Opinion
B308752
01-20-2023
JESUS MACIAS et al., Plaintiffs and Appellants, v. STRATEGIC OUTSOURCING, INC., et al., Defendants and Respondents.
Gary Rand &Suzanne E. Rand-Lewis, Suzanne E. RandLewis and Timothy Rand-Lewis for Plaintiffs and Appellants. Fisher & Phillips, Christopher J. Boman, Megan E. Walker and Kathryn M. Evans for Defendants and Respondents.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC709260, Stuart M. Rice, Judge. Affirmed.
Gary Rand &Suzanne E. Rand-Lewis, Suzanne E. RandLewis and Timothy Rand-Lewis for Plaintiffs and Appellants.
Fisher & Phillips, Christopher J. Boman, Megan E. Walker and Kathryn M. Evans for Defendants and Respondents.
BENDIX, Acting P. J.
Plaintiffs and appellants Jesus Macias, Anthony Meza, Damien Pacheco, Juan Pacheco, Jorge Pelayo, and Rodolfo Sandoval (collectively, plaintiffs) appeal from a judgment confirming a contractual arbitration award in favor of defendants and respondents Strategic Outsourcing, Inc. (SOI) and Amlease Corporation (collectively, respondents). Plaintiffs contend the trial court erred by compelling them to arbitrate their claims. Specifically, plaintiffs argue respondents' motion to compel arbitration was procedurally deficient; respondents failed to prove the existence of a valid arbitration agreement; some of plaintiff's causes of action were not arbitrable; the arbitration agreement was unconscionable; and one of respondents' co-defendants was not party to the arbitration agreement and had not consented to arbitration. We reject these arguments and affirm.
BACKGROUND
1. Complaint and motion to compel arbitration
SOI characterizes itself as a company "that provides other businesses with full-service Human Resources . . . solutions, including payroll processing, medical or retirement benefits, and other administrative services." SOI is an owner of Amlease Corporation.
On June 8, 2018, plaintiffs filed a complaint against respondents, Star Fisheries, Inc. (Star Fisheries), and Star Fisheries' employees Jolene DiMaggio, Cristina Acuna, Kim Golden, and John Swain. The complaint asserted causes of action arising from plaintiffs' employment with Star Fisheries. Plaintiffs alleged respondents provided hiring and recruiting services, and plaintiffs were hired through respondents to work for Star Fisheries. The complaint used the defined term "AGENCY" to refer to respondents, the defined term "EMPLOYER" to refer to Star Fisheries, and the defined term "MANAGERS" to refer to DiMaggio, Acuna, Golden, and Swain.
The complaint asserted 15 causes of action, including wrongful termination; discrimination, harassment, and retaliation in violation of various constitutional and statutory provisions; wage order violations; intentional infliction of emotional distress; violation of Business and Professions Code section 17200; fraud, negligent misrepresentation, and concealment; breach of contract; breach of the covenant of good faith and fair dealing; violation of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.; CLRA); and negligence.
Not all causes of action were asserted against each defendant-rather, each cause of action contained a heading identifying the specific defendants against whom the cause of action was asserted, be it EMPLOYER, AGENCY, MANAGERS, or some combination thereof. Respondents, as "AGENCY," were listed in the seventh, eighth, ninth, twelfth, thirteenth, fourteenth, and fifteenth causes of action. These causes of action alleged violation of Business and Professions Code section 17200; fraud, negligent misrepresentation, and concealment; violation of article I, section 8 of the California Constitution; breach of contract; breach of the covenant of good faith and fair dealing; and violation of the CLRA.
Star Fisheries, DiMaggio, Golden, and Swain filed answers to the complaint. Acuna did not.
On October 1, 2018, respondents filed a motion to compel arbitration. In support, respondents provided the declaration of Callie Hoffer, one of SOI's client services managers. Hoffer declared that Star Fisheries was a client of SOI at the time Star Fisheries hired plaintiffs. Her declaration attached documents she averred came from each plaintiff's "new hire packet," which packets were retained in SOI's records. The attachments to the declaration included, for each plaintiff, a page entitled "Section 3-Worksite Employee Notice &Acknowledgements" (Section 3), which contained an arbitration provision. (Bold &some capitalization omitted.)
