DeclarationCal. Super. - 6th Dist.December 14, 201810 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sean T. Carter, Esq. (SBN 206365) THE CARTER LAW GROUP 2340 Powell Street, Suite 355 Emeryville, CA 94608 Tel: (650) 735-1090 Fax: (650) 472 - 8080 Email: sean@seancarter.us Attorney for Defendants STEVEN BOROCHOFF, an individual and BOROCHOFF MANAGEMENT CONSULTANTS, a business entity Electronically Filed by Superior Court of CA, County of Santa Clara, on 3/4/2019 12:07 PM Reviewed By: L. Nguyen Case #1 86V340059 Envelope: 2581603 SUPERIOR COURT 0F THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA UNLIMTED JURISDICTION EYERIS TECHNOLOGIES, INC, a business entity; Plaintiff, V. STEVEN BOROCHOFF, an individual, BOROCHOFF MANAGEMENT CONSULTANTS, a business entity, and DOES 1- 10 inclusive. Defendants. Casc N0. 18CV340059 DECLARATION OF DEFENDANTS COUNSEL SEAN T. CARTER IN SUPPORT OF DEFENDANTS STEVEN BOROCHOFF and BOROCHOFF MANAGEMENT CONSULTANTS’ MEMORANDUM & POINTS OF AUTHORITIES IN OPPOSITION TO PLAINTIFF’S MOTION TO COMPEL ARBITRATION Complaint filed: December 14, 2018 Hearing Date: March 19, 2019 Time: 9:00 a.m. Judge: Hon. Peter H. Kirwan Dept: 18 DECLARATION OF SEAN T. CARTER, ESQ. 2 DECLARATION OF SEAN T. CARTER, ESQ. 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 I, Sean T. Carter, declare: 1. I am an attorney at law licensed to practice in all of the courts of the state of California and the attorney of record for Defendants Steven Borochoff and Borochoff Management Consultants (a D/B/A). 2. I have personal knowledge of the matters set forth herein based on my representation of Steven Borochoff, my review of the case file, and my participation in this case. 3. All of the documents attached as exhibits are true and correct copies of the documents they purport to be. 4. I make this Declaration in support of Defendants Steven Borochoff and Borochoff Management Consultants’ Memorandum & Points of Authorities in Opposition to Plaintiff’s Motion to Compel Arbitration. 5. Modar Alaoui, the Chief Executive Officer of Eyeris Technologies, Inc. (“Company”) and his attorney, Ali A. Aalaei, have been fully apprised of Steven Borochoff’s labor claims against the Company since no later than December 13, 2016. Attached hereto as Exhibit A is a true and correct copy of a letter dated December 13, 2016, which I delivered to Ali A. Aalaei via electronic mail on the same date. 6. On February 8, 2018, I filed, on behalf of Steven Borochoff, an Initial Report of Claim and Supplemental Letter in Support of the Claim (collectively referred to as the “Labor Complaint”) with the Department of Labor Standards Enforcement (“DLSE”) -- Steven Borochoff v. Eyeris Technologies, Inc., State Case Number: WC-CM-459162. Attached hereto as Exhibit B is a true and correct copy of the Labor Complaint I filed. 7. The Labor Complaint seeks unpaid wages pursuant to, inter alia, California Labor Code § 226.8 (Misclassification) Labor Code § 204 (Unpaid Wages), Labor Code § 226 (Paystubs), Labor Code § 203 (Waiting Time Penalties); Labor Code § 218.6 (Interest) and Labor Code §§ 218.5(a), 1194(a) (Attorneys’ Fees/Costs). Attached hereto as Exhibit C, are a true and correct copies of the Initial Report of Claim, the Supplemental Letter in Support of the Claim (without attachments) and the form Labor Complaint as amended on May 17, 2018. 8. On December 13, 2018, I contacted the Van Nuys DLSE office to confirm that the DLSE hearing 3 DECLARATION OF SEAN T. CARTER, ESQ. 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 set for December 18, 2018, had in fact been cancelled and reset to January 14, 2019. A DLSE representative (“Matt”) advised me that on or about December 10, 2018, a representative of the Company contacted the DLSE and requested that the December 18, 2018 hearing be rescheduled. Attached hereto as Exhibit D, is a true and correct copy of my December 13, 2018 telephone call record. 9. Attached hereto as Exhibit E, is a true and correct copy of the Online Santa Clara Superior Court Docket Sheet dated February 4, 2019 relating to Eyeris Technologies, Inc. v. Steven Borochoff, et al. Superior Case No. 18CV340059 (“Judicial Complaint”). 10. On January 11, 2019, the Company filed a Motion to Compel Arbitration in the matter styled as Eyeris Technologies, Inc. v. Steven Borochoff, et al. Superior Case No. 18CV340059. On the same date, Counsel for the Company delivered, what appears to be, a facsimile directed to the attention of the “Labor Commissioner.” The document states, in relevant part, as follows: “To the Labor Commissioner administering the hearing on the above- referenced complaint [WC-CM-459162]: A motion to compel arbitration has been filed in Santa Clara County Superior Court under the parties’ agreement to arbitration [sic] their dispute. It is included herewith. Please take the hearing on the complaint off calendar pending the resolution of the motion to compel under the authority of Oto, LLC v. Kho, (107) 14 Cal. App. 5 th 691, 699-901.” Attached hereto as Exhibit F, is a true and correct copy of the facsimile document prepared by the Company’s attorneys. In the exercise of caution, I communicated with the DLSE and conceded to the Company’s request to take the matter off calendar. 11. On January 29, 2019, “Rosette,” who is the assistant to DLSE Hearing Officer Joseph Levy, contacted me by phone and advised me that the Labor Complaint is stayed until the DLSE hears from Steven Borochoff regarding the status of the Motion to Compel Arbitration. Attached hereto as Exhibit G, is a true and correct copy of the telephone record evidencing the January 29, 2019 telephone call. 12. Attached hereto as Exhibit H, are true and correct copies of records captured on the California Secretary of State Business Search Online Portal regarding the “STATUS” of the Company on or about October 6, 2016, January 26, 2017, January 24, 2018 and January 11, 2019. 4 DECLARATION OF SEAN T. CARTER, ESQ. 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 13. Attached hereto as Exhibit I, are true and correct copies of the fee schedules for the American Arbitration Association dated May 1, 2018. 14. Attached hereto as Exhibit J, is a true and correct copy of the judicial opinion in Oto, L.L.C. v. Kho, 14 Cal.App.5th 691 (2017). This opinion includes the full text of the arbitration agreement litigated in that case. I declare under penalty of perjury under the Laws of the State of California that the foregoing is true and correct. Executed in Oakland, CA on March 1, 2019. Respectfully submitted, By: Sean T. Carter, Esq. Attorneys for Defendants, Steven Borochoff & Borochoff Management Consultants Exhibit A Carter Declaration xhibit art r eclar t o .\ THE CARTER LAW GROUP E MERYVILLE, CAU FO&' Thursday, February 08, 2018 8:45 AM LaborComm.WCA.VNO@dir.ca.gov sean@seancarter.us Subject: Initial Report or Claim Submitted on behalf of Steven Borochoff -- 2-8-2018 Attachments: Initial Report or Claim 2-8-18.pdf; Supplement to Initial Report or Claim - Borochoff.pdf February 8, 2018 VIA ELECTRONIC MAIL VIA CERTIFIED MAIL/RETURN RECEIPT REQUESTED Division of Labor Standards Enforcement 6150 Van Nuys #206 Van Nuys, CA 91401 Email: LaborCornm.VVC!-\.VNO@dir.ca.qov Re: Steven Borochoff vs. Eyeris Technologies, Inc. & Modar Alaoui (Individually) Attention: Department of Labor Standards Enforcement ("DLSE"): Please find attached: (1) The Initial Report or Claim form ratified by Steven Borochoff on February 2, 2018 and a (2) Supplemental Letter in Support of the Initial Report or Claim. These documents are being submitted to the DLSE - Van Nuys Office via this electronic correspondence and by certified mail/return receipt requested. Please feel free to contact me using the contact information provided below with questions or concerns. If DLSE resources and procedures allow, we would be most grateful for a confirmation of receipt of this electronic submission. With kind regards, Sean T. Carter The Carter Law Group Licensed by the California State Bar Northwestern University School of Law University of California at Berkeley 2340 Powell Street, Office Suite 355 Emeryville, CA 94608-1738 Tel. 650.735.1090 eFax: 650.472.8080 Email: sean{Q)seancarter.u~ Website: www,seancarterns To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another parly any transaction or matter addressed herein. This e-mail (including any attachments) is intended only for the exclusive use of the individual{s} to whom if is addressed. The information contained herein or attached hereto may be proprietary, confidential, privileged and exempt from disclosure under applicable law. If you are not the intended recipient or agent responsible for delivering the message to the intended recipient, you are hereby on notice that any use, dissemination, distribution or copying of this communication is strictly prohibited. If you have received 1 this communication in error, please immediately notify the sender by telephone (650. 735. 1090) or e-mail and delete all copies of this e- mail and any attachments. Thank you. 2 LABOR.COMMis.slONER,STATEOFCALIFORNIA DEPAllTMENTOFINDU$TRIALRELAnoNS-J)lV1SlONOflABORSTANDAJIDSENFORCEMENT 1. ctEAJ.tl 1- ,P~T _j Initial Report or Claim F'Olt Of'JU:E'U!lE ONLY T ..... by, r I C-1: PLE.4.SE PRINT OR TYPE ALL INFORMATION -- I SIC., Refer ta tire accompanying Guide to assist you infill;,,g Otl1 tAis form. ,_ llCI~ 1-□YES ONO PRELIMINARY QUESTIONS :·1,:~~l~~~~~~1,~ves;-sr()P~,-o6NO~-~wt~_fORM;~-m~'!m--f"W~1"ctam 2. Have you filed a maBatian complaint against your employerwilh the Labor Commissioner? D YES. on: / / lg) NO ( tf you haw bNn mallatad qalnat, you may file a Nltllliatlon Month Day Year complaint byfllling out another form. "DLSE FORM 20&. "J 4. Are other employees also filing wage daims againstyo..-employe1'1 □YES ONO 001 DON'T KNOW Part 1: LANGUAGE ASSISTANCE & REPRESENTATION 6a. If you are being assisted wi!h your dalm by a lawyer or o1tlef at1110Cate, enter your ADVOCA TE'S NAME 6b. ADV0CA TE'S PHONE and ORGANIZAllON Sean T. Carter - The Carter Law Group < 650 > 735-1090 Part 2: YOUR INFORMATION 12. YourMAlllNGADDRESS(SlreelNumber,SnatName.Apml'-,tNumber) T CITY STATE ZIP CODE 32440 Snowpeak Drive I Westlake Village CA 91361 Part 3: CLAIM FILED AGAINST (EMPLOYER INFORMATION) . 't;{ j~MPLOYERi ®51~:~M1~$J .. ,-· · -:--: " •· · · 14. ~VER~VEJ-jlCi,.i: U~SE F'~~ # 15. EMPLOYERPHONE . -Eyeris TeehlJQIQQ~S; !nc. i . < . __ -_ ~tity. ~. C36791-0P. _- '.. : -: .·:.: __ 16. ADDRESS of EMPLOYER/ BUSINESS (SlreatNumber.Shel tame. Floor, Su~): 800 W El Camino Real Ste. 180 Alt. Address: 530 Lvtton Ave, 2nd Floor -11,.,AODRESS~re:YQ!,t~t-rl',«erenHrome(ix1iHN~.S1nie1.J'loor,s~): · ··- " . ; ~ - . : . . . -... . - . -. : - _-- " ... : ' . :,,. ··: . . .. ,. - CITY Mountain View Palo Alto -CITY . STATE CA CA ZIP CODE 94040 94301 ·•. STATE . ZIP CODE W.estlake ViHage _ ---. CA. -91361 _ 18. NAME of PERSON IN CHARGE (F'A'I Name. Last Name) 119. JOB TlllE f POSITION of PERSON IN CHARGE Modar Alaoui Chief Executive Officer 24. Checkwhid\boxdescnl>esyouren1)1oyer,ifyouknow: liilCORPORATION □INDMDUAL O PARTNERSHIP O lLC D llP _, .. ., PRINT vouR NAME: Steven Borochoff · Part 4: FINAL ·WAGl!S I BOUNCED CHECKS -· ~ · QJ!,TEOF(:il~ :_ .. -~6; Chfii:k..whii;hboiloyer Chvrr~ • ./ . J. ~: '8k>~on 9 /30 /~016 · :~:-,;:,~?:,:i-..v~t-,· :,>;:_)::b~tt~;::_:i · ·. ·· .. -· ~ ~~ · : -·; .:-~~-;- 27a. lfyou QUIT, did you give 72 hoUl'9 notice before quitting? □YES □NO 29a. How were your wages paid? 27b. lfyoo QUIT, have you ruceived your final payment of wages inclu.IJOICATIDK{REV. 7'20t2l rccwr--- •"1•1 □ .... - - □pm □- -- Qpm· □-__ Dpm □- --□'"" □-__ Op111 □-__ Orm Dam _ _ o l>ffl ONLY IF YOU WORKED A SP:..IT S~i=T 1oh 111 ___ □- 01111 1•--· Dom □""' ,. ___ Dom Dsm 191--111 D- Qpm , ____ D am --□"'" 2nd--at □-Dpm .. Dom Qpn ----D ... □ ... 2nd---o .. Din :IN!slill-- □- □pm 211Gllhlft-ll □- Q pm 2NI---Dam - - □pm Part e: PAYMENT OF WAGE& 32. Were you- paid or promiSed a FIXED amount of wages per pay period. no maftaf bow many bouni you worked ifor lll(ampie, $400 per we&k, regardless of how many hours you W'Oiked)? 181ves lw-..sp-a!dS 0.00 per Oc,ay 0WNk Oavaryzw .. ks {gjmon,11 Otemi-monthly OottMr {1pedfy); - I was promised $ 15s50~.oo pel" Oday □-k 0eve:y2-ks 18lmontti OwmwnQl'lthly Oottier(spe~-,; □No 33b. lfyoo were an HOURLY employee, wefe ;-ou paid or promised ITI(ll1t 33a. Were you an HOURLY employee? than ooa hoUrly,.. ~d or: 1h41 hours~ wO!ked or oifferen: jot> □YES. I was paid$ tam}? per hour. □YES {des::ribei I was promised $ per hour. ~NO ONO 34 Were )'O!.l paid l:ly PIECE AATE? □YES f&iNO I 35. Were you paid by COMMlSSlON'? □YES 18JNO Part 7;- WAGES. COMPENSATION & PENAL TIES OWED 36. CLAtMS {Cbet.k all ~H below lMt a_pply) OUEALPaUOOWAGES D SPU1' SHIFT PREMIUM 0 REPORTlffG TIME PAY □VACATION WAGES.- f!l BUSN:$5 EXPENSES 0 UNUWFULOB>UCTJOHS I Cl.AIM PERfOD: l STARTDATE l (Month/ Day/ Yur) 4-1-2016 CLAIM PERIOD: END DATE (Monthl Day/ Year) 9-30-2016 l AMOUNT EARN.ED / CLAIMED i 1 . 1 ! I l S i s s $ s s ls 93,000.00 ~ OTHER (Splcify}: Labor Code Violations See Supplsment Letter I s In support of Initial Claim ENTER SUBTOTAL (add all Amounts Earned/Claimed): $ 117,430.00 ENTER TOTAL AMOUNT PAID: $ 0.00 GRAND TOTA~ _ _9WED {Subtotal mmu5 Total Amount Pa ,d]: $ 117,743.00 37 C."teck box,es) 'f 'fO.J are ;;!Slming 181 waw~ Sime penalUn (Labor COIMI §203) 131 Pemljlca. for "booncell" t.hec.k$ (~hec:u i&auRlt with iMufflclent funds) [Labor Cade §203.1} /(I ' ;. i Claimant: Address of Claimant: Phone No. of Claimant: N-;,nc & Addre6S of Advocate: Phone No. of Advocate: Address change of Claimant as of: RECOR!) OF RECEIPTS Date Check, Receipt. Number Amount Received Cash, etc. CONFERENCE:PATES NOTES: Againsl: Add,css of Defendant: Ph0t1c No. of Defendant: Address change of Defendant as of: Division Cl1eck Dnte Pnid Balance Due Number Interpreter Needed: Action Number: Docket Date Date Closed DATE(S) CLAIM RECEIVED DATE BOIIE COMPLAINT FILED (if applicable) RECORD OF PAYMENTS TO CL,\IMANT Si gnature/Rcmarks PEND:DATES DATE-RCI COMPLAINT FILED (if 11pplicnble) \ I :·. THE CARTER LAW GROUP EMERYVILLE, CALIFORNIA (ADMITTED CALIFORNIA STATE BAR) February 8, 2018 VIA ELECTRONIC MAIL VIA CERTIFIED MAIURETURN RECEIPT REQUESTED Division of Labor Standards Enforcement 6150 Van Nuys #206 Van Nuys, CA 91401 Email: LaborComm. WCA.VNO@dir.ca.aov P a ge 11 Re: Steven Borochoffvs. Eyeris Technologies, Inc. & Modar Alaoui (Individually) Attention: Department of Labor Standards Enforcement ("DLSE"): This letter serves as a supplement to the Initial Report of Claim ("Report of Claim") submitted herewith in support of the Wage and Hour claim of Steven Borochoff {"Borochoff') against his former employer, Eyeris Technologies, Inc. {"Employer" an~/or "Company") and Modar Alaoui ("Alaoui"). With this letter and the Report of Claim, please find enclosed: Exhibit A: • Employer's Offer of Employment dated March 28, 2016. • Employer's Global Vice President of Sales Job Description entitled "Global VP of Sales Responsibilities." • Employer's "Employee Confidential Information and Inventions Assignment Agreement." Exhibit B: • Employer's Consulting Agreement. Exhibit C: • Demand for Payment of Wages Exhibit D: • California Secretary of State Business Entity Records re: Eyeris Technologies, Inc. filed by Modar Alaoui on May 29, 2014. The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us I \ P a ge 12 Summary of Wage Claim Section 3357 of the California Labor Code {"Labor Code") provides that "[a)ny person rendering service for another, other than as an independent contractor [ ] is presumed to be an employee." For the reasons further detailed below, the Company misclassified Steven Borochoff as an "independent contractor'' rather than as an "employee" in order to avoid paying Mr. Borochoff wages as required by the Labor Code. Our Report of Claim is filed to recover unpaid wages and appropriate penalties. Wage Claim Mr. Borochoff asserts at least $117,430.00 in wage claims and penalties against the Company. Labor Code§ 204 (Unpaid Wages): Labor Code§ 226 (Paystubs): Labor Code§ 203 (Waiting Time): Labor Code§ 226.8 (Misclassification): Labor Code§ 218.6 {Interest): $93,000.00 $1,150.00 $23,280.00 TBD TBD Labor Code§§ 218.5(a), 1194(a) (Fees/Costs): TBD $117,430.00 [Next Page) The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650. 