in strict confidence. Moreover, the parties agreed to different rules of arbitration in each agreement to address the different types of potential disputes that could arise under each one. Claims arising out of the Offer Letter relating to the hire, employment, remuneration, or termination of employees are subject to JAMS Endispute LLC, "rules for [the] resolution of employment disputes." Claims under the Proprietary Information Agreement are not subject to the same employment-focused rules but instead are governed by the JAMS Comprehensive Arbitration Rules. AAA's rules govern disputes arising under the NDA. In this context, none of the alleged inconsistencies are troubling or cause to nullify the arbitration agreement.
Alonso claims the Offer Letter is inconsistent with the Proprietary Information Agreement because it exempts the Proprietary Information Agreement from the scope of its arbitration provision. Yet the Proprietary Information Agreement provides that "all disputes . . . arising out of or related to [that] agreement shall be settled by binding arbitration." We see no inconsistency. The Offer Letter's arbitration provision covers employment-related claims. It specifically carves out intellectual property-related disputes from its arbitration provisions, but this exemption is not a wholesale exemption from arbitration, as Alonso suggests. The Proprietary Information Agreement makes clear that matters arising under it will be arbitrated, but under a different set of rules provided for in that agreement. Thus, even though different rules apply, all employment-related claims and intellectual-property-related claims are subject to arbitration.
The next inconsistencies Alonso identifies center around the existence of different terms for the same subjects in each of the three agreements. Each of them adopts a different set of arbitration rules: the Offer Letter selects JAMS Endispute for employment-related matters; the Proprietary Information Agreement relies on the JAMS Comprehensive Arbitration Rules; and the NDA utilizes the AAA rules. Each of the three agreements also has distinct provisions for allocating the cost of arbitration. The Offer Letter imposes such costs on Gravity4. The Proprietary Information Agreement assigns the costs to the prevailing party, and the NDA allots such costs to either party. In light of the distinct purposes and subject matters of each agreement, there is no uncertainty.
Alonso identifies the fact that "the Putative contract requires arbitration in both JAMS and AAA—two mutually independent forums" as another inconsistency in the agreements. This essentially repeats her point that the contract contains three separate sets of arbitration rules. --------
However, even some ambiguity would not render the parties' arbitration agreement unenforceable. "When an arbitration provision is ambiguous, we will interpret that provision, if reasonable, in a manner that renders it lawful, both because of our public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution, and because of the general principle that we interpret a contractual provision in a manner that renders it enforceable rather than void. [Citations.]" (Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 682.) Applying these principles, it is reasonable and apparent that the parties entered into different agreements to deal with different subject matters and disputes that could arise out of discrete aspects of Alonso's employment. We are not faced with a situation where we must determine which of the arbitration rules in the three agreements prevails or which applies to Alonso's claims. In this case, Alonso's claims for discrimination, harassment, and retaliation, as well as her claim for unlawful electronic eavesdropping, are employment-related. They properly arise under the Offer Letter and its corresponding rules. The fact that the Proprietary Information Agreement and NDA contain different terms and rules from the Offer Letter is of no consequence, because they have no bearing on the resolution of Alonso's claims against the Gravity4 Defendants.
Flores v. Nature's Best Distribution, LLC (2016) 7 Cal.App.5th 1, which Alonso cites in supplemental briefing and described as "really close on the facts" at oral argument, is distinguishable. In Flores, the Court of Appeal concluded the parties' agreement to arbitrate was unenforceable because it was "ambiguous regarding (1) whether the arbitration provision of [their alternative dispute resolution] Agreement (not a grievance and arbitration procedure of a collective bargaining agreement) applied to any or all of plaintiff's claims against any or all of defendants in the instant action and (2) the governing rules and procedures for any such arbitration." (Id. at p. 11.) Here, there is no comparable ambiguity. As noted above, and as Alonso acknowledged in the trial court, the employment-related claims Alonso asserted against the Gravity4 Defendants fall under the Offer Letter, and it is clear the JAMS Endispute rules for employment disputes govern those proceedings. Alonso has not met her burden of proving uncertainty.