The arbitration provision reads, in relevant part:
"I and TriNet SOI agree that: Any dispute involving TriNet SOI, Company, or any benefit plan, insurer, employee, officer, or director of TriNet SOI or Company (all of which are Beneficiaries of these Acknowledgments) arising from or relating to my employment, application for employment, or termination from employment will be resolved exclusively through binding arbitration before a neutral arbitrator in the capital or largest city of the state in which I work or another mutually agreed location (TriNet SOI may appear by phone); The Arbitrator may grant the same remedies that would be available in a court of law (and no more), and will use the same rules of evidence as a federal court; Unless prohibited by law, costs of arbitration will be shared equally by the parties; If applicable law requires provisions in an arbitration agreement which are different from what is included here, they will be deemed incorporated to the minimum extent required; Disputes will be resolved solely upon applicable law, evidence adduced, and defenses raised, and no other basis, and the arbitrator may grant summary disposition or disposition on the pleadings; The arbitrator will render a reasoned written decision. In addition: I AND TriNet SOI MUTUALLY WAIVE ANY RIGHT TO A JURY TRIAL, and I agree to participate in any legal dispute with any Beneficiary only in my individual capacity, not as a member or representative of a class or part of a class action."
The complete arbitration provision reads: "If arbitration agreements are forbidden by law with respect to my employment (for example, if I am employed on a federal contract) the agreement to arbitrate below will not apply, and if I am represented by a union and my collective bargaining agreement (CBA) is inconsistent with my agreement to arbitrate in a given case then the agreement to arbitrate will not apply. The other parts of the agreement below will continue to apply in all cases. I and TriNet SOI agree that: Any dispute involving TriNet SOI, Company, or any benefit plan, insurer, employee, officer, or director of TriNet SOI or Company (all of which are Beneficiaries of these Acknowledgments) arising from or relating to my employment, application for employment, or termination from employment will be resolved exclusively through binding arbitration before a neutral arbitrator in the capital or largest city of the state in which I work or another mutually agreed location (TriNet SOI may appear by phone); The Arbitrator may grant the same remedies that would be available in a court of law (and no more), and will use the same rules of evidence as a federal court; Unless prohibited by law, costs of arbitration will be shared equally by the parties; If applicable law requires provisions in an arbitration agreement which are different from what is included here, they will be deemed incorporated to the minimum extent required; Disputes will be resolved solely upon applicable law, evidence adduced, and defenses raised, and no other basis, and the arbitrator may grant summary disposition or disposition on the pleadings; The arbitrator will render a reasoned written decision. In addition: I AND TriNet SOI MUTUALLY WAIVE ANY RIGHT TO A JURY TRIAL, and I agree to participate in any legal dispute with any Beneficiary only in my individual capacity, not as a member or representative of a class or part of a class action. I understand that nothing herein impairs my right to engage in collective action under Section 7 of the National Labor Relations Act and I am not prohibited from complaining to government agencies or cooperating with their investigations. My agreements to arbitrate, waive jury trials, and participate only in my individual capacity are contracts under the Federal Arbitration Act and any other laws validating such agreements and waivers. No failure to strictly enforce these agreements will constitute a waiver or create any future waivers, and no-one other than counsel for TriNet SOI (in writing) may waive this agreement for TriNet SOI. If any part is unenforceable, the rest will still be enforceable."
The parties do not dispute that references to "TriNet SOI" in the arbitration provision are to SOI, and references to "Company" are to Star Fisheries.
Hoffer declared that the signatures on Section 3 matched signatures on other documents within each plaintiff's new hire packet. To demonstrate, Hoffer's declaration attached signed federal I-9 and W-4 forms for each plaintiff, and in plaintiff Juan Pacheco's case, copies of his passport and driver license.
In its motion, SOI argued that the arbitration provision applied not only to SOI and Star Fisheries, the parties expressly identified in the provision, but also to Amlease and the other defendants by virtue of plaintiffs' allegations of an agency and joint employment relationship among all defendants.
SOI also noted in its motion the clause of the arbitration provision requiring the parties to share arbitration costs equally. SOI acknowledged that under California law, an employer could not require an employee to bear arbitration costs beyond what the employee would pay in court. Accordingly, SOI "agree[d] to bear any costs unique to arbitration."
Star Fisheries, DiMaggio, Golden, and Swain filed their own motion joining in respondents' motion.