735.1090 Website: www.seancarter.us ,\ ! P age 13 Mr. Borochoff 's Employment On May 29. 2014, Eyeris Technologies, Inc. ("Company") filed a Statement and Designation by Foreign Corporation to qualify to transact business in the State of California. (See Exhibit D). On March 28. 2016, the Company's Chief Executive Officer, Modar Alaoui, delivered an offer of employment ("Offer Letter''), an Employment Job Description and an "Employee Confidential Information and Inventions Assignment Agreement'' to Mr. Borochoff. (See, Exhibit A). The Offer Letter provided, inter alia, that Mr. Borochoff would become the Global Vice President of Sales and receive an annual salary of $125,000.00. The Offer Letter further stated: "Your salary will be $125,000 per year, less payroll deductions and withholdings, paid upon the Company's closing of one or more debt or equity financing raising an aggregate of not less than $500,000. Your travel expenses, however, will be reimbursed immediately with prior approval." Despite the foregoing language, Mr. Borochoff was given the impression that he would be paid as anv employee would be paid by an employer. Mr. Borochoff had every reason to believe that he would be properly compensated because the Company's Chief Executive Officer, Modar Alaoui, repeatedly assured him that wages would in-fact be disbursed by the Company. March 28. 2016 Mr. Alaoui informed Mr. Borochoff, both verbally and in writing, that the Company (1) had received a term sheet from Hack Ventures, Inc., and that (2} Hack Ventures would provide the Company with $3M in equity financing. On March 28, 2016, Mr. Alaoui assured Mr. Borochoff that the equity financing would be made available to the Company within "two or three weeks." March 31, 2016 During a conference call with Mr. Borochoff, Mr. Alaoui declared that the Company would not move forward with the offer of employment. Instead, Mr. Alaoui delivered a "Consulting Agreement'' to Mr. Borochoff which stated that our Client would serve in the capacity of the Global Vice President of Sales, on a full-time basis (40 hours per week) but would be designated as an "independent contractor." (See, Exhibit 8). The Consulting Agreement provided that Mr. Borochoff would receive $15,500.00 per month from April 1, 2016 to September 30, 2016. Like the Offer of The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us .\ P ag e 14 Employment Letter, the Consulting Agreement stated that Mr. Borochoff would be paid "upon the Company's closing of one or more debt[s] or equity financing raising an aggregate of not less than $1,000,000.00." April 2, 2016 In specific reliance upon Mr. Alaoui's repeated representations that the Company would have the funds necessary to pay him, Mr. Borochoff ratified the Consulting Agreement. After ratifying the Consulting Agreement, Mr. Borochoff worked for the Company fulltime and in a manner faithful to the Employment Job Description which the Company prepared and delivered to Mr. Borochoff along with the Employment Offer Letter on March 28, 2016. Mr. Borochoff's function as Global Vice-President of Sales under the Employment Offer Letter and the Consulting Agreement was the very same employment position in terms of the duties Mr. Borochoff was expected to perform, and did in fact perform, for the Company. Mr. Borochoff continued to function as an employee while the Company exercised the control typically found in an employer/employee relationship. July 21, 2016 Mr. Borochoff asked Mr. Alaoui when the Company would deliver wages for work performed since his start date on April 2, 2016. At that time, Mr. Borochoff had worked for the Company full-time for sixteen (16) weeks without pay. Mr. Alaoui stated that the Company would start making payments. No such payments were ever made or received. September 12, 2016 Mr. Borochoff submitted a proactive written demand to the Company seeking $93,000.00 in compensation for work performed ($15,500/month for 6 months ($15,500 times 6 months= $93,000.00) per the terms of the Consulting Agreement. The Company ostensibly ignored Mr. Borochoff's request and wages were not paid. In hopes of avoiding a dispute, Mr. Borochoff also attempted to engage in good-faith discussions with Mr. Alaoui in an effort to be paid for work performed. Mr. Borochoff s amicable overtures and demands for payment of wages fell on deaf ears and no payments have been made to date. Ill Ill The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650. 735.1090 Website: www.seancarter.us P age 15 September 30, 2016 Mr. Borochoff's employment was terminated. Analysis Misclassification -- Labor Code § 226.8 In 2011 , the California legislature passed Senate Bill 459 prohibiting the willful misclassification of individuals as independent contractors. The new legislation created civil penalties of up to $25,000 per violation. The Labor Commissioner evaluates a misclassification claim with the presumption that the worker is an employee. See, Labor Code§ 3357. An employer - employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker's duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. See, Yellow Cab Cooperative v. Workers Compensation Appeals Board, 226 Cal.App.3d 1288 (1991). · The label a company applies to its relationship with a given individual is not controlling. Rather, someone who is classified as an independent contractor is entitled to the legal rights of an employee upon a showing that applicable law required that classification. S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341,349, (1989); Ruiz v. Affinity Logistics Corp. , 754 F. 3d 1093, 1101 (9th Cir. 2014). Whether a given independent contractor has been correctly classified depends on a number of factors. However, service providers who work full-time, under some supervision and who are not engaged in a specialized trade or business generally should be classified as employees. See, Labor Code§ 3357; 29 U.S.C. 203(e). Mr. Borochoff served as the Global Vice-President for the Company from April 1, 2016 to September 30, 2016. This labor board claim refers to his entire six (6) month term of employment. When the Company offered Mr. Borochoff a full-time employment position on March 28, 2016, the included job description summarized the Company's expectations of Mr. Borochoff as a Company employee. Not surprising, during his employment, Mr. Borochoff addressed the employment duties announced by the Company. These duties were carried out at the direction of the Company and the Company's Chief Executive Officer. As stated by the Company (Exhibit A), Mr. Borochoff's duties of employment were as follows: The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us .\ I I ,·. ' ' Page j 6 • Develop plans and strategies for developing business and achieving the company's sales goals • Create a culture of success and ongoing business and goal achievement - possibly more important than the first item on this list • Manage the sales teams, operations and resources to deliver profitable growth • Manage the use of budgets • Define optimal sales force structure • Hire and develop sales staff • Become known as an employer of choice and a sales force that top sales people want to join • Define and oversee sales staff compensation and incentive programs that motivate the sales team to achieve their sales targets • Define and coordinate sales training programs that enable staff to achieve their potential and support company sales objectives • Manage customer expectations and contribute to a high level of customer satisfaction • Define sales processes that drive desired sales outcomes and identify improvements where and when required • Put in place infrastructure and systems to support the success of the sales function • Provide detailed and accurate sales forecasting • Compile information and data related to customer and prospect interactions • Monitor customer, market and competitor activity and provide feedback to company leadership team and other company functions • Work closely with the marketing function to establish successful support, channel and partner programs • Manage key customer relationships and participate in closing strategic opportunities • Travel for in-person meetings with customers and partners and to develop key relationships Mr. Borochoff also engaged in the following specific employment duties: • Conducted general oversight of other sales staff (Duk Chun) • Recruited and referred other employment candidates to the team (CFO) • Held meetings with prospects to convert them to paying customers • Directed to negotiate various contracts with customers {Toyota) • Provided reports as to status of contracts and potential new customers to CEO The Carter law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us !. P a g L': 17 • Consistently introduced to third parties by the Company as the Company's Global Vice President of Sales • Routinely directed to travel to trade shows to engage prospective customers Under California law, the Department of Labor Standards Enforcement ("Commissioner") should assess Mr. Borochoff's relationship with the Company under the presumption that Mr. Borochoff was an employee. See, Labor Code § 3357. We ask the Commissioner to consider the Offer of Employment drafted by the Company. We urge the Commissioner to vet the Employment Job Description and then consider our forthcoming documentary and testimonial evidence which will demonstrate that Mr. Borochoff performed the functions of a fulltime employee as corroborated by the very Employment Job Description the Company unilaterally drafted and submitted to Mr. Borochoff. A court or an administrative agency will find an employer/employee relationship where (1) the employer has the right to discharge the worker at-will/without cause, (2) the worker engaged in work which is usually done under the direction of an employer, {3) the employer has the right or ability to control details of the work performed, and {4} the work is part of the regular business of the employer. See, Rest.2d Agency, § 220. The relationship between Mr. Borochoff and the Company satisfies each of these factors. Therefore, the Company misclassified Mr. Borochoff as an independent contractor. Because Mr. Borochoff served as a Company employee, Mr. Borochoff is entitled to all wages due plus penalties and interest. California Labor Code Section 226.8 imposes penalties on employers who willfully misclassify their employees as independent contractors. The penalties for violating Section 226.8 include fines between $5,000 and $15,000 per violation of the law, in addition to any other fines allowed by law. If the employer is engaged in a pattern or practice of violating this law, the fines are increased to between $10,000 and $25,000 per violation. In Noe v. Superior Court, 1 the California Court of Appeals found that the language regarding enforcement of section 226.8 appears in subdivision (g) and that this subdivision authorizes the Labor Commissioner to enforce the statute "pursuant to Section 98 or in a civil suit." The court in Noe held that section 226.8 does not provide a private right of action. Noe v. Superior Court, 237 Cal.App.4th 316, 187 Cal.Rptr.3d 836 (2015) The Carter Law Group 2340 PoweH Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us I :: C ' Page 18 If the commissioner proceeds under section 98 and determines a violation has occurred, he or she "may issue a citation to assess penalties." (Labor Code§ 226.8, subd. (g)(2).) We request the Commissioner to assess penalties against the Company consistent with Noe and Labor Code Section 226.8, subd. (g)(2). Payment Calculations Based on a monthly salary of $15,500.00, and given that Mr. Borochoff worked for exactly 6 months, the wages due are $93.000.00. At $15,500.00 per month with a 40 hour work week, Mr. Borochoff's hourly wage would have been approximately $97.00 per hour. Labor Code§ 204 (Unpaid Wages) Because Mr. Borochoff worked for the Company on a full-time basis from April 1, 2016 to September 30, 2016, he is entitled to $93,000.00 in wages for work performed. Waiting Time Penalties (Labor Code § 203) An employer who willfully fails to pay, without abatement or reduction, any wages of an employee who is discharged or who quits then the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid in full with a limit of thirty (30) days. See, Mamikav. Barca, 68 Cal. App. 4th 487 (1998). As memorialized by letter dated December 13, 2016 (See, Exhibit C}, Mr. Borochoff has made repeated demands to be paid. The Company has refused. Because Mr. Borochoff did not receive all wages due at termination, Mr. Borochoff is entitled to waiting time penalties at his daily rate for 30 days. Penalty: $97.00 per hour x 8 hours= $776.00 per day x 30 days= $23,280.00 Paystubs (Labor Code § 226) During the course of his employment, Mr. Borochoff should have been paid bi-monthly and should have been provided with twelve (12) paystubs which would have memorialized the wages he earned. Because Mr. Borochoff received no such wages and was never provided with paystubs, Mr. Borochoff is entitled to a $1,150.00 penalty. The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650. 