2. Alonso's Unconscionability Defense
Alonso's second defense is that Gravity4's contract was unconscionable. The trial court never addressed this defense in light of its conclusion that no contract formed on arbitration. However, given our conclusion that there was an arbitration agreement, we consider this defense and conclude that it, too, fails.
Unconscionability is codified in Civil Code section 1670.5, subdivision (a), which states: "If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result." (Parada v. Superior Court (2009) 176 Cal.App.4th 1554, 1567-68.) Under California law, unconscionability has both procedural and substantive elements, and both elements must be present for a court to invalidate a contract on the ground of unconscionability. (24 Hour Fitness, supra, 66 Cal.App.4th at pp. 1212-1213.)
We first consider the issue of substantive unconscionability. "Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided." (Pinnacle, supra, 55 Cal.4th at p. 246.) The "central idea" is that "the unconscionability doctrine is concerned not with 'a simple old-fashioned bad bargain' [citation] but with terms that are 'unreasonably favorable to the more powerful party.' " (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244). "To be substantively unconscionable, a contractual provision must shock the conscience." (Baker, supra, 159 Cal.App.4th at p. 894.) None of the three grounds Alonso asserts for substantive unconscionability meets this standard.
First, in an echo of her inconsistency argument, Alonso contends the Offer Letter is substantively unconscionable because it requires arbitration of claims employees typically bring (e.g., breach of contract, tort, harassment, wrongful termination) but exempts from arbitration the claims Gravity4 would most likely assert (e.g., intellectual property disputes). Alonso describes this as a "gross imbalance [that] weighs heavily toward a finding of substantive unconscionability." We read the agreement differently.
There is no dispute that the Offer Letter's arbitration provision requires the mutual arbitration of typical employment-related claims and carves out certain intellectual property disputes. It states that the Proprietary Information Agreement "shall not be subject to these arbitration provisions." But this carve-out for intellectual property-related disputes is not "grossly-imbalance[d]" or one-sided. The Proprietary Information Agreement has its own arbitration clause which states, "[A]ll disputes between [Gravity4] and Employee arising out of or related to this Agreement shall be settled by binding arbitration." Alonso identifies this provision in her brief but says nothing of its effect. This arbitration clause makes clear that even intellectual property claims are not exempt from arbitration as Alonso contends, and their arbitration is a mutual obligation with which both the company and employee must comply. (See Serafin, supra, 235 Cal.App.4th at p. 182 [where an arbitration agreement sets forth that "any and all" disputes between the parties will be arbitrated, courts have found the agreement to be fully mutual in scope].)
Alonso says the "Governing Law; Consent to Personal Jurisdiction" clause in the Proprietary Information Agreement, which provides for provisional relief under certain circumstances, also proves the imbalance. That provision requires the employee to "consent to the exclusive personal jurisdiction of the state and federal courts in California for any lawsuit arising from or relating to this [Proprietary Information Agreement] or [the employees'] employment with [Gravity4]." It further states: "I acknowledge and agree that any violation or threatened violation of this [Proprietary Information Agreement] would result in irreparable damage to [Gravity4] which might be difficult or impossible to quantify and which would exceed my ability to respond in monetary damages. I agree that the provisions hereof may be enforced by prohibitory or mandatory injunctive relief . . . ." First, none of the claims Alonso brought against the Gravity4 Defendants were asserted under the Proprietary Information Agreement. It thus has no application to this dispute. Even so, this jurisdiction and provisional relief provision does not demonstrate unconscionability. In Baltazar, supra, 62 Cal.4th at p. 1237, an arbitration agreement contained a provisional relief clause that allowed parties to seek a temporary restraining order or injunctive relief in the event either party proceeded to arbitration. (Id. at p. 1241.) The California Supreme Court ruled the provision was not substantively unconscionable, as it did "no more than recite the procedural protections already secured by [California Code of Civil Procedure] section 1281.8(b), which expressly permits parties to an arbitration to seek preliminary injunctive relief during the pendency of the arbitration." (Id. at p. 1247.) While the provisional relief clause here does not mirror the exact language of the provision in Baltazar or California Code of Civil Procedure section 1281.8, it has the same effect. Also, the fact that the provision does not expressly state it applies mutually is of no consequence, because the statute authorizes any party to an arbitration agreement to seek a provisional remedy when "the award to which the applicant may be entitled may be rendered ineffectual without provisional relief." (Code Civ. Proc. § 1281.8, subd. (b).)
