Opposition ObjectionsCal. Super. - 6th Dist.October 29, 201810 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GAUTAM DUTTA, ESQ. (State Bar N0. 199326) Business, Energy, and Election Law, PC 1017 E1 Camino Real # 504 Redwood City, CA 94063 Telephone: 415.236.2048; Fax: 213.405.2416 Email: Dutta@BEELawFirm.com Attorneys for Plaintiff HAONING RICHTER Electronically Filed by Superior Court of CA, County of Santa Clara, on 4/19/2019 10:14 PM Reviewed By: Tunisia Turner Case #1 SCV3371 94 Envelope: 2784530 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA HAONING RICHTER, Plaintiffl VS. ORACLE AMERICA, INC, et al., Defendants. I. Introduction Dept: CASE NO. 18-CV-337194 OPPOSITION T0 PLAINTIFF HAONING RICHTER’S DEFENDANTS’ PETITION TO COMPEL ARBITRATION AND STAY COURT PROCEEDINGS; POINTS AND AUTHORITIES Hearing Date: May 2, 2019, 9 am 8 (Hon. Sunil Kulkarni) Setting aside Defendants’ desperate, improper citation 0f Superior Court cases,‘ the Court must deny their ill advised, meritless bid t0 deprive Haoning Richter 0f a public, judicial forum for four reasons. First, as Ms. Richter’s accompanying Objections show, Defendants have failed to establish that she approved any arbitration agreement. Second, and alternatively, n0 arbitration agreement was formed as a matter 0f law, under the binding precedent of Flores v. Nature ’s Best Distribution .2 1 See Ms. Richter’ s accompanying Objections (“Objections”) to the (l) Orozco Decl. (2) Defendants Request for Judicial Notice and (3) Defendants Memorandum of Points and Authorities 111110, 11. 2 Flores v Nature’s Best Distribution, LLC (2016) 7 Cal App. 5th 1, 8- 11. OPPOSITION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 2 - OPPOSITION Third, and alternatively, the purported arbitration agreement (the “Purported Agreement”) is unenforceable, for it was both procedurally and substantively unconscionable. Finally, and alternatively, Ms. Richter is entitled to bring her claims under the Unfair Competition Law and the Private Attorney General Act to a public, judicial forum. II. Brief Factual Background3 This case of corporate wrongdoing - where a member of the senior management team was retaliated against and terminated simply for doing her job - spotlights the deficient compliance culture, lack of management accountability and control, and toxic work environment at one of the world’s leading tech companies: Defendant Oracle America, Inc. (“Oracle”). Plaintiff Haoning Richter, an Asian American born in China, joined Oracle as Audit Director for Oracle’s Global Real Estate and Facilities organization on June 17, 2013. In that capacity, Ms. Richter reported to Oracle Vice President Randall Smith, who reports directly to Oracle CEO Safra Catz. Oracle terminated Ms. Richter’s employment on Nov. 7, 2017. In 2013, to address a number of significant compliance issues, Oracle CEO Safra Catz approved the creation of the position of Audit Director within the Global Real Estate and Facilities organization. Each year during her tenure, Ms. Richter received positive, written performance reviews, and was awarded a number of performance-related stock bonuses. In Mar. 2017, Oracle selected Ms. Richter to join Oracle’s invitation-only, Accelerated Executive Insight program. Ms. Richter was the only employee chosen to represent her Global Real Estate and Facilities organization, which has over 1,000 employees. Throughout her tenure, Ms. Richter endured a series of retaliatory actions for simply doing her job. Just as one example, in Dec. 2016, Ms. Richter heard from two different sources that Vice President Ken Heth and Director of Operations Patrizia Muckle - two top officials in Oracle’s Japan and Asia Pacific region - were using proprietary process documents belonging to SAP. Ms. Richter shared, with Vice President Randall Smith (her supervisor), the information 3 All facts derive from Ms. Richter’s Oct. 29, 2018 Complaint. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 3 - OPPOSITION regarding the use of SAP’s proprietary documents. In response, Mr. Smith instructed Ms. Richter not to perform any investigation of the matter, and told her that he would raise the issue with Mr. Heth and Ms. Muckle. Subsequently, after engaging in a protracted, animated email exchange with Ms. Richter, Mr. Heth publicly humiliated Ms. Richter at an Apr. 26, 2017 audit kickoff meeting, in front of one of her subordinates and a group of Oracle directors, managers, and individual contributors. Shortly before she was fired, Ms. Richter was subjected to a brutal, 45-minute telephone interrogation regarding items from her prior expense reports. During that call, Oracle Senior Employment Practices Consultant Mark Lane explicitly referred to the fact that Ms. Richter is a first-generation immigrant: “You are not from this country. How long have you been here? How many places have you lived?” Referring to the country where Ms. Richter was born, Mr. Lane then sneered: “I know your country has this gift culture.” Throughout the call, Mr. Lane subjected Ms. Richter to an inappropriate, faux-Perry Mason-style interrogation, which consisted of repeated - and picayune - questions that implied that she had committed grave wrongdoing. Just as one example, Mr. Lane asked: “You expensed a lot of coffee. You purchased a coffee tumbler at Peet’s Coffee in 2016. Why did you do that?” One month before Ms. Richter was terminated, Mr. Smith had authorized her to fly to Dublin, Ireland to conduct a joint construction project with the PWC audit team. Ms. Richter had made a roundtrip flight reservation for Nov. 6, 2017 - the Monday after she was terminated - to fly from the Bay Area to Dublin, Ireland in order to perform the on-site audit with the PWC team. Ms. Richter's sudden disappearance gravely damaged her reputation and employment prospects within and outside of Oracle - especially in the tightly knit audit community, in which Oracle, PWC, and KPMG play outsized roles. Ms. Richter has experienced profound pain and sadness to this day, and still has difficulty sleeping. III. Procedural Background Ms. Richter filed her Complaint against (1) Oracle, and (2) Oracle Executive Vice President Joyce Westerdahl as a statutory employer pursuant to Labor Code §558.1. Ms. Richter 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 4 - OPPOSITION brought causes of action for Retaliation (violation of the Fair Employment and Housing Act, “FEHA”) (against Oracle),4 Retaliation (violation of public policy) (against Oracle), Intentional Infliction of Emotional Distress (against Oracle), Discrimination5 (against Oracle), Failure to Pay Wages6 (against Oracle and Ms. Westerdahl), Failure to Produce Employment Records7 (against Oracle), Failure to Produce Wage Statements8 (against Oracle and Ms. Westerdahl), and Violation of the Unfair Competition Law9 (against Oracle). Defendants claim that Ms. Richter approved a purported arbitration agreement (the “Purported Agreement”, attached as Orozco Decl. Exh. 1). However, Ms. Richter did not sign that document, and neither her name nor her signature appears on that document.10 Ms. Richter does not recall seeing, being presented with, or approving that document before or during her employment with Oracle.11 In their Jan. 22, 2019 Case Management Statement, Defendants claimed that all but one of Ms. Richter’s claims must be arbitrated. In a detailed, proactive meet-and-confer letter,12 Ms. Richter’s counsel asked Defendants’ counsel to call him if they wished to discuss the arbitration matter. Instead of doing so, Defendants filed their pending Petition. IV. Legal Analysis A. Defendants Have Failed to Establish That Ms. Richter Approved Any Arbitration Agreement At the outset, this Petition must be summarily denied, for Defendants have failed to establish that Ms. Richter approved any arbitration agreement. As Ms. Richter’s detailed Objections show, the following proffered evidence is inadmissible on a number of grounds (including hearsay, lack of foundation, and lack of authentication): (1) the Purported Agreement, 4 Gov’t Code §§12900, et seq. 5 Gov’t Code §§12900, et seq. 6 Labor Code §203, §2699. 7 Labor Code §1198.5. 8 Labor Code §226. 9 Bus. & Prof. Code §§17200, et seq. 10 Richter Decl. ¶3. 11 Richter Decl. ¶3. 12 A copy of Ms. Richter’s meet-and-confer letter was attached as Exh. 1 to the Ritter Decl. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 5 - OPPOSITION (2) the purported screenshot (the “Purported Screenshot”) that, according to Defendants, shows that Ms. Richter’s approved the Purported Agreement, and (3) the parts of the Orozco Declaration concerning the Purported Agreement, the Purported Screenshot, and Ms. Richter’s purported approval of the Purported Agreement.13 Because none of that evidence is admissible, Defendants have failed to establish that Ms. Richter approved any arbitration agreement, let alone the Purported Agreement. Accordingly, Defendants’ Petition must be summarily denied. B. Alternatively, No Arbitration Agreement Was Formed as a Matter of Law Alternatively, no arbitration agreement was formed as a matter of law, under the binding precedent of Flores.14 “California contract law applies to determine whether the parties formed a valid agreement to arbitrate.”15 The party seeking to compel arbitration bears the burden of proving, by a preponderance of the evidence, that a valid arbitration agreement was formed; and the opposing party bears the burden of proving any defense, by a preponderance of the evidence.16 As the Court of Appeal recently held in Flores,17 a valid arbitration agreement is not formed, due to ambiguity, where (1) the document fails to identify which particular set of arbitration rules would govern the arbitration; or (2) the document fails to properly define the scope of the arbitration provision; or (3) the document does not contain the signatures and names of (a) the legal entity that is the employer, and (b) the employee.18 The Court of Appeal thus ruled that even though the plaintiff’s signature appeared on the document, no arbitration agreement had been formed as a matter of law.19 Here, the Purported Agreement does not constitute a valid arbitration agreement under 13 See Ms. Richter’s accompanying Objections, at ¶¶1-9. 14 Flores, 7 Cal.App.5th at 8-11. 15 Id. at 9 (italics added, internal quotation marks omitted) (quoting Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164, 1170); accord, City of Vista v. Sutro & Co. (1997) 52 Cal.App.4th 401, 407. 16 Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, 1106; see also Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236. 17 Flores, 7 Cal.App.5th at 8-11. 18 Id. at 8-11. 19 Id. at 9. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 6 - OPPOSITION Flores. First, like the agreement at issue in Flores, the Purported Agreement fails to specify which particular set of arbitration rules would govern the arbitration.20 Here, the Purported Agreement states that two different sets of arbitration rules could be used: (1) the “National Rules for the Resolution of Employment Disputes of the American Arbitration Association” (“AAA”), or (2) the “Employment Arbitration Rules and Procedures adopted by the Judicial Arbitration and Mediation Services (‘JAMS’).”21 In response, Defendants claim that there is no ambiguity as to which set of rules would apply, on the apparent ground that AAA and JAMS would each use its own respective arbitration rule.22 Yet in so doing, Defendants improperly assume that (1) the arbitration could only be conducted by either AAA or JAMS, and not by any other entity or person; and (2) AAA and JAMS would not use any other arbitration rule except their own. Because it fails to specify which particular set of arbitration rules would govern the arbitration, the Purported Agreement does not constitute a valid arbitration agreement under Flores. Second, the Purported Agreement fails to properly define the scope of the arbitration provision, for it contains contradictory terms. Specifically, in the first two paragraphs under the “Claims Not Covered” heading, the Purported Agreement exempts from arbitration a number of claims, including claims for intentional infliction of emotional distress (IIED).23 However, in the third paragraph under the same, “Claims Not Covered” heading, the Purported Agreement states that if any “temporary equitable relief is sought”, the “trial on the merits” of the entire action must be arbitrated.24 For example, if a plaintiff sought TRO relief from a court in connection with an IIED claim, she would be forced to arbitrate her entire case - including her “arbitration exempt” IIED claim. Because it contains contradictory terms as to 20 See id. at 10 (“[T]he Agreement also fails to identify which set of the [arbitration] rules would apply to binding arbitration.”) (italics added). 21 Orozco Decl. Exh. 1, at 2. 22 Moving Papers, at 6:21-6:23 (“[I]f the parties proceed with arbitration before JAMS, the JAMS employment rules apply; if the parties proceed with arbitration before AAA, the AAA employment rules apply.” (italics added). 23 Orozco Decl. Exh. 1, at 2 ¶¶1-2. 24 Orozco Decl. Exh. 1, at 2 ¶3 (“In such cases where temporary equitable relief is sought, the trial on the merits of the action will occur in front of, and will be decided by, the arbitrator[.]”) (italics added). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 7 - OPPOSITION which claims must be arbitrated and which claims need not be arbitrated, the Purported Agreement does not constitute a valid arbitration agreement under Flores. Finally, the Purported Agreement does not contain the signatures and names of (a) the legal entity that is the employer, and (b) the employee. As Flores admonished, a valid arbitration contract must “identify with which entity or entities plaintiff had agreed to submit” all disputes to arbitration.25 Here, beyond not containing anyone’s name or signature, it is undisputed that the Purported Agreement did not identify the full name of the legal entity that was Ms. Richter’s employer: Oracle America, Inc. To be sure, Defendants may argue that the term “Oracle” sufficiently identified the legal entity that was the employer. However, the term “Oracle” is itself ambiguous - not least because the names of at least six corporations share the word “Oracle”: Oracle Corporation, Oracle International Corporation, Oracle Global Holdings, Inc., Oracle Systems Corporation, Oracle Technology Company UC, and Defendant Oracle America, Inc.26 Moreover, in a related context, California law requires employer entities to identify themselves by their full name: namely, all employee paystubs must identify the “name and address of the legal entity that is employer”.27 Because the Purported Agreement is ambiguous as to the elements required for a valid arbitration agreement, no valid arbitration agreement was formed between Ms. Richter and Oracle, as a matter of law. C. Alternatively, the Purported Agreement Is Unenforceable Alternatively, the Purported Agreement is unenforceable, for it was both procedurally and substantively unconscionable. As the California Supreme Court admonished in Armendariz, an arbitration agreement is unenforceable if is both procedurally and substantively unconscionable.28 25 Flores, 7 Cal.App.5th at 9 (italics added). Contrary to Defendants’ claim, Flores did not turn on whether or not the plaintiff had signed the purported arbitration agreement. Indeed, it was undisputed that the plaintiff had signed the purported arbitration agreement at issue. Id. at 9. 26 Ms. Richter’s accompanying Request for Judicial Notice; Dutta Decl. ¶¶3, 4 & Exh. 1. 27 Labor Code §226(a)(8) (italics added). 28 Armendariz v. Foundation Health Psychcare Svcs., Inc. (2000) 24 Cal.4th 83, 114; see also Ramos v. Superior Court (2018) 28 Cal.App.5th 1042, 1063. Contrary to Defendants’ claim, Armendariz remains good law and is not preempted by the Federal Arbitration Act (“FAA”, 9 U.S.C. §§1, et seq.). E.g., McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 962-963; Ramos, 28 Cal.App.5th at 1055. In any event, under the Purported Agreement’s express terms, the FAA only 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 8 - OPPOSITION Procedural unconscionability “focuses on oppression or surprise due to unequal bargaining power”; while substantive unconscionability focuses on “overly harsh or one-sided results.”29 “The more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.”30 Here, the Purported Agreement was procedurally unconscionable, for it epitomizes a contract of adhesion “involv[ing] surprise or other sharp practices”.31 It is undisputed that Ms. Richter did not sign the Purported Agreement. As Ms. Richter’s accompanying Objections have shown, Defendants have failed to establish that Ms. Richter approved any arbitration agreement, let alone the Purported Agreement. Furthermore, as her accompanying Declaration shows, Ms. Richter does not recall seeing, being presented with, or approving the Purported Agreement before or during her employment with Oracle.32 Against this stark backdrop, there can be no doubt that the Purported Agreement constitutes a contract of adhesion “involving surprise” - because Defendants have failed to show that Ms. Richter was even aware of the Purported Agreement. Furthermore, the Purported Agreement was substantively unconscionable, for Defendants have failed to show that the Purported Agreement complied with the Armendariz requirements for arbitrating unwaivable statutory claims, such as those under FEHA:33 (1) a neutral arbitrator, (2) adequate discovery, (3) a written arbitration award, (4) all of the types of relief that would otherwise be available in court, and (5) a requirement that the employer pay for the arbitrator’s fees and expenses.34 As California courts have admonished, a contract that fails to comply with Armendariz’s “minimum requirements” is substantively unconscionable.35 applies to “arbitration proceedings”. Orozco Decl. Exh. 1, at 2 (italics added). 