735.1090 Website: www.seancarter.us P a ge 19 Attorneys' Fees & Costs (Labor Code§§ 218.5{a), 1194(a)) An employee who successfully brings a wage claim is entitled to an award of reasonable attorney fees and costs. See, Labor Code§§ 218.S(a), 1194(a); See also, On-Line Power. Inc. v. Mazur, 149 CA4th 1079, 1086, (2007) and this rule applies to wage claims by all employees, including salaried corporate executives. Conclusion Based on the foregoing, we respectfully request that the DLSE afford the relief sought by Mr. Borochoff's Report of Claim and this letter including, but no limited to, unpaid wages, interest, penalties and attorneys' fees/costs. STC/db Enclosures: Four (4} Attachments Respectfully submitted, ~ Sean T. Carter, Esq. The Carter Law Group 2340 Powell Street - Suite 355 Emeryvllle, California 94608 Email: sean@seancarter.us rnrect Dial: 650.735.1090 Website: www.seancarter.us Exhibit A: • Employers Offer of Employment dated March 28, 2016. • Employer's Global Vice President of Sales Job Description entitled "Global VP of Sales Responsibilities." • Employer's uEmployee Confidential Information and Inventions Assignment Agreement." Steven P. Borochoff steve@borochoff.org 408-887-9000 Re: Employment Terms Dear Steven: Eyeris Technologies, Inc. (the "Company") is pleased to offer you the position of Global Vice President of Sales, on the fo!Jowing terms. · You will be responsible for the company's global sales operations as described in Exhibit A, and will report to the company's CEO, Modar Alamti.. You will work at our facility located at 530 Lytton Avenue, 2nd floor, CA 94301. Of course, the Company may change your position, duties, and work location from time to time in its discretion. Your salary will be $125,000 per year, less payroll deductions and withholdings, paid upon the Company's closing of one or more debt or equity financing raising an aggregate of not less than $500,000. Your travel expenses, however, will be reimbursed immediately with prior approval. During your employment, you will be eligible to participate in the standard benefits plans offered to similarly situated employees by the Company from time to time, subject to plan tenns and generally applicable Company policies. A full description of these benefits is available upon request. Exempt employees may take a reasonable amount of time off with pay, as permitted by their duties and responsibilities, and as approved in advance by their supervisor. Exempt employees do not accrue vacation, and there is no set guideline as to how much vacation each employee will be permitted to take. Supervisors will approve paid vacation requests based on the employee's progress on work goals or milestones, status of projects, fairness to the working team, and productivity and efficiency of the employee. Since vacation is not allotted or accrued, "unused" vacation time will not be canied over from one year to the next nor paid out upon termination. The Company may change compensation and benefits from time to time in its discretion. As a Company employee, you will be expected to abide by Company rules and policies. As a condition of employment, you must sign and comply with the attached Employee Confidential Information and Inventions Assignment Agreement which prohibits unauthorized use or disclosure of the Company's proprietary information, among other obligations. In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality. Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company. You agree that you will not bring onto Company premises any unpublished documents or property belonging to any former employer or other person to whom you have an obligation of confidentiality. You hereby represent that you have disclosed to the Company any contract you have signed that may restrict your activities on behalf of the Company. Pagel Nonna! business hours are from 9:00 a.m. to 5:00 p.m., Monday through Friday. As an exempt salaried employee, you will be expected to work additional hours as required by the nature of your work assignments. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may tenninate your employment at any time, with or without cause or advance notice. Your employment at-will status can only be modified in a written agreement signed by you and by an officer offhe Company. This offer is contingent upon a reference check and satisfactory proof of your right to work in fhe United States. You agree to assist as needed and to complete any documentation at the Company's request to meet tl1ese conditions. This letter, together with your Employee Confidential Information and Inventions Assignment Agreement, fonns the complete and exclusive statement of your employment agreement with the Company. It supersedes any other agreements or promises made to you by anyone, whether oral or written. Changes in your employment terms, other than those changes expressly reserved to the Company's discretion in this letter, require a written modification signed by an officer of the Company. Please sign and date this letter, and the enclosed Employee Confidential Information and Inventions Assignment Agreement and return them to me by Thursday March 3 l •', 2016, if you wish to accept employment at the Company under the terms described above. If you accept our offer, we would like you to start on April 1•1, 2016. We look forward to your favorable reply and to a productive and enjoyable work relationship. Sincerely, Modar Alaoui, CEO Understood and Accepted: Steven P. Borochoff Date Attachment: Employee Confidential Information and Inventions Assignment Agreement California Page2 Exhibit A Global VP of Sales responsibilities (not necessarily in order) • Develop plans and strategies for developing business and achieving the company's sales goals • Create a culture of success and ongoing business and goal achievement - possibly more important than the first item on this list • Manage the sales teams, operations and resources to deliver profitable growth • Manage the use of budgets • Define optimal sales force structure • Hire and develop sales staff • Become known as an employer of choice and a sales force that top sales people want to join • Define and oversee sales staff compensation and incentive programs that motivate the sales rerun to achieve their sales targets • Define and coordinate sales training programs that enable staff to achieve their potential and support company sales objectives • Manage customer expectations and contribute to a high level of customer satisfaction • Define sales processes that drive desired sales outcomes and identify improvements where and when required • Put in place infrastructure and systems to support the success of the sales function • Provide detailed and accurate sales forecasting • Compile information and data related to customer and prospect interactions • Monitor customer, market and competitor activity and provide feedback to company leadership team and other company functions • Work closely with the marketing function to establish successful support, channel and partner programs • Manage key customer relationships and participate in closing strategic opportunities • Travel for in-person meetings with customers and partners and to develop key relationships Page3 EMPLOYEE CONFIDENTIAL INFORMATION AND INVENTIONS ASSIGNMENT AGREEMENT In consideration of my employment or continued employment by EYERlS TECHNOLOGIES, INc., a Delaware corporati~n ("Company"), and the compensation paid to me now and during my employment with the Company, I agree to the terms of thts Agreement as follows: 1. CONFIDENTIAL lNFORMA TION PROTECTIONS. 1.1 Nondisclosure; Recognition of Company's Rights. At all times during and after my employment, I will hold in confidence and will not disclose. use, lecture upon, or publish any of Company's Confidential Information (defined below), except as may be required in connection with my work for Company, or as expressly authorized by the President or Chief Executive Officer at the direction of the Board of Directors (each an "Officer") of Company. I will obtain the Officer's written approval before publishing or submitting for publication any material (written, oral, or otherwise) that relates to my work at Company and/or incorporates any Confidential Info~ation. I hereby assign to Company any rights I may have or acquire in any and all Confidential Information and recognize that all Confidential Information shall be the sole and exclusive property of Company and its assigns. 1.2 Confidential Information. The term "Lonfulential ln..fonnation" shall mean any and all confidential knowledge, data or information related to Company's business or its actual or demonstrably anticipated research or development, including without limitation (a) trade secrets, inventions, ideas, processes, computer source and object code, data, formulae, programs, other works of authorship, .know- how .. improvements, discoveries, developments, designs, and techniques; (b) information regarding products, services, plans for research and development, marketing and business plans, budgets, financial statements, contracts, prices, suppliers, and customers; (c) information regarding the skills and compensation of Company's employees, contractors, and any other service providers of Company; and (d) the existence of any business discussions, negotiations, or agreements between Company and any third party. 1.3 Third Party Information. I understand that Company has received and in the future will receive from third parties confidential or proprietary information ("Third Party Information"_) subject to a duty on Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. During and after the term of my employment, I will hold Third Party Information in strict confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for Company) or use, Third Party Information, except in connection with my work for Company or unless expressly authorized by an officer of Company in writing. 1.4 No Improper Use of Information of Prior Employers and Others_ I represent that my employment by Company does not and will not breach any agreement with any former employer, including any noncompete agreement or any agreement to keep in confidence or refrain from using information acquired by me prior to my employment by Company. I further represent that I have not entered into, and will not enter into, any agreement, either written or oral, in conflict with my obligations under this Agreement. Owing my employment by Company, I will not improperly make use of, or disclose, any information or trade secrets of any former employer or other third party, nor will I bring onto the premises of Company or use any unpublished documents or any property belonging to any former employer or other third party, in violation of any lawful agreements with that former employer or third party. I will use in the performance of my duties only information that is generally known and used by persons with training and experience comparable to my own, is common .knowledge in the industry or otherwise legally in the public domain, or is otherwise provided or developed by Company. 2. INVENTIONS. 2.1 Definitions. As used in this Agreement, the tenn "Invention" means any ideas. concepts, infonnation, materials, processes, data, programs, know-how, improvements, discoveries, developments, designs. artwork, formulae, other copyrightable works, and techniques and all Intellectual Property Rights in any of the items listed above. The tenn "Jmellectual Properly Rights," means ail trade secrets, copyrights, trademarks, mask work rights, patents and other intellectual property rights recognized by the laws of any jurisdiction or country. The term "Moral Rights" means all paternity, integrity, disclosure, withdrawal, special and any other similar rights recognized by the laws of any jurisdiction or country. 2.2 Prior Inventions. I have disclosed on Exhibit A a complete list of all Inventions that (a) I have, or J have caused to be, alone or jointly with others, conceived, developed, or reduced to practice prior lo the commencement of my employment by Company; (b) in which I have an ownership interest or which I have a license to use; and (c) that I wish to have excluded from the scope of this Agreement (collectively referred to as "Prior Inventions"). Jf no Prior Inventions are listed in .Exhibit A or if I have not completed Exhibit A, I warrant that th.ere are no Prior Inventions. I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions (defined below) without Company's prior written consent. If, in the course of my employment with O)mpany, I incorporate a Prior Invention into a Company process, machine or other work, I hereby grant Company a non-exclusive, perpetual, fully-paid and royalty- free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to Employee Confidential Information and Invent.ions Assignment Agreement Steven P. Boroohoff Page I reproduce, make derivative works of, distribute, publicly perfonn, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Prior Invention. 2.3 Assignment of Company Inventions. Inventions assigned to the Company or to a third party as directed by the Company pursuant to the subsection titled Government or Third Party are referred to in this Agreement as "Company Inventions." Subject to the subsection titled Government or Third Party and except for Inventions that I can prove qualify fully under the provisions of California Labor Code section 2870 and I have set forth in Exhibit A, I hereby assign and agree to assign in the future (when any such Inventions or Intellectual Property Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to Company all my right, title, and interest in and to any and all Inventions (and all Intellectual Property Rights with respect thereto) made, conceived, reduced to practice, or learned by me, either alone or with others, during the period of my employment by Company. Any assignment of Inventions (and all Intellectual Property Rights with respect thereto) hereunder includes an assignment of all Moral Rights. To the extent such Moral Rights cannot be assigned to Company and to the extent the follo·wing js allowed by the laws in any country where Moral Rights exist, I hereby unconditionally and irrevocably waive the enforcement of such Moral Rights, and all claims and causes of action of any kind against Company or related to Company's customers, with respect to such rights. I further acknowledge and agree that neither my successors-in-interest nor legal heirs retain any Moral Rights in any Inventions (and any Intellectual Property Rights with respect thereto). 2.4 Obligation to Keep Company Informed. During the period of my employment and for one (1) year after my employment ends, I will promptly and fully disclose to Company in writing (a) all Inventions authored, conceived, or reduced to practice hy me, either alone or with others, including any that might be covered under California Labor Code section 2870, and (h) all patent applications filed by me or in which I am named as an inventor or co-inventor. 2.5 Government or Third Party. I agree that, as directed by the Company, I will assign to a third party, including without limitation the United States, all my right, title, and interest in and to any particu1ar Company Invention. 2.6 Enforcement of InMlcctual Property Rights and Assistance. During and after the period of my employment and at Company's request and expense, I will assist Company in every proper way, including consenting to and joining in any action, to obtain and enforce United States and foreign Intellectual Property Rights and Moral Rights relating to Company Inventions in all countries. If the Company is unable to :secure my signature on any document needed in connection with such purposes, I hereby inevocably designate and appoint Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act on my behalf to execute and file any such documents and to do all other lawfully permitted acts to further such purposes with the same legul force and effect as if executed by me. 2.7 Incorporation of Software Code. I agree that I will not incorporate into any Company software or otherwise deliver to Company any software code licensed under the GNU General Public License or Lesser General Public License or any other license that, by its terms, requires or conditions the use or distribution of such code on the disclosure, licensing, or distribution of any source code owned or licensed by Company except as expressly authorized by the Company or in strict compliance with the Company's policies regarding the use of such software. 