Plaintiffs opposed the motion to compel arbitration. Plaintiffs contended, with declarations from each plaintiff in support, that they had never received nor signed any arbitration provisions, and the signatures on the copies of Section 3 attached to Hoffer's declaration were "fabricated." Plaintiffs argued the arbitration provision was procedurally unconscionable because it was a contract of adhesion and failed to include a copy of any arbitration rules, and substantively unconscionable in that it limited plaintiffs' discovery. Plaintiffs further argued that respondents' motion failed to quote or incorporate the specific terms of the arbitration provision, in violation of the Rules of Court; arbitration was inappropriate given that defendant Acuna had not consented to arbitration; respondents had failed to establish that the arbitration provision was governed by either the Federal Arbitration Act (9 U.S.C. § 1 et seq.; FAA) or the California Arbitration Act (Code Civ. Proc., § 1280 et seq.; CAA); some of plaintiffs' causes of action were exempt from arbitration; and respondents were barred from compelling arbitration under the doctrines of laches and unclean hands.
Plaintiffs' filed objections to Hoffer's declaration and its attached exhibits, contending, inter alia, the documents containing the arbitration provisions were not authenticated, Hoffer lacked personal knowledge, and Hoffer's comparison of the signatures on the arbitration provisions to other signatures in plaintiffs' personnel files lacked foundation and was improper expert opinion. Plaintiffs also opposed the other defendants' motion to join respondents' motion.
Respondents filed a reply disputing plaintiffs' arguments. Respondents contended, inter alia, that SOI engaged in interstate commerce and therefore the FAA applied to the arbitration provision. Respondents cited a supplemental declaration from Hoffer stating that SOI purchased supplies from vendors outside of California, used interstate communication networks, and provided services to clients outside of California.
2. Trial court's ruling
On February 21, 2019, the trial court held a hearing on respondents' motion and took the matter under submission. Respondents' counsel requested a statement of decision should the trial court deny the motion. Plaintiffs did not request a statement of decision.
The trial court then issued a written order granting respondents' and joining defendants' motions to compel arbitration. The trial court did not indicate that the written order constituted a statement of decision.
The court began its written order by overruling plaintiffs' objections to the Hoffer declaration. The court then found the FAA governed the arbitration provision, based on Hoffer's supplemental declaration as well as the fact that plaintiffs worked as drivers for Star Fisheries, a seafood producer and distributor.
Addressing plaintiffs' specific arguments against compelling arbitration, the trial court concluded plaintiffs' "selfserving declarations" claiming they had never signed the arbitration provision were insufficient to overcome Hoffer's declaration and its supporting exhibits. The court noted it had provided the parties an opportunity to brief whether the court should hear live testimony on the validity of the arbitration provisions, and plaintiffs had filed nothing in response.
The trial court found that the motion satisfied the California Rules of Court by attaching the arbitration provision to the Hoffer declaration and quoting the relevant language from that provision.
The trial court ruled plaintiffs' causes of action were arbitrable: the FAA preempted state law barring arbitration of plaintiffs' causes of action for unpaid wages, and plaintiffs' cause of action under the CLRA sought private damages, not public injunctive relief, and therefore was arbitrable.
The trial court found the arbitration provision had a "small degree of procedural unconscionability" in that it was an adhesive agreement that did not attach a copy of any arbitration rules. The court found "no other indication of oppression." As to substantive unconscionability, the court disagreed with plaintiffs that the arbitration provision placed any limits on discovery. To the extent it was unconscionable to require plaintiffs to bear any costs unique to arbitration, the court noted the arbitration provision stated that requirement applied only if not prohibited by law; because California law barred such a requirement, by the very terms of the arbitration provision the requirement did not apply and could not support a finding of unconscionability.
The trial court rejected plaintiffs' laches and unclean hands argument, which the court found plaintiffs had not supported with legal authority.
The trial court found Star Fisheries could join the motion to compel arbitration as a party named in the arbitration provision, and Amlease, DiMaggio, Golden, and Swain could invoke the arbitration provision as well because of plaintiffs' allegations of an agency relationship among the defendants. The court rejected the argument that the defendants other than respondents had waived the right to arbitrate. Although Acuna had not joined in the motion to compel arbitration and thus the claims against her remained in court, the court found plaintiffs had not identified any potential conflict that would arise by allowing the other defendants to arbitrate the claims against them.
3. Arbitration and judgment
The parties proceeded to arbitration. In June 2020, respondents filed a petition to confirm an arbitration award. The petition attached an order from the arbitrator dismissing the complaint against respondents with prejudice because plaintiffs had failed to comply with the arbitrator's orders concerning, inter alia, discovery and the filing of an amended complaint. The petition attached a second order in which the arbitrator awarded respondents costs of $870. Plaintiffs did not file opposition to the petition.