29 Ramos, 28 Cal.App.5th at 1063 (italics added, internal quotation marks omitted). 30 Id. at 1063 (italics added, internal quotation marks and brackets omitted); see also Farrar v. Direct Commerce, Inc. (2017) 9 Cal.App.5th 1257, 1265. 31 Ramos, 28 Cal.App.5th at 1063 (italics added). 32 Richter Decl. ¶3. 33 E.g., Lane v. Francis Capital Mgmt. LLC (2014) 224 Cal.App.4th 676, 687. Ms. Richter brings claims for Retaliation and Discrimination under FEHA. 34 Armendariz, 24 Cal.4th at 102. 35 Ramos, 28 Cal.App.5th at 1064-65; see also Armendariz, 24 Cal.4th at 115. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 9 - OPPOSITION Here, Defendants claim that the Purported Agreement complies with each of the Armendariz requirements, by citing to purported JAMS and AAA arbitration rules.36 Yet as Ms. Richter’s accompanying Objections show, the express, verbatim terms of those purported rules were not even proffered as evidence.37 Because it is both procedurally and substantively unconscionable, the Purported Agreement is unenforceable as a matter of law. Although courts have discretion to sever unconscionable arbitration provisions, California law bars such severance here - because there is “no single provision a court can strike or restrict in order to remove the unconscionable taint from the agreement.”38 As we have shown, Defendants have failed to show that the Purported Agreement complies with any of the Armendariz requirements. Because such pervasive “unconscionable taint” cannot be cured without “reform[ing]” the Purported Agreement’s terms, the Court must “find the agreement void as a matter of law.”39 D. Alternatively, Ms. Richter Is Entitled To Bring Her UCL and PAGA Claims to a Public, Judicial Forum Alternatively, Ms. Richter is entitled to a public, judicial forum for her (1) Unfair Competition Law (UCL)40 claim for public injunctive relief,41 and (2) her representative claim42 against Oracle and Ms. Westerdahl under the Private Attorney General Act (PAGA).43 The Parties agree that Ms. Richter cannot be compelled to arbitrate her PAGA claim. Moreover, as the California Supreme Court recently held, an arbitration provision is unenforceable if it requires a UCL claim for public injunctive relief to be arbitrated.44 Because the Purported Agreement bans Ms. Richter from bringing her UCL claim to a public, judicial forum, it is unenforceable with respect to her UCL claim. 36 See Moving Papers, at 5:17-5:25. 37 See Ms. Richter’s accompanying Objections, at ¶9. 38 Armendariz, 24 Cal.4th at 124-25 (italics added). 39 Ramos, 28 Cal.App.5th at 1069 (italics added); see also Armendariz, 24 Cal.4th at 125. 40 Bus. & Prof. Code §§17200, et seq. 41 Complaint ¶¶189-195. 42 Complaint ¶¶173-182. 43 Labor Code §§2698, et seq. 44 McGill, 2 Cal.5th 945, 952. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 10 - OPPOSITION Moreover, Ms. Richter’s PAGA claim should not be stayed, for it is severable from her non-UCL claims. If an arbitration agreement applies to some of a plaintiff’s claims, trial court need only stay the litigation with respect to those arbitrable claims - provided that those claims “subject to arbitration” are severable.45 Here, Ms. Richter’s PAGA claims46 against Oracle and Ms. Westerdahl concerns wage-payment issues that are distinct and severable from her non-UCL claims (concerning, inter alia, retaliation and discrimination). Therefore, Ms. Richter is entitled to bring her PAGA and UCL claims to a public, judicial forum V. Conclusion In short, Defendants have failed to show that Ms. Richter approved any arbitration agreement, let alone the Purported Agreement. Alternatively, California law squarely bars Defendants from depriving Ms. Richter of her right to adjudicate all of her claims in a court of law. Accordingly, Defendants’ Petition must be swiftly denied in its entirety. DATED: Apr. 19, 2019 BUSINESS, ENERGY, AND ELECTION LAW, PC By: /s/ Gautam Dutta GAUTAM DUTTA, ESQ. Attorneys for Plaintiff HAONING RICHTER 45 MKJA, Inc. v. 123 Fit Franchising, LLC (2011) 191 Cal.App.4th 643, 660-61; see also CCP §1281.4. 46 Complaint ¶¶173-182.