3. RECORDS. I agree to keep and maintain adequate and cunent records (in the form of notes, sketches, drawings and in any other form that is required by the Company) of all Inventions made by me dw-ing the period of my employment by the Company, which records shall be available to, and remain the sole property of, the Company at all times. 4. AnnmONAL ACTIVl11ES. 1 agree that during the term of my employment by Company, I will not (a) without Company's express written consent, engage in any employment or business activity that is competitive with, or would otherwise conflict with my employment by, Company; and (b) for the period of my employment by Company and for one ( I) year thereafter, I will not either directly or indirectly, solicit or attempt to solicit any employee, independent contractor, or consultant of Company to terminate his, her or its relationship with Company in order to become an employee, consultant, or independent oontractor to or for any other person or entity. 5. RETURN OF COMPANY PRoPER'IY. Upon termination of my employment or upon Company's request at any other time, l will deliver to Company all of Company's property, equipment, and documents, together with all copies thereof, and any other material containing or disclosing any Inventions, Third Party Information or Confidential Information and certify in writing that I have fully complied with the foregoing obligation. I agree that I will not copy, delete, or alter any information contained upon my Company computer or Company equipment before I return it to Company. In addition, if I have used any personal computer, server, or e-mail system to receive, store, review, prepare or transmit any Company information, including but not limited to, Confidential Information, I agree to provide the Company with a computer-useable copy of all such Confidential Information and then permanently delete and e,q,unge such Confidential Information from those systems; and I agree to provide the Company access to my system as reasonably requested to verify that the necessary copying and/or deletion is completed. I further agree that any property situated on Company's Employee Confidential lnfmmatioo and Inventions Assignment Agreement Steven P. Borochoff Pagc2 premises and owned by Company is subject to inspection by Company's personnel at any time with or without notice. Prior to the termination of my employment or promptly after te1mination of my employment, I will cooperate with Company in attending an exit interview and certify in writing that I have complied with the requirements of this section. 6. NOTIFICATION OF NEW EMPLOYER. If I leave the employ of Company, I consent to the notification of my new employer of my rights and obligations under this Agreement, by Company providing a copy of this Agreement or otherwise. 7. GENERAL J>ROVJSIONS. 7.1 Govcrnmg Law and Venue. This Agreement and any action related thereto will be governed and interpreted by and under the laws of the State of California, without giving effect to any conflicts of laws principles that require the application of the law of a different state. l expressly consent to personal jurisdiction and venue in the state and federal courts for the county in which Company's principal place of business is located for any lawsuit filed there against me by Company arising from or related to this Agreement. 7.2 Severabilify. If any provision of this Agreement is, for any reason, held to be invalid or unenforceable, the other provisions of this Agreement will remain enforceable and the invalid or unenforceable provision will be deemed modified so that it i~ valid and enforceable to the maximum extent permitted by law. 7.3 Survival. 1bis Agreement shall survive the termination of my employment and the assignment of this Agreement by Company to any successor or other assignee and shall be binding upon my heirs and legal representatives. 7.4 Employment. I agree and understand that nothing in this Agreement shall give me any r ight to continued c;mployment by Company, and it will not interfere in any way with my right or Company's right to terminate my employment at any time, with or without cause and with or without advance notice. 7.5 Notices. Each party must deliver all notices or other communications required or permitted under this Agreement in writing to the other party at the address listed on the signature page, by courier, by certified or registered mail (postage prepaid and return receipt requested), or by a nationally-recognized express mail service. Notice will be effective upon receipt or refusal of delivery. If delivered by certified or registered mail, notice will be considered to have been given five (5) business days after it was mailed, as evidenced by the postmark. If delivered by courier or express mail service, notice will be considered to have been given on the delivery date reflected by the courier or express mail service receipt. Each party may change its address for receipt of notice by giving notice o f the change to the other party. 7.6 Injunctive Relief. I acknowledge that, because my services are personal and unique and because I will have access to the Confidential Information of Company, any breach of this Agreement by me would cause irreparable injury to Company for which monetary damages would not be an adequate remedy and, therefore, will entitle Company to injunctive relief (including specific performance). The rights and remedies provided to each party in this Agreement are cumulative and in addition to any other rights and remedies available to such party at law or in equity. 7.7 Waiver. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of that provision or any other provision on any other occasion. 7.8 Export. I agree not to export, reexport, or transfer, directly or indirectly, any U.S. technical data acquired from Company or any products utilizing such data, in violation of the United States export laws or regulations. 7.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an originnl and all of which shall be taken together and deemed to be one instrument. 7.10 Entire Agreement. If no other agreement governs nondisclosure and assignment of inventions during any period in which I was previously employed or am in the future employed by Company as an independent contractor, the obligations pursuant to sections of this Agreement titled Confidential Information Protections and Inventions shall apply. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior communications between us with respect to such matters. No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, w1il be effective unless in writing and signed by me and the Chief Executive Officer of Company. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement. Employee Confidential Information and Inventions Assignment Agreement Stevcrl P. Borochoff Page 3 This Agreement shall be effective as of the first day of my employment with Company. COMPANY: ACCEPTED AND AGREED EYERIS TECHNOLOGIES, INC. By: Name: Title: Address: EMPLOYEE: 530 Lytton Ave, 2nd floor Palo Alto, California 94301 I HAVE READ, UNDERSTAND, AND ACCEPT THIS AGREEMENT ANO HAVE BEEN GIVEN THE OPPORTUNITY TO REVIEW IT \\TTH INDEPENDENT LEGAL COUNSEL. Address: (Signature) Steven P. Borochoff Name (Please Print) Date Employee Confidential Infonnation and Inventions Assignment Agrcemc11t Steven P. Borochoff Signature Page EXHIBIT A INVENTIONS 1. Prior Inventions Disclosure. The following is a complete list of all Prior Inventions (as provided in Subsection 2.2 of the attached Employee Confidential Information and Inventions Assignment Agreement, defined herein as the "Agnement"): 0 None 0 See immediately below: 2. Limited Exclusion Notification. Tms IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and Company does not require you to assign or offer to assign to Company any Invention that you develop entirely on your own time without using Company's equipment. supplies, facilities or trade secret information, except for those Inventions that either: a. Relate at the time of conception or reduction to practice to Company's business, or actual or demonstrably anticipated research or development; or b. Result from any work performed by you for O>mpany. To the extent a provision in the foregoing Agreement purports to require you to assign an Invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is wienforceable. This limited exclusion does not apply to any patent or Invention covered by a contract between Company and the United States or any of its agencies requiring full title to such patent or Invention to be in the United States. Employee COllfidcnti...t Information sud fnvcntiOlls Assignment Agreement Steven P. Borooho!T Exhibit A-1 Exhibit B: • Employer's Consulting Agreement. Exhibit B: o Employer‘s Consulting Agre ment. - ---- - -··-------- ·---· ----- - · . --····------·-·-- ·---·-·--·--···· ·------- EYERIS TECHNOLOGIES, INC. CONSULTING AGREEMENT This Consulting Agreement (the "Agreement") is entered into by and between EYERIS TECHNOLOGIES, INC. . (the "'Conmany"), a Delaware corporation and BOROCBOFF MANAGEMENT CONSULT ANTS ("Consultant"). 1. Consulting Relationship. During the term of this Agreement, Consultant will provide consulting services (the "Services") to the Company as described on Exhibit A attached to this Agreement. Consultant shall use Consultant's best efforts to perfonn the Services such that the results are satisfactory to the Company. 2. Fees; Expenses. As consideration for the Services to be provided by Consultant and other obligations, the Company shall compensate Consultant as specified in Exhibit A attached to this Agreement. Consultant shall be reimbursed for reasonable travel and other out-of-pocket expenses incurred by Consultant at the request of the Company in connection with tlie Services; provided that Consultant provides the Company with receipts for such expenses and obtains prior approval of the Company for any expenses in excess of $200. · 3. Term and Termination. Consultant shall serve as a consultant to the Company for the period set forth on Exhibit A. Notwithstanding the above, either party may terminate this Agreement at any time upon ten days' written notice. In the event of such termination, Consultant shall be paid for any portion of the Services that have been performed prior to the termination. The provisions of Sections 3, 4, 6, 7, 8, and 9 shall survive any tennination oftbis Agreement. 4. Independent Contractor. Consultant's relationship with the Company will be that of an independent contractor and not that of an employee, agent or representative of the Company. Neither Consultant, nor any partner, agent or employee of Consultant, has authority to enter into contracts that bind the Company or create obligations on the part of the Company without the prior written authorization of the Company. Consultant acknowledges and agrees that Consultant (or Consultant's employees, if Consultant is an entity) will not be eligible for any Company employee benefits. Consultant shall have full responsibility for applicable withholding taxes for all compensation paid to Consultant, its partners, agents or its employees under this Agreement, and for compliance with all applicable labor and employment requirements with respect to Consultant's self- employment, sole proprietorship or other fonn of business organization, and Consultant' s partners, agents and employees, including state worker's compensation insurance coverage requirements and any US immigration visa requirements. Consultant further agrees to indemnify the Company and hold it harmless to the extent of any obligation imposed on the Company to pay withholding truces or similar items. 5. Consulting or Other Services for Competitors. Consultant represents and warrants that Consultant does not presently perfonn or intend to perfonn, during the tenn of the Agreement. consulting or other services for, or engage in or intend to engage in an employment relationship with, companies who businesses or proposed businesses in any way involve face analytics and emotion ... - . - - . writing, specifying the organimtion with which Consultant proposes to consult, provide services, or become employed by and to provide information sufficient to allow the Company to determine if such work would conflict with the terms of this Agreement, including the tenns of the Confidentiality Agreement, the interests of the Company or further services which the Company might request of Consultant. If the Company determines that such work conflicts with the terms of this Agreement, the Company reserves the right to terminate this Agreement immediately. 6. Confidential Information. Consultant agrees to hold in strictest confidence, and not to use, except to the extent necessary to perform Consultant's obligations under this Agreement, or to disclose to any person or entity without prior written authorization of the Company, any confidential information of the Company. In this regard, Consultant shall sign, or has signed, a Confidential Information Agreement (the "Confidentiality Agreement'') in the fonn attached hereto as Exhibit Bon or before the date it commences providing Services under this Agreement. Consultant acknowledges the Confidential Information as defined in the Confidentiality Agreement shall be deemed to include any Company confidential or proprietary infonnation which the Consultant receives directly or indirectly in the course of providing Services, orally or by drawings or observation of parts or equipment or created by the Consultant in the course of providing Services. In the event that Consultant is an entity or otherwise will be causing individuals in its employ or under its supervision to participate in the rendering of the Services, Consultant warrants that it shall cause each of such individuals to execute a Confidentiality Agreement. 7. Conflicts with this Agreement. Consultant represents and warrants that this Agreement does not conflict with, and Consultanfs pelformance hereunder will not breach, any agreement or obligation to which Consultant is a party or by which Consultant is bound. Consultant will not knowingly infringe upon any intellectual property right of any current or former client, employer or third party in the performance of the Services. 8. Non-Solicitation. Consultant agrees that during the tenn of the Services with the Company, and for a period of twelve (24) months immediately following the tennination of the Services, Consultant shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company's employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for Consultant or for any other peni,on or entity. Further, during the term of the Services with the Company and at any time following termination of the Services with the Company, Consultant shall not use any confidential infonnation of the Company to attempt to negatively influence any of the Company's clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company. 