The trial court granted the petition and entered judgment dismissing respondents with prejudice and awarding them costs per the arbitrator's orders.
In addition to confirming the award in favor of respondents, the trial court dismissed Acuna with prejudice on plaintiffs' oral motion. A minute order indicated plaintiffs' arbitration against the other defendants remained pending.
Plaintiffs timely appealed.
DISCUSSION
On appeal, plaintiffs contend the trial court erred by compelling arbitration of their causes of action. (Cox v. Bonni (2018) 30 Cal.App.5th 287, 299 (Cox) ["An order granting a petition to compel arbitration may be reviewed on appeal from a subsequent judgment on the award."].) Plaintiffs do not otherwise challenge the arbitration award or the trial court's confirmation of that award. We discuss each of plaintiffs' arguments below.
A. The Motion To Compel Arbitration Complied With the Rules of Court
California Rules of Court, rule 3.1330 (rule 3.1330) provides that a motion to compel arbitration "must state . . . the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must by physically or electronically attached to the petition and incorporated by reference." Plaintiffs' contend respondents' motion failed to comply with this rule: "Respondents did not state verbatim the provisions of the purported arbitration agreements, nor did they incorporate the provisions by reference in their entirety."
This argument is unsupported by the record. Hoffer's declaration attached the arbitration provisions in full, and respondents' motion cited to that declaration and its exhibits. The motion quoted verbatim the portion of the arbitration provision identifying who was bound by the provision and what claims must be resolved through binding arbitration, again citing Hoffer's declaration and its attached exhibits. This was enough to satisfy rule 3.1330.
B. There Was Substantial Evidence of Valid Arbitration Agreements
Plaintiffs challenge the trial court's finding that respondents proved the existence of valid arbitration agreements. "We review for substantial evidence a trial court's determination that a valid arbitration agreement exists between the parties." (Cox, supra, 30 Cal.App.5th at p. 299.) "Under this standard, '[w]e infer all necessary findings supported by substantial evidence [citations] and "construe any reasonable inference in the manner most favorable to the judgment, resolving all ambiguities to support an affirmance" ....' [Citation.]" (Id. at p. 300.) We do not reweigh evidence or assess witness credibility. (Bruno v. Hopkins (2022) 79 Cal.App.5th 801, 823.) We review the trial court's evidentiary rulings for abuse of discretion. (Daimler Trucks North America LLC v. Superior Court (2022) 80 Cal.App.5th 946, 960.)
Plaintiffs argue that respondents did not offer competent evidence rebutting plaintiffs' declarations claiming their signatures on the arbitration provisions were fabricated. Specifically, plaintiffs argue Hoffer, respondents' declarant, did not personally observe plaintiffs sign, nor was she competent to testify to the authenticity of their signatures.
Regardless of whether Hoffer was competent to testify to the authenticity of plaintiffs' signatures, she provided evidence from which the trial court could make its own assessment. Under Evidence Code section 1417, "The genuineness of handwriting, or the lack thereof, may be proved by a comparison made by the trier of fact with handwriting (a) which the court finds was admitted or treated as genuine by the party against whom the evidence is offered or (b) otherwise proved to be genuine to the satisfaction of the court."
Hoffer's declaration attached other documents from plaintiffs' personnel files bearing their signatures, including their federal I-9 and W-4 forms. Plaintiffs offered no evidence challenging the authenticity of the signatures on the other documents. The trial court therefore had no basis to conclude the signatures on the other documents were not genuine, and could determine the authenticity of the signatures on the arbitration provisions by comparing them to the unchallenged signatures on the other documents. The signatures on the other documents are substantial evidence of the authenticity of the signatures on the arbitration provisions.
Even assuming arguendo the signatures on the other documents were not properly authenticated, plaintiffs had provided the trial court with unquestionably authentic signatures, because they had signed their own declarations in support of their opposition to the motion to compel arbitration. Respondents noted this fact in their reply below, listing among the evidence establishing the validity of the signatures plaintiffs' "own opposition declarations." (Italics omitted.) The signatures on the declarations also are substantial evidence in support of the trial court's conclusion that the signatures on the arbitration provisions were plaintiffs' own signatures.
Although the trial court did not state specifically in its written order that it had conducted its own comparison of the signatures, it did not indicate it had not done so. Under the applicable standard of review, we imply all findings necessary to support the trial court's decision. (Cox, supra, 30 Cal.App.5th at p. 300.) A statement of decision will obviate the doctrine of implied findings, but plaintiffs did not request a statement of decision in this case, nor did the trial court indicate that its written order constituted a statement of decision. (Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 268 ["a trial court's tentative or memorandum decision is no substitute for a statement of decision"].)