In addition, Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, which Alonso says is "identical" to her case, is inapplicable. In Fitz, the court concluded an arbitration agreement was unconscionable because the employer specifically reserved the right to bring all claims concerning its confidentiality and non-competition agreements to court. (Id. at pp. 725-26.) As discussed, no such one-sided reservation is present in this case, as both the company and its employees are required to arbitrate their proprietary information claims. Accordingly, the intellectual-property-claim carve-out is not grounds for unconscionability.
Second, Alonso argues the NDA's modification clause is unconscionable because it gives Chahal the unilateral power to adjust the delegation clause without giving prior notice to Alonso or requiring her authorization. The modification clause Alonso references provides that the "[NDA] may not be modified or amended absent the express, written consent of Chahal." The NDA is also not relevant to any of Alonso's claims against the Gravity4 Defendants. But even if Alonso's claims were asserted under the NDA, its modification provision would not make the agreement unconscionable. The arbitration agreement in Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, allowed the employer to alter the terms of any policy contained in the employee handbook at its sole discretion and without notice. (Id. at p. 706.) The court concluded the agreement was not unconscionable or unenforceable on this basis because the implied covenant of good faith and fair dealing prevented the employer from changing the agreement in a way that frustrated the purpose of the agreement. (Ibid.) Since Chahal must exercise his modification rights fairly and in good faith, the NDA's modification provision does not make Gravity4's agreement with Alonso unconscionable. (See also 24 Hour Fitness, supra, 66 Cal.App.4th at p. 1214.)
Finally, Alonso submits that the arbitration clause's venue designation is unconscionable. The Offer Letter states arbitration is to take place in San Francisco, "the county in which Gravity4 has its executive offices." Since she is resident in New York and her job duties were performed in Gravity4's New York office, Alonso contends that locating arbitration in California where Gravity4, the party with greater resources, is located is substantively unconscionable. There is no shock to the conscience here either. Our Supreme Court has explained that a clause requiring arbitration in a distant forum is unconscionable where it imposes significant hardships on the weaker party and has "no justification other than as a means of maximizing an advantage over the" weaker party. (Bolter v. Superior Court (2001) 87 Cal.App.4th 900, 910.) That is not the case here. There was no evidence that arbitrating in California would be prohibitively expensive for Alonso. More importantly, we can reasonably assume that Alonso was well aware that San Francisco was the location of the company's headquarters. Getting the job required her to travel to San Francisco, which she was able to do even on short notice, to interview with company executives. In a trial court declaration, Alonso stated she understood she would be required to travel to California for work purposes, albeit "only rarely." Even if inconvenient for Alonso, Gravity4's selection of San Francisco as the location for arbitration was not unreasonable, without justification nor unconscionable.
In sum, Alonso has failed to identify any substantive unconscionability. In view of this conclusion, we need not address any issues of procedural unconscionability.
DISPOSITION
The order denying the Gravity4 Defendants' petition to compel arbitration and stay proceedings is reversed. The case is remanded with directions to grant the petition. Each party is to bear its own costs on appeal.
/s/_________
Siggins, J. We concur: /s/_________
McGuiness, P.J. /s/_________
Pollak, J.