9. Arbitration. Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The nwnber of arbitrators shall be three. The place of arbitration shall be Santa Clara, California. California law shall apply. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. IO. Miscellaneous. Any tenn of this Agreement may be amended or waived only with the \V11tten consent of the parties. This Agreement, the exhibits hereto and the Confidentiality Agreement constitute the sole agreement of the parties and supersedes all oral negotiations and prior writings with -2- 110625016 vi respect to the subject matter hereof. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, 48 hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party's address or facsimile number as set forth below, or as subsequently modified by written notice. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws. Each of the parties hereto consents to the exclusive jurisdiction and venue of the courts of Santa Clara County, California EACH PAR1Y ACKNOWLEDGES TIIAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNI1Y TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF 1HIS AGREEMENT. TIIlS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF. [Signature Page Follows] -3- ll062S016vl The parties have executed this Agreement on the respective dates set forth below. EYERIS TECHNOLOGIES, INC. By.~ / Name: Modar Alaoui Title: CEO Address: 530 I ytton Ave 2nd Floor, Palo Alto, CA 94301 Date: 4/2/2016 Address: PO Box 3277 Westlake Vi1lage, CA 91359 110625016 vi EXHIBITA Start date: April 1st, 2016. Six (6) months, unless terminated earlier by either party pursuant to section 3 of this ment. Global Vice President of sales 40 hours per week. Company: EYERIS TECHNOLOGIE~ INC. By.~ r Name: Modar Alaoui Title: CEQ Address: 530 L ytton Ave. 2nd Floor, Palo Alto, CA 94301 Date:_~4w-!6'2.l-rl!l2~0 .... 1...,6-------- 110625016 vl Consultant: Title: P.tL,. /U t-, p11 L Address: -Po ~:::Sr1M JJmn for lhe received dates of filings currently being processed. The data provided Is not a complete m cerlified record of an entity. Nat all Images are available online. C3679100 EYERIS TECHNOLOGIES, INC. Registration Data: JI.Wisdlc:Uon: Entity lype: Status: Agent for Service of Process: Entity Address: Entity Malling Address: ! • ..,u ,. ..... , .• . ·• ·····. / Document 1ype 05129/2014 DELAWARE FOREIGN STOCK FTB FORFEITED CORPORA110N SERVICE CQMPANYMftCH WILL DQ IUSINES§ IN CAUFQRNIA AS csc -1,AWYERS INCORPORATING SERVICE (C1592199) To find the most cum,nt California registered Corporate Agent for Ser,ice of Process address and authorized employee(s) informatton, dici( the link above and ther1 select the most current 1505 Certificate. 800 W EL CAMINO REAL STE 180 MOUNTAIN VIEW CA 94040 800 W El CAMINO REAL STE 180 MOUNTAIN VEW CA 94040 It ! FIie Date If l PDF ; ~ ...... _ .... ~-.-.····-·······--......... _ ...,. -·---·-··-···· ......... ,.......... . f REGISTRATION .... - ' . ' ·- . . . ' ' . . . . ' ' . . . . . i l 0512912014 • i * Indicates the information Is not contained in the California Secretary of State's database. • If the status of the oorporation is "Surrender,• the agent for service of process is automatlaitly revoked. Please refer to Ca1i1oma Corporations Code UCUoo 2114 for information relating to service upon corporations that have surrendered. • For information on checking or reserving a name. refer to Name Ayajlabilj\y. • If the image la not avai1able online, for lnbrmation on ordering a copy refer to Information Reau@s1s. • For information on ordering certificates, &1alus reports, certifled copies of documents and copies of documents not currentty avaRable in the Business Search or to request a more extensive search for records. refer to ln{onnaticm Requests. • For holp wllh -rchi"9 ;an entity name, mfer to Searnb Tips. • For desaiptlons of 1he various fields and status types, refer to fnlquenUy Asked Outs1ions ModtfySean:h ! l-~~ ··i f-B.;h>~ R~~-;--i •--••-•••••-~--- •• • - - ---•- •- - - ••H•- ...-.- ~•-·•• - ·- --·- --- - - --···· ·- ··~ - ---- - ---··-- ----- -··· --··-·----·····--- .. ··-·· --· S&DC-S/N Statement and Designation by Foreign Corporation To qualify a corporation from another state or country to transact intrastate business in California, fill out this form, and submit tor filing along with: 3679100 A $100 filing fee (for a foreign stock corporation) or $30 filing fee (for a foreign nonprofit corporation), and A certificate of good standing, issued within the last six (6) months by the agency where the corporation was formed. Note: If the corporation is a nonprofit, the certificate of good standing also must indicate the corporation is a nonprofit or nonstocl< corporation. FILED Secretary of State State of California - A separate, non-refundable $15 service fee also must be included, if you drop off the completed form. MAY 2 9 201~ Important! Corporations in California may have to pay a minimum $800 yearly tax to the California Franchise Tax Board. For more information, go to https:llwww.ftb.ca.gov. l L This Space For Office Usa Only For questions about this form, go to www.sos.ca.gov/businesslbe/fillng-tips.htm. Corporate Name (list the exact name of the corporation, as shown in the certificate of good standing. If the name of the corporation is not available for use in the State of California. the corporation must qualify under an assumeo name. E.g., "{~st the exact name} which will do business in Califomia as [list the proposed assumed name)." Fw general corporate name requirements and restrictions in California, go to www.sos.ca.9ov/businesslbe/name-a11ailabi6ty.htm.) SEMFORCEMENT Initial Report or Claim T-by: PLE,4SE PllINTOR TYPE.ALL JNFORA£4110N --Refer to !Ml~ Guide ro as:sulJIOII in.filling,ottJ tlw:fona. RCIC_.a.t: □ YES □ NO PRELIIIINARY QUESTIONS [. CLEAJ!.J l'OII onu:E1JSll ONI.Y r- l '-" I SIU ,A- :-·:~: .,~=.,~~~~:;;1·,•~,~Jr~~.-~'NO:;~LL 735-109( ,:s~:.!:!=:--::;Ci~~::~H~~i . -. :.-.-j ;:e~ne .: ~ -sr~; -jzip~~~a Part 2: YOUR INFORMATION ;:~r=r~r::-;'.<-.( :~,:~,~;:~;-::·:~ \ --: _:· .· ;:H~P~Q~ ::: }1i:;;i=( 11\~;:;:. 12. Your MAlUNG ADDRESS (SlrMt Ntanbnr, S.-Nlimlt. ~ Nlffller) CITY STATE ZIP CODE 32440 Snowpeak Drive Westlake Village CA 91361 Part 3: CLAIM FILED AGAINST (EMPLOYER INFORMATION) . J3~ '~f>l,f)Yf:Rj $i$i_~l-l~'. ;. ' ' ;'° ,. '. · . 1-4 .. :EMPLO\'al'S '/Et1lC!,.'E U~E:'P~i'l;.1f _ 1 O. t;:MP.~QYER PHONE · l.:~rjs Te~ry~99~1-!rtf , { . •. ~tiw-N_o. G.3679100 . :._ -. : •: ;- ... ,., . _ _ 16. ADDRESS of EMPLOYER/ BUSINESS (Sln,et Number, snei Name, Floor, Suile): CITY STATE 800 W El Camino Real Ste. 180 Mountain View CA Alt. Address: 530 Lvtton Ave, 2nd Floor Palo Alto CA ZIPCOOE 94040 94301 17:.,AOl)RESS~:you~;lf~~ientfl1)m$ox.16(?1!111)!)ef.~~SuitaJ: . CITY : · .. - $TA~ ZIPCODe .:-: ·~:4~44fi~sn~yJk;~-:~~~~-:):•? .. ~: : ·._ . . Westtake vmage _ CA -91361 18. NAME of PERSON IN CHARGE {First Name, LaltNane) 119. JOB Tffi.E I POSffi0N of PERSON IN CHARGE Modar Alaoui Chief Executive Officer 24. Check whidl box desaibes your emptoyer, if you know: liilCORPORATION OINOMDUAL O PARTNERSHIP □ LLC O LLP _,.,., PRINT YOUR NAME: Steven Borochoff P•rt 4: FINAL ·WAGl!S / BOUNCED CHECKS 2~. OATE OF tilBE: : . · .' .26~ ~wbicti boitapp!ies to you: ::~ i:J~-1~~J~:- •:it::~::~ ~~:,: . , . . . ;_~ .. ·;_ :-.. ;_'--: -~_,<-}.;:: -·: .\/~J~):L: ... - 27a, If you QUIT, did you give 72 houl'9 notice before quitting? 27b.. If you QUIT, have you received your final payment of wages including all wages owed? □YES Oves, on: ____ / _____ /____ _ - Dey - ONO 29a. How were your wages paid? □BY CHECK OBY CASH □BY BOnt CASH & CHECK 291>. If paid by check. did any of yow- paydled•-: .:sTARTTIME a.a n,-s. .• START TIME . EN.D.11ME :'.:'./}{ \~>,_\: ,<_'\ Jf~~~~;-. (lf~li~): _(li.,~J. .ttr~~) .: _:. \::"";· -~-=~ :: -~_::.,:._~;-~~. '. ····- --~-----. · □- □- o ... □- □-__ Qpm - - Qpm __ o..,, -- □""' --□""' Dam o .... Dam o ... o.,, □-__ Opm __ Orn __ Opm -- Qpon __ o.,... -- Oi,m· □- □- □- o .. □-_ _ o..,. __ Oi,n _ _ op,n -- □pm __ Opm □- □- □- Dam Dam __ Dim __ o..,, __ Qpn - - □pd> --□""' 011111 □- □- □- □- □- --□""' --□""' --□""' --□""' --□""' _ _ Opm □- □- o ... □- o .... □- . -- Qpm __ Opm _ _ o..., -- o .... __ o,,.,. __ Opn Dam □- Dem □- □- □- --□""' -- o.,.,. _ _ Opn __ o.,.. --□""' -- □""' 1 l WNSE. ~TXJN (Rei'. TtlV121 _,, __ ,.,>) ONLY IF YOU WORKED A SP~:r s ...,F'T 1stlll>lft-• □- □ ..... 1stlMI...S.• Dam □""' , ____ □-o..,. 1•---□- □""' 1st ___ □- □ ... ,., ___ o ... Qpm , ____ Dam __ opm . ::ind--at □- Opn, __ .. □- □""' ----□- Qpa, ---· 01111 Oi,n, ----□- □pm ---· Dam Qpn 2ncl--- □- -- □""' ! Part e; PAYMENT OF WAGIE$ 32. Were yw paid or promiSed a FIXED amount of wages per pay ~od. ~ matmr how many hours you worked (fur &Kampla, $400 per week, fegaro!ess of how many hOurs you worked)'? Q9YEs. I was paid$ 0.00 ~ Oc1ay 0WMk 0....ery 2 Wffks l8imontb Offmi-monthly Ootner(1pedfy):. ___________ ~----- I was promised S 15,500.00 pet Oday □-k Devery 2 weeks l8Jmontb Owml-inomhly Oottierlspec;ify): __________ _____ _ 33a. Were you an HOURLY empklyee? DYES. I was paid $ ____ per hour. 33b. If you were an HOURLY employee, were ;-ou paid or PfllliUSed mcmt lfian ona hourly rate (b.se~ oo th« h:X.lri ~ WOO(od e< differen: job tam}? □YES (~) I was promised $ per hour. liJNO l 35. Were you paid by COMMISSlOtl? □YES ~NO j Part 7: WAGES. COMPENSATION & PENAL TIES OWED 36. CLAIMS CLAIM PERtOD: Cl.AIM PERIOD: ! AMOUNT EARNED/ CL>JMED {Chec;klllll>On5belowuiat.apptyJ START DATE l:ND DATE ' (Monthf OayJ Year) {Monthl Day/ Year) / @REGULAR WAGES ff« non-ovttrtilMI hours) 4-1-2016 9-30-2016 93,000.00 I [ s I 0MEALPERIOOWAGES s s 0 SPU1' SHIFT PREMIUM I , $ 0 REPORTIHG TIME PAY 0COMMlSS10NS - Is !BleuSIHESS EXPENSES s 0 UNLAY."FUL DS>UCllONS I ~ OTHER (Sp9(:ily}: I f I . • I CJ . Labor Code Violations See Supplement Letter s In support o mtia aim ENTER SUBTOTAL (add aH Amounts Earned/Claimed): $ 117,430.00 ENTER TOTAL AMOUNT PAID: $ 0.00 GRAND TOTAL OWED [Subtotal minur, Total A mount Paid] : $ 117,743.00 37 Checii. OOX,:e5) :f yo.,; are ~.n~- 9 Waiti~ .t1m9 pemi1UK [l.abor eo- §203) ~ ~ for"tioonei!dw chef;;ks (~ iS$ued with insufflcient funds) [lat>or Code §Z0~.1} ,!1 .· l . J a.SE; Fust., 1 ,·N.c1!.~?Iotl:"S'f -;-4t,.x1 V Claimant: Address of Claimant: Phone No. of Claimant: Name & Address of Advocate: Phone No. of Ad1•ocnlc: Address chnngc of Claimant as of: RECORD OF RECEIPTS Date Check, Receipt Number Amount Received Cash, etc. Address of1fofcmlant: Phone No. of Defendant: Address change of Defendant as of: Divis1gn Check Dntc Paid Balnnce Due Number Interpreter Needed: Action Number: Docket Date Date Closed DATE(S) CLAIM RECEIVED DATE BOJ.'l~ COMPLAINT FILED (if npplitable) RECORD OF PAYMENTS TO CLA,IMANT Sigontlll'e/Remnrks DATE RCI COMPLAINT FILED (if applicnble) CONFERENCE;DATES PEND:DATES NOTES: VIA ELECTRONIC MAIL THE CARTER LAW GROUP EMERYVILLE, C ALIFORNIA (ADMITTED CALIFORNIA STATE BAR) February 8, 2018 VIA CERTIFIED MAIURETURN RECEIPT REQUESTED Division of Labor Standards Enforcement 6150 Van Nuys #206 Van Nuys, CA 91401 Email: LaborComm.WCA.VNO(a)dir.ca.aov P a ge 11 Re: Steven Borochoff vs. Eyeris Technologies, Inc. & Modar Alaoui (Individually} Attention: Department of Labor Standards Enforcement ("DLSE"): This letter serves as a supplement to the Initial Report of Claim ("Report of Claim") submitted herewith in support of the Wage and Hour claim of Steven Borochoff {"Borochoff') against his former employer, Eyeris Technologies, Inc. ("Employer" and/or "Company") and Modar Alaoui ("Alaoui"), With this letter and the Report of Claim, please find enclosed: Exhibit A: • Employer's Offer of Employment dated March 28, 2016. • Employer's Global Vice President of Sales Job Description entitled "Global VP of Sales Responsibilities." • Employer's "Employee Confidential Information and Inventions Assignment Agreement." Exhibit B: • Employer's Consulting Agreement. Exhibit C: • Demand for Payment of Wages Exhibit D: • California Secretary of State Business Entity Records re: Eyeris Technologies, Inc. filed by Modar Alaoui on May 29. 2014. The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us .•\ Page 12 Summary of Wage Claim Section 3357 of the California Labor Code {"Labor Code") provides that "[a]ny person rendering service for another, other than as an independent contractor [] is presumed to be an employee." For the reasons further detailed below, the Company misclassified Steven Borochoff as an "independent contractor'' rather than as an "employee" in order to avoid paying Mr. Borochoff wages as required by the Labor Code. Our Report of Claim is filed to recover unpaid wages and appropriate penalties. Wage Claim Mr. Borochoff asserts at least $117,430.00 in wage claims and penalties against the Company. Labor Code§ 204 (Unpaid Wages): Labor Code§ 226 (Paystubs): Labor Code § 203 (Waiting Time): Labor Code § 226.8 (Misclassification): Labor Code§ 218.6 (Interest): $93,000.00 $1,150.00 $23,280.00 TBD TBD Labor Code§§ 218.S(a), 1194(a) {Fees/Costs): TBD $117,430.00 [Next Page] The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us _.\ ' I ,·. , ·: P a ge 13 Mr. Borochoff 's Employment On May 29, 2014, Eyeris Technologies, Inc. ("Company") filed a Statement and Designation by Foreign Corporation to qualify to transact business in the State of California. ( See Exhibit D). On March 28, 2016, the Company's Chief Executive Officer, Modar Alaoui, delivered an offer of employment ("Offer Letter"}, an Employment Job Description and an "Employee Confidential Information and Inventions Assignment Agreement" to Mr. Borochoff. (See, Exhibit A). The Offer Letter provided, inter alia, that Mr. Borochoff would become the Global Vice President of Sales and receive an annual salary of $125,000.00. The Offer Letter further stated: "Your salary will be $125,000 per year, less payroll deductions and withholdings, paid upon the Company's closing of one or more debt or equity financing raising an aggregate of not less than $500,000. Your travel expenses, however, will be reimbursed immediately with prior approval." Despite the foregoing language, Mr. Borochoff was given the impression that he would be paid as any employee would be paid by an employer. Mr. Borochoff had every reason to believe that he would be properly compensated because the Company's Chief Executive Officer, Modar Alaoui, repeatedly assured him that wages would in-fact be disbursed by the Company. March 28, 2016 Mr. Alaoui informed Mr. Borochoff, both verbally and in writing, that the Company (1) had received a term sheet from Hack Ventures, Inc., and that (2) Hack Ventures would provide the Company with $3M in equity financing. On March 28, 2016, Mr. Alaoui assured Mr. Borochoff that the equity financing would be made available to the Company within "two or three weeks." March 31, 2016 During a conference call with Mr. Borochoff, Mr. Alaoui declared that the Company would not move forward with the offer of employment. Instead, Mr. Alaoui delivered a "Consulting Agreement" to Mr. Borochoff which stated that our Client would serve in the capacity of the Global Vice President of Sales, on a full-time basis (40 hours per week} but would be designated as an "independent contractor." (See, Exhibit 8). The Consulting Agreement provided that Mr. Borochoff would receive $15,500.00 per month from April 1, 2016 to September 30, 2016. Like the Offer of The Carter l aw Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us ,\ :,- !. Pa g e 14 Employment Letter, the Consulting Agreement stated that Mr. Borochoff would be paid "upon the Company's closing of one or more debt[s] or equity financing raising an aggregate of not less than $1,000,000.00." April 2, 2016 In specific reliance upon Mr. Alaoui's repeated representations that the Company would have the funds necessary to pay him, Mr. Borochoff ratified the Consulting Agreement. After ratifying the Consulting Agreement, Mr. Borochoff worked for the Company fulltime and in a manner faithful to the Employment Job Description which the Company prepared and delivered to Mr. Borochoff along with the Employment Offer Letter on March 28, 2016. Mr. Borochoff's function as Global Vice-President of Sales under the Employment Offer Letter and the Consulting Agreement was the very same employment position in terms of the duties Mr. Borochoff was expected to perform, and did in fact perform, for the Company. Mr. Borochoff continued to function as an employee while the Company exercised the control typically found in an employer/employee relationship. Julv21. 