We express no opinion on whether a party may request a statement of decision when a court grants a motion to compel arbitration.
Plaintiffs argue the "signatures vary widely" between the arbitration provisions and the other documents submitted in this case. This comparison was for the trial court, as finder of fact, to make. Nor do we disagree with the trial court's determination that the signatures matched-on our own review, the signatures on the arbitration provisions appear to match those on plaintiffs' declarations.
Plaintiffs argue because Hoffer did not state she was a "custodian of records," she failed to establish personal knowledge of the documents attached to her declaration. The case plaintiffs cite in support, Sanchez v. Hillerich & Bradsby Co. (2002) 104 Cal.App.4th 703, concerned the foundational requirements for the business records hearsay exemption under Evidence Code section 1271. (Sanchez, at pp. 719-720.) On appeal, plaintiffs make no argument that the documents attached to Hoffer's declaration were hearsay, so Sanchez is inapposite. To the extent plaintiffs contend Hoffer lacked personal knowledge to authenticate the documents as coming from plaintiffs' personnel files, we disagree-Hoffer stated she had access to, and was familiar with SOI's business records, and that she personally reviewed the records in plaintiffs' files.
Plaintiffs contend the trial court erred by finding the arbitration provisions valid without following a three-step process enunciated in the case law. Under that process, the party seeking to compel arbitration first "bears the burden of producing 'prima facie evidence of a written agreement to arbitrate the controversy.' [Citation.]" (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.) Assuming this burden is met, at the second step "the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement," for example by "declar[ing] under penalty of perjury . . . that the party never signed . . . the agreement." (Ibid.) "If the opposing party meets its burden of producing evidence, then in the third step, the moving party must establish with admissible evidence a valid arbitration agreement between the parties. The burden of proving the agreement by a preponderance of the evidence remains with the moving party." (Id. at pp. 165-166.)
Plaintiffs argue the trial court failed to follow the three-step process because it "did not require Respondents to provide any evidence rebutting Appellant's declarations or establishing 'with admissible evidence a valid arbitration agreement between the parties.' [Citation.]" As discussed, respondents did provide admissible evidence establishing the validity of the arbitration provisions, namely the signed provisions themselves along with other documents from which the trial court could determine the signatures were genuine. The trial court weighed this evidence against plaintiffs' declarations stating the signatures were fabricated, which the trial court did not find credible. The trial court's analysis satisfied the three-step process.
Plaintiffs argue, "[T]he Trial Court should have viewed Respondents' evidence with mistrust" because respondents did not provide a declaration from Acuna, the Star Fisheries employee who provided plaintiffs with their new-hire paperwork. This argument goes to the weight of the evidence, which is not a proper consideration on appeal. To the extent plaintiffs are suggesting respondents were required to provide a declaration from someone who actually witnessed plaintiffs sign the arbitration provisions, plaintiffs cite no supporting authority, and such a rule would be impracticable.
Plaintiffs contend the trial court abused its discretion by overruling their objections to Hoffer's declaration, which stated that the signatures on the arbitration provisions matched signatures on other documents in the new hire packets and/or attached to Hoffer's declaration. In overruling the objections, the trial court cited Evidence Code section 1416, which provides that "[a] witness who is not otherwise qualified to testify as an expert may state his opinion whether a writing is in the handwriting of a supposed writer if the court finds that he has personal knowledge of the handwriting of the supposed writer." Plaintiffs argue Hoffer never established she had personal knowledge of plaintiffs' handwriting, just that she had seen other signatures in their personnel files she believed matched those on the arbitration agreements.
Plaintiffs, however, fail to recognize that the Hoffer declaration attached the documents on which Hoffer based the comparison, and therefore the trial court could draw its own conclusions pursuant to Evidence Code section 1417. We need not address whether her own comparison of the signatures was valid under Evidence Code section 1416.
C. Respondents Did Not Have To Sign the Arbitration Provision In Order To Enforce It
Plaintiffs argue the arbitration provisions, even if signed by plaintiffs, are unenforceable because no representative of respondents signed them. "[T]he writing memorializing an arbitration agreement need not be signed by both parties in order to be upheld as a binding arbitration agreement." (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 176.) In Serafin, the court deemed enforceable an arbitration agreement signed by only one party when the nonsigning party had drafted the agreement, and "evince[d] an intent to be bound by the arbitration agreement when it invoked the arbitration process," including by filing a motion to compel arbitration. (Id. at pp. 176-177.) Here, SOI drafted the arbitration provision and satisfied its obligations under it by invoking the right to arbitrate in response to plaintiffs' complaint. As in Serafin, this was sufficient to confirm SOI's intent to be bound by the arbitration provision, even without a signature.