2016 Mr. Borochoff asked Mr. Alaoui when the Company would deliver wages for work performed since his start date on April 2, 2016. At that time, Mr. Borochoff had worked for the Company full-time for sixteen (16) weeks without pay. Mr. Alaoui stated that the Company would start making payments. No such payments were ever made or received. September 12, 2016 Mr. Borochoff submitted a proactive written demand to the Company seeking $93,000.00 in compensation for work performed ($15,500/month for 6 months ($15,500 times 6 months = $93,000.00) per the terms of the Consulting Agreement. The Company ostensibly ignored Mr. Borochoff's request and wages were not paid. In hopes of avoiding a dispute, Mr. Borochoff also attempted to engage in good-faith discussions with Mr. Alaoui in an effort to be paid for work performed. Mr. Borochoff's amicable overtures and demands for payment of wages fell on deaf ears and no payments have been made to date. Ill Ill The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us \ . ~- P ag e 15 September 30, 2016 Mr. Borochoff's employment was terminated. Analysis Misclassification - Labor Code § 226.8 In 2011, the California legislature passed Senate Bill 459 prohibiting the willful misclassification of individuals as independent contractors. The new legislation created civil penalties of up to $25,000 per violation. The Labor Commissioner evaluates a misclassification claim with the presumption that the worker is an employee. See, Labor Code§ 3357. An employer - employee relationship will be found if (1} the principal retains pervasive control over the operation as a whole, (2) the worker's duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. See, Yellow Cab Cooperative v. Workers Compensation Appeals Board, 226 Cal.App.3d 1288 (1991). The label a company applies to its relationship with a given individual is not controlling. Rather, someone who is classified as an independent contractor is entitled to the legal rights of an employee upon a showing that applicable law required that classification. S. G. Bore/fa & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341, 349, (1989); Ruiz v. Affinity Logistics Corp., 754 F. 3d 1093, 1101 (9th Cir. 2014}. Whether a given independent contractor has been correctly classified depends on a number of factors. However, service providers who work full-time, under some supervision and who are not engaged in a specialized trade or business generally should be classified as employees. See, Labor Code§ 3357; 29 U.S.C. 203(e}. Mr. Borochoff served as the Global Vice-President for the Company from April 1, 2016 to September 30, 2016. This labor board claim refers to his entire six (6) month term of employment. When the Company offered Mr. Borochoff a full-time employment position on March 28, 2016, the included job description summarized the Company's expectations of Mr. Borochoff as a Company employee. Not surprising, during his employment, Mr. Borochoff addressed the employment duties announced by the Company. These duties were carried out at the direction of the Company and the Company's Chief Executive Officer. As stated by the Company (Exhibit A), Mr. Borochoff's duties of employment were as follows: The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us /. ,. Pa g e 16 • Develop plans and strategies for developing business and achieving the company's sales goals • Create a culture of success and ongoing business and goal achievement - possibly more important than the first item on this list • Manage the sales teams, operations and resources to deliver profitable growth • Manage the use of budgets • Define optimal sales force structure • Hire and develop sales staff • Become known as an employer of choice and a sales force that top sales people want to join • Define and oversee sales staff compensation and incentive programs that motivate the sales team to achieve their sales targets • Define and coordinate sales training programs that enable staff to achieve their potential and support company sales objectives • Manage customer expectations and contribute to a high level of customer satisfaction • Define sales processes that drive desired sales outcomes and identify improvements where and when required • Put in place infrastructure and systems to support the success of the sales function • Provide detailed and accurate sales forecasting • Compile information and data related to customer and prospect interactions • Monitor customer, market and competitor activity and provide feedback to company leadership team and other company functions • Work closely with the marketing function to establish successful support, channel and partner programs • Manage key customer relationships and participate in closing strategic opportunities • Travel for in-person meetings with customers and partners and to develop key relationships Mr. Borochoff also engaged in the following specific employment duties: • Conducted general oversight of other sales staff (Duk Chun) • Recruited and referred other employment candidates to the team (CFO) • Held meetings with prospects to convert them to paying customers • Directed to negotiate various contracts with customers (Toyota) • Provided reports as to status of contracts and potential new customers to CEO The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us P a g e 17 • Consistently introduced to third parties by the Company as the Company's Global Vice President of Sales • Routinely directed to travel to trade shows to engage prospective customers Under California law, the Department of Labor Standards Enforcement {"Commissioner") should assess Mr. Borochoff's relationship with the Company under the presumption that Mr. Borochoff was an employee. See, Labor Code§ 3357. We ask the Commissioner to consider the Offer of Employment drafted by the Company. We urge the Commissioner to vet the Employment Job Description and then consider our forthcoming documentary and testimonial evidence which will demonstrate that Mr. Borochoff performed the functions of a fulltime employee as corroborated by the very Employment Job Description the Company unilaterally drafted and submitted to Mr. Borochoff. A court or an administrative agency will find an employer/employee relationship where (1) the employer has the right to discharge the worker at-will/without cause, (2) the worker engaged in work which is usually done under the direction of an employer, (3) the employer has the right or ability to control details of the work performed, and (4) the work is part of the regular business of the employer. See, Rest.2d Agency, § 220. The relationship between Mr. Borochoff and the Company satisfies each of these factors. Therefore, the Company misclassified Mr. Borochoff as an independent contractor. Because Mr. Borochoff served as a Company employee, Mr. Borochoff is entitled to all wages due plus penalties and interest. California Labor Code Section 226.8 imposes penalties on employers who willfully misclassify their employees as independent contractors. The penalties for violating Section 226.8 include fines between $5,000 and $15,000 per violation of the law, in addition to any other fines allowed by law. If the employer is engaged in a pattern or practice of violating this law, the fines are increased to between $10,000 and $25,000 per violation. In Noe v. Superior Court, 1 the California Court of Appeals found that the language regarding enforcement of section 226.8 appears in subdivision (g) and that this subdivision authorizes the Labor Commissioner to enforce the statute "pursuant to Section 98 or in a civil suit." The court in Noe held that section 226.8 does not provide a private right of action. Noe v. Superior Court, 237 Cal.App.4th 316, 187 Cal.Rptr.3d 836 {2015) The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us .\ I t. :·, Pa ge 18 If the commissioner proceeds under section 98 and determines a violation has occurred, he or she "may issue a citation to assess penalties." (Labor Code§ 226.8, subd. (g)(2).) We request the Commissioner to assess penalties against the Company consistent with Noe and Labor Code Section 226.8, subd. (g)(2). Payment Calculations Based on a monthly salary of $15,500.00, and given that Mr. Borochoff worked for exactly 6 months, the wages due are $93.000.00. At $15,500.00 per month with a 40 hour work week, Mr. Borochoffs hourly wage would have been approximately $97.00 per hour. labor Code§ 204 (Unpaid Wages) Because Mr. Borochoff worked for the Company on a full-time basis from April 1, 2016 to September 30, 2016, he is entitled to $93,000.00 in wages for work performed. Waiting Time Penalties (labor Code § 203) An employer who willfully fails to pay, without abatement or reduction, any wages of an employee who is discharged or who quits then the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid in full with a limit of thirty (30) days. See, Mamikav. Barca, 68 Cal. App. 4th 487 (1998). As memorialized by letter dated December 13, 2016 (See, Exhibit C), Mr. Borochoff has made repeated demands to be paid. The Company has refused. Because Mr. Borochoff did not receive all wages due at termination, Mr. Borochoff is entitled to waiting time penalties at his daily rate for 30 days. Penalty: $97.00 per hour x 8 hours = $776.00 per day x 30 days= $23,280.00 Paystubs (labor Code § 226) During the course of his employment, Mr. Borochoff should have been paid bi-monthly and should have been provided with twelve (12) paystubs which would have memorialized the wages he earned. Because Mr. Borochoff received no such wages and was never provided with paystubs, Mr. Borochoff is entitled to a $1,150.00 penalty. The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650.735.1090 Website: www.seancarter.us . \ I I ,. P a g ..: I 9 Attorneys' Fees & Costs (Labor Code§§ 218.S(a), 1194(a)) An employee who successfully brings a wage claim is entitled to an award of reasonable attorney fees and costs. See, Labor Code§§ 218.S(a), 1194(a); See also, On-Line Power, Inc. v. Mazur, 149 CA4th 1079, 1086, (2007) and this rule applies to wage claims by all employees, including salaried corporate executives. Conclusion Based on the foregoing, we respectfully request that the DLSE afford the relief sought by Mr. Borochoff's Report of Claim and this letter including, but no limited to, unpaid wages, interest, penalties and attorneys' fees/costs. Respectfully submitted, ~ Sean T. Carter, Esq. STC/db Enclosures: Four (4) Attachments The Carter Law Group 2340 Powell Street - Suite 355 Emeryville, California 94608 Email: sean@seancarter.us Direct Dial: 650. 735.1090 Website: www.seancarter.us . . STATE OF CALIFORNIA DATEFILED Department of Industrial Relations 02-08-'2018 Labor Commissioner's Office DISTRICT OFFICE · 6150 Yan Nuys Blvd, Room 206 VanNuvsWCA Van Nuys, CA91401 TAKEN BY Email: laborcom,m.wca,vno@dir.ca.gov . Te.I: {818)901-5315 Fax: (818) 901-5307 PLAINTIFJh · Steven Borochoff, DEFENDANT(S); · Eyeris Technologies, Inc., a Foreign Corporation · State Case Number: I COMPLAIN'.f WC-CMc..459162 PLAINTIFF ALLEGES: 1. PlaiOtiff was/is empli;>yed by the de~e{ldant(s) nanted abo:ve to perform personal· services as: VP Sales 2. for the period April 4, 2016 to Septell!bCr 30, 2016 3. in the County of Los Angeles, Ca,lifornia; under ihe terms of a written agreement. . 4. that there is. due, owing and payable fromdie defendant to the-plaintiff an amount as and for wages, penalties and/or othe,r demands for compensation as set out below: Am~nt Less CIAJM Earned ()f Amount Balance Due Accrued Paid REGOIAR WAGES - From 04/04/16 through 09/30/16, $93,000.00 $93,000.00 plaintiff claims regular wages earned (not including overtime hours worked) al the rate of $15500.QO per' :mbnlh., for 6 pay periods. LlQUIDATED DAMAGES: Faihire to Pay Minimum Wages- - $10;160,00 $10,160.00: .At least minimum wage. must be paid for all hours worked, .including any overtime hours worked. An employee is entiUed to recover liquidated damages in an iunount equal to minimum wages earned but not paid as required by law. (See Labor Code Section 1194.2) From 04/04/16 through 09130/16, plaintiff claims liquidc1ted damages, as follows: . Minimum wage.s earned at$10.00 per hour, for a .total of 1016 hour{s) where ai. least minimum wage was not paid. Less a total of $0.00 paid. Liquidated damaJteS eoui:ll the 'balance du~. ACCESS TO PAYROLL RECORDS; Penalty~.FaUure.by ap -$750.0Q· $750.00 employer to permit a current or former employee. to inspect or copy itemized payroll records as set· forth in Labor Code Section 226, no later than 21 calendar days from the date of the request to inspect or copy such records, entitles the employee to recover a penalty of $750 from the employer. (See Labor Code Section 226(1)) . Plaintiffrequested to inspector copy itemized payroll records pertaining to plaintiff's employment. Defendant failed to permit inspection or coovin2 within 21 calendar davs of the reouest. ACCESS TO PERSONNEL RECORDS: Penally- Failure by $750.0() $750.00 an employer to permit a current or former employee, .or his or· her .representative, to inspect or copy personnel records as set forth in Labor Code Section 119.85 entitles the current or former employee to recover a penalty of$750 from the employer. (See Labor Code Section 1198.S(k)) WCA SS (Rev. 08/15) Complaint CIAIM . Oefendant failed to ~nnitinspection ot copying of plaintiff's personnel records as req11ired ui)der Lilbor' Code Section 1198.S(k). WAITING TIME PEN AL 1'IES ~ !fan employer willfully fails to·pay, in accordapce withl.abor Code Section. 