D. Plaintiffs Fail To Show Their Causes of Action Against Respondents Were Not Arbitrable
Plaintiffs challenge the trial court's conclusion that their causes of action against respondents were arbitrable. We reject this challenge.
Plaintiffs argue that under Labor Code section 229, their claims for unpaid wages cannot be subject to arbitration. (See Lab. Code, § 229 ["Actions . . . for the collection of due and unpaid wages . . . may be maintained without regard to the existence of any private agreement to arbitrate"].) Plaintiffs further contend the trial court erred in concluding the FAA applied to the arbitration provision and preempted Labor Code section 229.
We need not decide whether the FAA applies to the arbitration provision and preempts Labor Code section 229, because plaintiffs did not assert any causes of action "for the collection of due and unpaid wages" (Lab. Code, § 229) against respondents. Only the fifth cause of action in the complaint alleged violations of the Labor Code and wage orders, including denial of overtime and vacation pay, and plaintiffs asserted that cause of action solely against Star Fisheries, not respondents. Labor Code section 229 thus is inapplicable to the causes of action against respondents. Star Fisheries is not party to this appeal, and we therefore decline to decide whether the fifth cause of action is arbitrable or, more broadly, whether the FAA applies to the arbitration provision in the instant case.
Plaintiffs argue under McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, their cause of action under the CLRA is not subject to arbitration. McGill explained that the CLRA provides for two forms of injunctive relief-private injunctive relief, which "primarily 'resolve[s] a private dispute'" and" 'rectif[ies] individual wrongs,'" and public injunctive relief, which" 'by and large' benefits the general public [citation] and . . . benefits the plaintiff, 'if at all,' only 'incidental[ly]' and/or as 'a member of the general public' [citation]." (Id. at p. 955.) McGill affirmed a rule from earlier cases that "[a]greements to arbitrate claims for public injunctive relief under the CLRA . . . are not enforceable in California" (id. at p. 956), and further held that an arbitration provision waiving the right to seek public injunctive relief similarly is unenforceable (id. at p. 952).
McGill has no application here, because plaintiffs do not seek public injunctive relief under the CLRA. Their CLRA cause of action does not assert claims for injunctive relief at all, but instead "seeks all damages allowed pursuant to the" CLRA, including for "lost wages, emotional distress . . ., and other general and special damages, including lost interest." None of this suggests plaintiffs are seeking relief for the benefit of the public at large. Plaintiffs do not argue or cite authority that private claims for damages under the CLRA are not arbitrable, and thus fail to show the trial court erred by compelling them to arbitrate their CLRA cause of action. (In re Tobacco Cases II (2015) 240 Cal.App.4th 779, 808 [failure to provide argument, citations to the record, and legal authority waives issue].)
Plaintiffs argue, "[M]ost claims in equity cannot be waived," nor can claims under the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA). Assuming arguendo plaintiffs accurately characterize the law, plaintiffs identify no language in the arbitration provision purporting to waive their right to bring equitable claims or claims under FEHA, nor can we discern such language. Plaintiffs do not argue or cite authority that equitable and FEHA claims are not arbitrable. This argument thus fails.
Plaintiffs argue that resolution of their nonarbitrable causes of action might have rendered arbitration of their other causes of action unnecessary, and the trial court should have denied the motion to compel arbitration until the nonarbitrable claims were resolved. (See Code Civ. Proc., § 1281.2 [if determination of nonarbitrable issues "may make the arbitration unnecessary, the court may delay its order to arbitrate until the determination" of the nonarbitrable issues].) Plaintiffs have failed to show that any of the causes of action against respondents were not arbitrable. Assuming arguendo any of the causes of action against the other defendants was not arbitrable, plaintiffs merely cite Code of Civil Procedure section 1281.2 without explaining how resolution of the purportedly nonarbitrable claims would make arbitration of the other claims unnecessary. This is insufficient to show error on appeal.
E. The Arbitration Provision Is Not Unconscionable
Plaintiffs argue the arbitration provision was unconscionable and thus unenforceable. Although we agree plaintiffs have established some level of procedural unconscionability, plaintiffs have not shown the arbitration provision was substantively unconscionable, and thus their argument fails.
1. Applicable law
" 'California law . . . favors enforcement of valid arbitration agreements[,]'" and courts may decline to enforce them only on the same grounds as for other contracts. (Lange v. Monster Energy Co. (2020) 46 Cal.App.5th 436, 444-445; accord, Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97-98 (Armendariz).) "Unconscionability in a contract is one reason a court may decline enforcement." (Lange, at p. 445.)
"A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party. [Citation.] Under this standard, the unconscionability doctrine' "has both a procedural and a substantive element."' [Citation.] 'The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power. [Citations.] Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided.' [Citation.]" (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125 (OTO).)
"Both procedural and substantive unconscionability must be shown for the defense to be established, but 'they need not be present in the same degree.' [Citation.] Instead, they are evaluated on' "a sliding scale."' [Citation.] '[T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to' conclude that the term is unenforceable. [Citation.] Conversely, the more deceptive or coercive the bargaining tactics employed, the less substantive unfairness is required." (OTO, supra, 8 Cal.5th at pp. 125-126.)
"The burden of proving unconscionability rests upon the party asserting it." (OTO, supra, 8 Cal.5th at p. 126.) "Whether an agreement is unconscionable presents a question of law which we review de novo." (Williams v. Atria Las Posas (2018) 24 Cal.App.5th 1048, 1055.)" '[T]o the extent,'" however," 'the trial court's determination that the arbitration agreement was unconscionable turned on the resolution of conflicts in the evidence or on factual inferences to be drawn from the evidence, we consider the evidence in the light most favorable to the trial court's ruling and review the trial court's factual determinations under the substantial evidence standard.' [Citation.]" (Ibid.)
2. Analysis
The trial court found, and we agree, that plaintiffs established some level of procedural unconscionability. "A procedural unconscionability analysis 'begins with an inquiry into whether the contract is one of adhesion'" (OTO, supra, 8 Cal.5th at p. 126), and there can be "little dispute" that a contract is one of adhesion where it is "imposed on employees as a condition of employment" with "no opportunity to negotiate" (Armendariz, supra, 24 Cal.4th at pp. 114-115).
Although not argued below, on appeal, plaintiffs also contend the provision was procedurally unconscionable because it was" 'hidden in a prolix printed form drafted by the party seeking to enforce'" it. (See OTO, supra, 8 Cal.5th at p. 126.) We agree this is a factor supporting procedural unconscionability. The arbitration provision is the fourth of eight paragraphs on a page containing over a thousand words of text in small font. The paragraphs have no headings identifying their subject matter, and cover a wide variety of topics including illegal discrimination and harassment, the employee's obligation to report violations of labor laws and other statutes, drug testing, at-will employment, and acknowledgement of receipt of the employee handbook and documents concerning work-related injuries and paid family leave. Overall, this presentation makes it unnecessarily difficult to locate the arbitration provision on the page that contains it.
We disagree with plaintiffs that the failure of respondents to attach arbitration rules to the arbitration provision was a factor supporting procedural unconscionability. The arbitration provision did not specify any particular arbitration provider, and therefore there were no applicable rules to attach.
Despite the above supporting a finding of procedural unconscionability, we nonetheless conclude plaintiffs have failed to demonstrate any substantive unconscionability that would render the arbitration provision unenforceable.
Plaintiffs argue the provision is substantively unconscionable because it forces them to waive their rights under FEHA and the CLRA. As we have explained ante, plaintiffs have identified no language in the provision waiving their rights under FEHA, nor do they identify any language waiving their rights under the CLRA.
Plaintiffs claim the clause requiring them to bear half the cost of the arbitration is unconscionable. Plaintiffs' characterization of the clause is incorrect-the language requires them to bear half the cost "[u]nless prohibited by law." Under California law, "when 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." (Armendariz, supra, 24 Cal.4th at pp. 110-111, italics omitted.) This means the employer must "pay all types of costs that are unique to arbitration." (Id. at p. 113.) Because California law prohibits the imposition of costs unique to arbitration on plaintiffs, the cost-sharing clause of the arbitration provision by its express terms does not apply, and cannot support a finding of substantive unconscionability.