201, an:y'wllges o(an employee who is discharg~d, the wage~ of ~e employee continue as a penalty {fom their due date a~. the same rate until . paid, up to a illllXimum of 30 days, (:;ee Labor Code Seciion · 203) . ·· . Plaintiff was discharged <>il 09/30/16, on which date wages were due. P:l!iintiff claims. waiting tim~ .penalties for30 days' wort!} of wages, based on a. i-ate of P!lY of $715.36 per day. Daily rate of pay is Cl,llcolated as f()llows: 8 regular hours at$89.42 per . ltour (hourly equivalent of$15;500,00 ,monthly salary)= $715.36 . TOTAL CLAIMED Amount Earned or Ac;c(1led $21,460.80 Interest pursuant to Labor Code Section{s). 98.l(c), 1194.2 and/or 2802(b). Less Amount Paid Ba.lance Due $21,460.80 $1l6,120.80 A docurnerit detailing the amount(s) due may be.attached. Amount(s) due ilS set forth herein may be approximate and subj~ct to modification based on evidence presented at hearing. PLAINTIFFCERTIFIES THAT THE l'.OREGOlNG IS-TRUE AND CORRECT TO THE BEST OF BIS/JIER KNOWLEDGE AND BELIEF. . . . . . . . . . .· Executed at: Van Nuys, County of Los Angeles, California Dated: ~~JI-'- Plf:5 Da(e of Signatur~ . WCA 55 (Rev. 08/15) Complaint Page l of 2 Wf2-CM•459i62 State of California · Department of Industrial Relations DIVISION OF LABOR STANDARDS ENFORCEMENT CERTIFICATION OF SERVICE BY MAIL (C.C.P. 1013A) OR CERTIFIED MAIL I, Rosette Ekmekjian, do hereby certify that I am a resident of or employed in the County of Los Angeles, over 18 years of age, not a party to the within action, and that I am employed at and my business address is: LABOR COMMISSIONER, STATE OF CALIFORNIA 6150 Van Nuys Blvd Room 206 Van Nuys; CA 91401 . Tel: (818) 901-5315 Fax: (818) 901-5307 I am readily familiar with the business practice of my place of business for collection and processing of correspondence for mailing with the United States Postal Service. Correspondence so collected and processed is deposited with the United States Postal Service that same day in the ordinary course of business. On November 19, 2018, at my place of business, a copy of the following document(s): Notice of Hearing, Complaint and Answer was(were) placed for deposit in the United States Postal Service in a sealed envelope, by First Class and Certified with postage fully prepaid, addressed to: NOTICE TO: Steven Borochoff, Service Address The Carter Law Group, Attn: Sean T. Carter, Attorney 2340 Powell Street Suite 355 for Steven Borochoff, Emeryville, CA94608 Service Address Additional Service Addres.5(es) Corporation Service c;ompany, a Delaware Corporation which will do business in California as CSC - 2710 GATEWAY OAKS DR STE · Lawyers Incorporating Service, 150N Agent for Service for Eyeris SACRAMENTO, CA 95833 Technologies, Inc., a: Foreign Corporation Ari Law, P.C., Attn: Ali Ari Aalaei, Esq., Attorney for Eyeris 90 New Montgomery St., Suite 900 Technologies, Inc., a Foreign San Francisco, CA 94105 Corporation and that envelope was placed for collection and mailing on that date following ordinary business practices. I certify under penalty of perjury that the fore going is true and correct . . Executed on November 19, 2018. at Van Nuys, California. STATE CASE NUMBER: WC-CM-459162 WCA 66 (Rev. 3/06) Certification of Mailing Page 1 ofl Exhibit D Carter Declaration Exhibit arter eclarati (818) 901-5315 T;,pe ,, Outgoing call 11:43 AM Thursday, Dec 13, 2018 11 min 43 sec (318) 901-5315 T-me [,31- Dali's, :xn Outgoing cafi ”£ 1 3 Thursday, Dec 1.3, 201.8 11 min 43 sec Exhibit E Carter Declaration Exhibit arter eclarati 2/4/2019 Details Case Information 18CV340059 I Eyeris Technologies, Inc vs Steven Borochoff et al Case Number 18CV340059 Case Type Other Contract Unlimited (37) Party Plaintiff Eyeris Technologies, Inc Defendant Borochoff, Steven Court Superior Court of Santa Clara - Civil Case Status Active Active Attorneys..,. Lead Attorney Aalaei, Ali A Retained Work Phone 4158309968 File Date 12/14/2018 2/4/2019 Details Defendant Borochoff Management Consultants Events and Hearings 12/14/2018 Civil Case Cover Sheet 12/14/2018 Complaint (Unlimited) (Fee Applies) 12/14/2018 Summons: Issued/Filed 12/27/2018 Clerk Rejection Letter • Comment Envelope# 2281619 - Your new action has been initiated. However, hearing date for Motion(s) must be reserved prior to filing. Please call Law and Motion department to reserve a date. 01/11/2019 Motion: Compel • Comment hrg: 03/19/2019, 9:00 AM, dept 18 01/11 /2019 Memorandum: Points and Authorities 01/11/2019 Declaration: In Support• Comment RE: Benjamin Martin 03/19/2019 Hearing: Petition Compel Arbitration • Judicial Officer Kirwan, Peter Hearing Time 9:00AM Comment by Pit Eyeris Technologies (Benjamin Martin) 2/4/2019 03/26/2019 Conference: Case Management • Judicial Officer Strickland, Elizabeth Hearing Time 3:00 PM Details 214/201 9 Details 03/26/2019 Conference: Case Management v Judiciai Officer Strickland, Elizabeth Hearing Time 3:00 PM Exhibit F Carter Declaration Exhibit F Carter eclarati To: Sean Carter Page 1 of 39 2019-01-1113:33:10 (GMn 14155209456 From: Ali A. Aalaei FAX COVER SHEET TO Sean Carter COMPANY FAX NUMBER 16504728080 FROM Ali A. Aalaei DATE 2019-01-1113:32:25 GMT RE Defendant's Answer; WC-CM-459162 COVER MESSAGE T othe Labor Commission administering the hearing on the above-referenced complaint: A motion to compel arbitration has been filed in Santa Clara County Superior Court under the parties' agreementto arbitration their disputes. It is included herewith. Please take the hearing on the complaint off calendar pending resolution of the motion to compel under the authority OTO, L.L.C. v. Kho, (2017) 14 Cal. App. 5th 691 , 699-901. Thank you. BenjaminMartin Ari Law PC Counsel for Eyeris Technologies, Inc., (Defendant) WWW .MYFAX . COM To: Sean C~rter Page 2 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A Aalaei 2 3 4 5 6 7 8 9 lO I I 12 13 14 15 16 17 18 ARILAW,P.C. Ali A. Aalaei. State Bar No. 254713 Benjamin Martin, State Bar No. 257452 90 New Montgomery Street_, Ste. 900 San Francisco, CA 94105 Phone:415-830-9968 Fax: 415-520-9456 Attorneys/or Plaintttf Eyeris Technologies, Jnc. SUPERIOR COlTRT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA UNLIMrTED JURISDICTION EYERIS TECHNOLOGIES. INC., a business entity, Plaintiff, VS. ) ) ) ) ) ) ) STEVEN BOROCHOFF, in individual, ) BOROCHOFF MANAGEMENT CONSlJLTANTS, a business entity, and DOES 1-; 10 inclusive. ) Defendants. ) ) Case No. l 8CV340059 HRG 3/ 19/19 DECLARATION OF PLAINTIFF'S COUNSEL BENJAMIN MARTIN IN SUPPORT OF PLAINTIFF EYERIS TECHNOLOGIES, INC.'S MOTION TO COMPEL ARBITRATION Date: March 19, 2019, Time: 9:00 a.m. Judge: Hon Peter H. Kirwan Dept.: 18 19 I, Benjamin Martin, hereby declare, 20 l. I work for Ari Law PC, the firm that represents Plaintiff Eyeris Technologies, Inc. in t11is matter. 21 I am a member of the California State Bar. Everything in this declaration is based upon my own 22 personal knowledge unless otbenvise specified. 23 2. Plaintiff Eyeris and Defendant Borochoff Management Consultants ("BMC") entered into a 24 Consulting Agreement on April 2, 2016. Attached hereto as Exhibit A is a true and correct copy. 25 3, Mr. Borochoff claims on bis Linkedin profile that is employed by BMC as "VP Sales 26 Consultant." A true and correct copy of the Linked in webpage of Steven. Borochoff is attached 27 hereto as Exhibit B. 28 4. Defendants filed a complaint with the DepartJnent of Industrial Relations Labor Commissioner on DECLARATION OF PLAINTIFF'S C0lJNSEL BENJAMIN MARTIN IN SUPPORT OF PLAINTIFF EYERTS TECHNOLOGIES, INC. 'S MOTION TO COMPEL ARBITRATION To: Sean Carter Page 3 of 39 2019-01-1113:33:10 (GMn 14155209456 From: Ali A. Aalaei 2 3 4 5 6 7 8 9 lO February 8, 2018. A hearing on Defendants DLSE comp]aint is scheduled for December 18, 2018. A true and correct copy of the notice of hearing and the DLSE complaint are attached hereto as Exhibit C to Martin Deel., iJ4 5. On December 10, 2018, l transmitted a letter to Mr. Sean Cater, Defendants' counsel in this matter, requesting that Defendants dismiss their DSLE complaint, and bring their claims in arbitration wider the parties' promise to arbitrate their di~-putes. A lrue and correct copy of Plaintiff's request for dismissal is attached hereto as Exhibit D. 6. On December 11, 2018, Mr. Carter and myself discussed the matter on the telephone. Mr. Carter disagreed with the scope of the arbitration agreement and refused to dismiss the DSLE hearing. 11 I declare under the penalty of perjury under the Laws of the State of California that the foregoing is true 12 and correct. Executed in San Francisco, CA on January 10, 2019. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Respect:fu11y submitted, ARI LAW PC a. - ~ By: __ ~--- - - --- Benjamin Martin AriLaw,PC Attorney for PlaintiffEyeris Technologies, Inc. 2 DECLARATION OF PLAINTIFF'S COUNSEL BENJAMIN MARTIN IN SUPPORT OF PLAINTIFF EYERJS TECHNOLOGIES, INC. 'S MOTION TO COMPEL AR.BITRA TION To: Sean Carter Page 4 of 39 2019-01-11 13:33:10 (GMT) 14155209456 From: Ali A. Aalaei EXHIBIT A To: Sean Carter Page 4 of 39 201 9-01- 1 13:33:10 (GMT) 14155209456 From: Ali A, Aalaei XHIBI To: Sean Carter Page 5 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei EYERIS TECHNOLOGIES, INC. CONSULTING AGREEMENT This Consulting Agreement (the "Agreement") is entered into by and between EYERJS TECHNOLOGIES, l~c. (the "Company"). a Delaware corporation and BoROCHOFF MANAGEMENT CONSUL'rANTS ("'Consultant"). I . Consulting Relationship. During the term of this Agreement, Consultant \\lill provide consulting services (the "Services") to the Company as described on Exhibit A attached to this Agreement. Consultant shall use Consultant's best efforts to perform the Services such that the results are satisfactory to the Company. 2. Fees; Expenses. As consideration for the Services to be provided by Consultant and other obligations, the Company shall compensate Consultant as specified in Exhibit A attached to this Agreement. Consultant shall be reimbursed for reasonable travel and other out-of-pocket expenses incurred by Consultant at the request of the Company in connection with the Services; provided that Consultant provides the Company with receipts for such expenses and obtains prior approval of the Company for any expenses in excess of $200. 3. Term and Termination. Consultant shall serve as a consultant to the Company for the period set forth on Exhibit A Notwithstanding the above, either party may terminate this Agreement at any time upon ten days' written notice. In the event of such tennination, Consultant shall be paid for any portion of the Services that have been performed prior to the tennination. The provisions of Sections 3, 4, 6, 7, 8, and 9 shall survive any termination of this Agreement. 4. Independent Contractor. Consultant's relationship 'Witb the Company will be that of an independent contractor and not that of an employee, agent or representative of the Company. ~either Consultant. nor any partner, agent or employee of Consultant, has authority to enter into contracts that bind the Company or create obligations on the part of the Company without the prior written authorization of the Company. Consultant acknowledges and agrees that Consultant (or Consultant's employees, if Consultant is an entity) will not be eligible for any Company employee benefits. Consultant shall have fuH responsibility for applicable withholding taxes for all compensation paid to Consultant, its partners, agents or its employees under this Agreement, and for compliance with all applicable labor and employment requirements with respect to Consultant's self- cmployment, sole proprietorship or other form of business organization, and Consultant's partners. agents and employees, including state worker's compensation insurance coverage requirements and any US immigration visa requirements. Consultant further agrees to indemnify the Company and hold it harmless to the extent of any obligation imposed on the Company to pay withholding taxes or similar items. 5. Consulting or Other Services for Competitors. Consultant represents and warrants that Consultant does not presently perform or intend to perform, during the term of the Agreement, e-onsulting or other services for, or engage in or intend to engage in an employment relationship with, companies who businesses or proposed businesses in any way involve face analytics and emotion To: Sean Carter Page 6 of 39 2019·01-1113:33:10 (GMT) 14155209456 From: Ali A. Aa laei writing, specifying the organization with which Consultant proposes to consult, provide services, or become employed by and to provide information sufficient to allow the Company to detennine if such work would conflict with the terms of this Agreement, including the terms of the Confidentiality Agreement, the interests of the Company or further services which the Company might request of Consultant. If the Company determines that such work conflicts with the terms of this Agreement, the Company reserves the right to terminate this Agreement immediately. 6. Confidential Information. Consultant agrees to hold in strictest confidence, and not to use, except to the extent necessary to perfonn Consultant's obligations under this Agreement, or to disc1ose to any person or entity with.out prior written authorization of the Company, any confidential infonnation of the Company. In this regar~ Consultant shall sign, or has signed, a Confidential Information Agreement {the "Confidentiality Agreement") in the form attached hereto as Exhibit B on or before the date it commences providing Services under this Agreement. Consultant acknowledges the Confidential Information as defmed in the Confidentiality Agreement shall be deemed to include any Company confidential or proprietary information which the Consultant receives directly or indirectly in the course of providing Services, orally or by drawings or observation of parts or equipment or created by the Consultant in the course of providing Services. In the event that Consultant is an entity or otherwise will be causing individuals in its employ or under its supervision to participate in the rendering of the Services, Consultant warran.ts that it shall cause each of such individuals to execute a Confidentia]ity Agreement. 7. Conflicts with this Agreement. Consultant represents and warrants that this Agreement does not conflict with, and Consultant's performance hereunder will not breach, any agreement or obligation to which Consultant is a party or by which Consultant is boW1d. Consuitant will not knowingly infringe upon any intellectual property right of any current or former client, employer or third party in the performance of the Services. 8. Non-Solicitation. Consultant agrees that during the term of the Services with the Company, and for a period of twelve (24) months immediately following the termination of the Services, Consultant shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company's employees or consultants to terminate their relationship with the Company. or attempt to solicit~ induce, recruit, encourage or take away employees or consultants of the Company, either for Consultant or for any other person or entity. Further, during the term of the Services with the Company and at any time following termination of the Services with the Company, Consultant shall not use any confidential information of the Company to attempt to negatively influence any of the Company's clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company. 