Plaintiffs argue Abramson v. Juniper Networks, Inc. (2004) 115 Cal.App.4th 638 holds to the contrary, but that case is distinguishable. In Abramson, the arbitration agreement stated the parties "shall each pay one-half of the costs and expenses of . . . arbitration." (Id. at p. 664, fn. 3.) Distinguishing Armendariz, in which the arbitration agreement at issue "was silent on the question of costs," the Court of Appeal in Abramson held the agreement "does not permit an inference that the employer is to pay," and thus "the cost-sharing provision . . . is illegal and unenforceable." (Id. at p. 661.)
In contrast to Abramson, the cost-sharing provision in the instant case contains an express caveat rendering it inoperative if it is contrary to law. That caveat, absent in Abramson, preserves the legality of the arbitration provision. We further note that respondents stated in their motion to compel arbitration they would pay all costs unique to arbitration, to the extent there was any doubt as to the effect of the caveat.
Plaintiffs argue the arbitration provision is "designed to make the arbitral process completely inaccessible to the average employee" because the provision does not explain how to initiate an arbitration or what rules will apply. Plaintiffs cite no authority that the lack of such information renders an arbitration provision unconscionable. The absence of information about initiating an arbitration is of little moment given that most laypersons do not know how to initiate a court action either, and rely instead on their attorneys to do so. If anything, the lack of specificity grants an employee (and counsel, if retained) the freedom to negotiate with SOI what arbitration provider to use and what rules to apply, which is beneficial to the employee.
Plaintiffs argue the arbitration provision is one-sided because it requires employees "to travel to the 'capital or largest city of the state' . . . while permitting Respondents to 'appear by phone.'" Again, plaintiffs cite no authority that such language renders an arbitration agreement unconscionable. Also, again, plaintiffs mischaracterize the language, which states the arbitration may take place in "another mutually agreed location," thus allowing an employee to negotiate the location of the arbitration. As for the provision allowing SOI to appear by phone, plaintiffs do not explain how this is disadvantageous to them.
Plaintiffs contend the arbitration provision is unconscionable because it does not provide expressly for any discovery. In Armendariz, our Supreme Court held that "when parties agree to arbitrate statutory claims, they also implicitly agree, absent express language to the contrary, to such procedures as are necessary to vindicate that claim," including "discovery sufficient to adequately arbitrate [a] statutory claim." (Supra, 24 Cal.4th at p. 106.) As plaintiffs concede, the arbitration provision in the instant case is silent as to discovery, and thus the parties have implicitly agreed to allow discovery sufficient to arbitrate plaintiffs' claims.
F. The Trial Court Did Not Abuse Its Discretion Under Code of Civil Procedure Section 1281.2, Subdivision (C)
A court may decline to order parties to arbitration if "[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact." (Code Civ. Proc., § 1281.2, subd. (c).) Plaintiffs contend the trial court erred by compelling arbitration when defendant Acuna was not a party to the arbitration, thus giving rise to the possibility of conflicting rulings if the lawsuit against Acuna proceeded in court. We review the trial court's ruling on this issue for abuse of discretion. (Rowe v. Exline (2007) 153 Cal.App.4th 1276, 1283.)
As the trial court found, plaintiffs have failed to explain how proceeding with arbitration without Acuna's participation creates a possibility of conflicting rulings on a common issue of law or fact. Plaintiffs instead invoke Code of Civil Procedure section 1281.2, subdivision (c) without applying it to the facts of the instant case. Plaintiffs argue they are not required to "prove a specific conflict of ruling that would result, only that the possibility exists." Still, plaintiffs must make some effort to describe the common issue that could give rise to conflicting rulings. It is not the trial court's obligation, nor ours, to analyze the pleadings to see if there is a possibility of conflict.
Assuming arguendo plaintiffs established the possibility of conflicting rulings, plaintiffs' argument nonetheless fails because declining to enforce the arbitration agreement is only one of several choices when Code of Civil Procedure section 1281.2, subdivision (c) applies. A court may also "order arbitration among the parties who have agreed to arbitration and stay the pending court action . . . pending the outcome of the arbitration proceeding." (Code Civ. Proc., § 1281.2.) Here, at the time respondents filed their motion to compel arbitration, Acuna had not answered the complaint or otherwise appeared. The trial court in fact issued an order to show cause regarding her dismissal at the same time it ordered the parties to arbitration. Under these circumstances, it would have made little sense to prevent the appearing parties from arbitrating when it was unclear if Acuna would even be part of the lawsuit. Plaintiffs fail to show the trial court abused its discretion.
DISPOSITION
The judgment is affirmed. Respondents are awarded their costs on appeal.
We concur: CHANEY, J., WEINGART, J.