9. Arbitration. Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The number of arbitrators shall be three. The p1ace of arbitration shall be Santa Clara, California California law shall apply. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. 10. Miscellaneous. Any term of this Agreement may be amended or waived only with the written consent of the parties. This Agreement, the exhibits hereto and the Confidentiality Agreement constitute the sole agreement of the parties and supersedes all oral negotiations and prior writings with -2- I 10625016vl To: Sean Carter Page 7 of 39 2019-01-1113:33:10 (GMD 14155209456 From: Ali A. Aalaei respect to the subject matter hereof. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt. when delivered personally or by courier, overnight delivery service or confirmed facsimile, 48 hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party's address or facsimile number as set forth below. or as subsequently modified by ·written notice. If one or more of the provisions in this Agreement are deemed void by lawi then the remaining provisions will continue in full force and effect. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument The validity, interpretation, construction and perfonnance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws. Each of the parties hereto consents to the exclusive .iurisdidion and venue of the courts of Santa Clara County, California. EACH PARTY ACKNOWLEDGES THAT, lN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADv1CE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF TIITS AGREEMENT. nns AGREEMEI\'T SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF. [Signature Page Follows] -3- 110625016 vi To: Sean Carter Page 8 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. AalaE:i The parties have executed this Agreement on the respective dates set forth below. EYERIS TECHNOLOGIES, L'iC. By:~ Name: Modar Alaoui Title: CEO _ __::..-=-._;:__ ____ _ Address: 530 I ytton Ave. 2nd Floor, Palo Alto, CA 94301 Date: _ ___...4/=2,._.,/2,._,.0'--'-1-=-6 ___ _ NT Si .,.~:· Name: Address: PO Box 3277 Westlake Village, CA 91359 Date: ...,_~ 1. · 2-o I (p 110625016 vl To: Sean Carter Page 9 of 39 2019-01-11 13:33:10 {GMT) 14155209456 From: Ali A. Aalae_i EXHIBIT A Start date: April 1st, 2016, Six (6) months, unless tenninated earlier by either party pursuant to section 3 of this eement. Global Vice President of sales 40 hours per week. Company: EYERIS TECHNOLOGIES, INC. By.~ F Name: Madar Alaoui Title: CEO Address: 530 Lytton Ave. 2nd Floor, Palo Alta, CA 94301 Date: --4~/2+- 1,., p11 I.- Address: ]:?v ~ Cl.i 3 ~77 Wti-Si"L.4.t:~ v"--f-1 b t:. Cit tJioo-9 , To: Sean Carter Page 10 of 39 110625016 vi 2019-01-11 13:33:10 (GMT) EXHIBITB Confidential Information Agreement 14155209456 From: Ali A. Aalaei To: Sean Carter Page 1O of 39 201 9-O1v11 13:3 :10 (GMT) 141 55209456 From: Ali Affatae] EXHIBIT Confidential Information Agre ment {113625016 vl To: Sean Carter Page 11 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei EXHIBIT B To: Sean Carter Page 11 of 39 2019-01 - 1 3: 3:10 (GMT) 14155209456 From: AH A. Aaiaei XHIBI To: Sean Carter Page 12 of 39 Contaqt · ·v,tv11N.linkedlri.con1lm/ steveborochoff · Top Skills Start~ups . Enterprise Software · loT 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei Steve Borochoff VP Sales I Advisor I Software, Systems, Sensors I Enterprise, OEM, Embedded I Artificial Intelligence I loT I Summary VP Sales, Software, loT, Automotive A dynamic, client facing, senior sales leader who has successfully built and scaled high performing businesses consisting of software, cameras, components, and hardware. Expertise in developing go-to-market strategies, crafting strategic partnerships thn.i business development activities, and building mentoring and leading direct and channel sales organizations globally. Product breadth has included enterprise application software licensed as recurring revenue, development contracts, sensors, cameras, systems, and semiconductors. Experience includes organizations from Series A to mature companies. Active board advisor to start-up companies SPECIALITIES: loT I Enterprise Software I Cameras I Sensors I Systems Artificial Intelligence I Deep learning I Human Machine Interface I Computer Vision I Analytics Sales Leadership I Global I Channel Sales I Business Development Embedded I OEM I Enterprise I Recurring Revenue Leadership I Advisor I Mentor MARKETS: Enterprise I Consumer I Machine Vision I Robotics I Networking I Defense I Power Management I Factory Automation PRODUCTS: Applications Software • Computer Vision * Facial recognition * Emotional and behavioral analytics Page 1 of 5 To: Sean Carter Page 13 of 39 2019-01-1113:33:10 (GMT) * Caching Photonics I Imaging * Cameras • Sensors Semiconductors • Analog • Processors • Memory Embedded Systems • Servers • IP Licensing EXPERIENCE HIGHLIGHTS: Condusiv Technologies 14155209456 From: Ali A. Aalaei • Built a recurring revenue stream from licensing of software • Captured 8 out of the top 10 computer manufacturers JAi • Turned revenue around, grew sales 30% Summit Microelectronics • Grew sales 225% • Captured Tier I logos - Cisco, Intel Radisys • Grew sales from $175M to $250M/year Sun Microsystems • Promoted multiple times in 7 years in senior leadership positions 20 years revenue team leadership PROFESSIONAL PASSION: • Building a revenue engine for technology companies * Go to Market Strategies Contact= steve@borochofLorg or 408-887-9000 Experience Behavioral Signal Technologies Advisor 2017 - Present Page 2 of 5 To: Sean Carter Page 14 of 39 2019-01-11 13:33:10 (GMT) 14155209456 From: Ali A. Aalaei Emotion and behavioral analytics leveraging artificial intelligence for the call center market Diyotta Advisor 2017 - Present Developer of automation software for moving and integrating big data Condusiv Technologies VP Global Sales I OEM I Enterprise Software 2010 - 2015 (6 years) Formerly Diskeeper Corporation, an established, leading software developer of caching software for application performance optimization for Windows based computers. Built, mentored, and lead a sales organization responsible for filling a pipeline which resulted in significant recurring revenue licenses with SanDisk, Westem Digital, HP, Lenovo, Samsung, Acer, ASUS, and Sony. Built business from $0 to $16M then successfully orchestrated an acquisition of the product line Page 3 of S To: Sean Carter Page 15 of 39 2019-01-11 13:33:10 (GMT) JAi Inc VP Sales, Marketing, Business Development 2005 - 2008 (4 years) 14155209456 From: Ali A. Aalaei Led sales, marketing, and business development in the Americas and parts of Asia for JAi, a privately held European based manufacturer of industrial high speed video cameras and video processing systems spanning both OEM and end-user sales models for the factory automation, inspection, medical imaging, defense, and intelligent traffic system vertical markets. Summit Microelectronics VP Worldwide Sales 2001 - 2004 (4 years) Directed all sales activity worldwide for this emerging programable analog fabless semiconductor company focused on power management applications for the optics (laser), communications, wireless, data networking, consumer and server vertical markets. Radisys VP Sales, North America 1999 - 2001 (3 years) Led all Americas sales activity for a $350M OEM manufacturer of embedded computers focused on the telecommunications and data networking markets. Products sold include communications building blocks such as CPU boards, DSP hardware, and algorithms, 1/0 connectivity adapters and full system integration services. Sun Microsystems Director of Sales 1993 - 1999 (7 years} Built and directed sales organization for Sun Microelectronics. Products consisted of SPARC 64 bit RISC microprocessors, JAVA processors, ASIC chipsets, graphics accelerators, single board computers, software, engineering services, and intellectual property licensing. Page 4 of 5 To: Sean Carter Page 16 of 39 2019-01-1113:33:10 (GMT) Cypress Semiconductor Director of Sales 1983 - 1992 (10 years) 14155209456 From: Ali A. Aalaei Selected, hired and directed the Western Area sales organization for this earty stage start-up company focused on SRAMS, PROMS, CPLD/FPGA. and microprocessors. Earfy contributor that helped lead the company thru IPO Education Georgia Institute of Technology Bachelor's degree, Electrical Engineering Page S of S To: Sean Carter Page 17 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei EXHIBIT C To: Sean Carter Page 17 of 39 201 9-01 ~11 3: 3:10 (GMT) 14155209456 From: AH A. Aalaei XHIBI To: Sean Carter Page 18 of 39 2019-01 -11 13:33:10 (GMT) I l i l j I I. .• Ari Law, P.C •• Attn: Ali Ari Aalaei, Esq. Attorney for Eycris Technologies, Inc., a Foreign Corporc1tion 90 New Montgomery St, Suite 900 San Francisco, CA 94105 STATE CASE NUMBER: WC-CM-459162 14155209456 From: Ali A. Aalaei To: Sean Carter Page 19 of 39 2019-01-11 13: 33: 10 (GMT) State of Oilifomia Department of Industrial Relations DIVISION OF LABOR STANDARDS ENFORCEMENT CERTIFICATION OF SERVICE BY MAJL (C.C.P.1013A) OR CERTIFIED MAIL 14155209456 From: Ali A. Aalaei I, Rosette Ekmekjian. do hereby certify that I am a resident of or employed in the County of Los Angeles, over 18 years of age. not a party to th.e within action, and that I am employed at and my business address is: LABOR COMMISSIONER, STATE OF CALJFORNIA 6150 Van Nuys Blvd Room 206 Van Nuys, CA 91401 Tel: (818) 901-5315 Fax: (818) 901-5307 I am readily familiar with the business practice of my place of business for collection and processing of correspondence for mailing with the United States Postal Service, Correspondence oo collected and proccsse.d is deposited with the United States Postal Service that same day in the ordinary course of business. On November 19, 2018, at my place of business, a copy of the following documcnt(s): Notice of Hearing, Complaint and Answer was(were) placed for deposit in the United States Postal Service in a sealed envelope, by First Class and Certified with postage fully prepaid, addressed to: NOTICE TO: Steven BorochofT, - Servke Address .- The Carter Law Group, Atln: Sean T. Carter, Attorner 2340 Powell Street Suite 355 fur Steven Borochoff, Emeryville, .CA94608 .. _, Service Address Additional Service AdRDS: Penalty - Failure.by an $750.00 $750.00 employer to permit a current or fonner employee to inspccl or copy jtemizcd payroJI l'ccords as set furtb ii) Labor Code Section 226, no later than 21 calendar days from the date of the request to inspect or copy such records, entitles the employee to recover a penalty of $750 from lh..: employer. (See Labor Code Section 226(.t)) ~ Plaintiff requested to inspect or copy itemized payroll records ' ptrrraining to plaintiff's employment Defendant fitiled to pennit insoection or CQoving within 21 calendar days of the request. · ACCESS TO PERSONNEL RECORDS: Penally- Failure by $750.00 $750.00 • an employer to permit a current or former employee, 0t Ms or her representative, to inspect or copy pets0nnel records as set forth in Labor C.Ode Section 1198.5 entitles the current or . former employee to recover a penally of$750 from the . employer. (See tabor Code Section 1198.S(k)) WCA 55 (Rev. 08/15) Cotnplainl i 1. ' To: Sean Carter Page 23 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei _, Amount Less CLAIM Earned or Amount BnJanoeDue Accrued Paid Defendaut failed to pennit inspection or copying of plaintiff's personnel records as required under Labor Code Seel.ion 1198.Slk). WAITING TIME PENALTIES- If an employer willfully fails $21,460.80 $21,460.80 to pay, in accordance with Lllbor Code Section 201, any wages of an employee who is discharged, the wages of the employee continue as a penally from their due date al the same rate until paid, up to a lllllximu1n of 30 days. (Sec Labor Code Section 203) Plaintiff was discharged on 09/30/16, un which dale wages were • due. Plaintiff claims waiting time penalties for 30 days' worth : of wages, based on a rate of pay of $715.36 per day. Daily rate · of pay is calculated as follows: 8 regular hours al $89.42 per hour {hourly equi-valent of .$15,500.00 monthly salary) = $715.36 TOTAL CLAIMED $126,120.80 Interest pursua:nt to Labor Code Sectioo(s) 98,l(c), 1194.2 and/or 2802(b). A document detailing the amount(s) due may he attached. Amount(s) due as set forth herein may be approximate and subject to modification based on evitlerice presented at hearing. PLAINTIFF CERTIFIBS THAT THE FOREGOING IS TRUE AND CORRECT TO THE BEST OF ms/HER KNOWLEDGE AND BEUEF. Executed at: Van Nuys, Coumy of Los Angeles, California Dated: -S-~J7rj.. :.>1 P.. Dale of Signnture WCA S5 (Rev. 08/15) Comphiint Pagelof2 WC-CM-459162 To: Sean Carter Page 24 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei ,·...------.....--------------....... ----..--------..,.,.,.,,-...,,.,,.,,...,. STATE OF CALIFORNIA Department of Industrial Relations Labor Commissioner Office 6150 Van Nuys Blvd, Room 206 Van Nuys, CA 91401 Email: laborcomm.wca. vno@dir.ca.gov ·. Fax: (818) 901-5307 PLAINTIFF: Steven Borochoff DEFENDANT: Eyeris Technologies, Inc., a Foreign Corpor.ttion 800 W. El Camino Real Suite 180 Mountain View, CA 94040 State Ca.~ Number WC-CM-459162 Tuesday, December 18, 2018 Defendant answers the complaint on tile as follows: AGREES: DENIES ANSWER (Set forth any particulars in which the complaint is inaccurate or incomplete and the facts upon which you intend to reply. Use additional sheets if necessary.) Defendant certifies that the foregoing. including attachments, is true and correct to the best of his/her knowledge and belief. Executed at _ ___________ . California, on_.------·, 20 ___ :_· ,., (Signature of person answering. with title, if 11Dswer is made on behalf ofa11other person or entity) (Type or print your name and name of person or entity, it' any, on whose behalf this form is signed) WCA 63 - Answer (Rev. 0l/11) To: Sean Carter Page 25 of 39 2019-01-1 1 13:33:10 (GMT) 14155209456 From: Ali A. Aalaei EXHIBIT D o: art r f - - G T) : li . aI ei I To: Sean Carter Page 26 of 39 2019-01 -1113:33:10 (GMn 14155209456 From: Ali A. Aalaei •;. 2 ? ARI LAW, P.C. 90 New Montgomery ST, STE 900 San Francisco, CA 94105 Phone: 415-830-9968 I Fax: 415-520-9456 I www.arilaw.com December 10, 2018 Sean T. Carter The Carter Law Group 2340 Powell St., Ste 335 Emeryville, CA 94608-1738 Sent Via Email to sean@seancarter.11s Re: DSLE CaseN111nber WC-CM-459162; Request for Dismissal~ Dear Counsel: We request that you dismiss the above-referenced claim you filed with the DSLE within forty-eight hours (48). There is a binding arbi tration agreement in the Consultancy Agreement the parties signed on 4/2/2016, which is broadly worded and covers "any controversy or claim'• between the parties, encompassing your clients' wage and hour claims, 9. Arbitration. Any controversy or chum arising out of or relating to this contract, or the breach _thereof, shal~ be sei:led _by arbitration administered by the American Arbitration Association un~er ,_ts Commemal Arb1trat10n Rules. The number of arbitrators shall be three. The place of ~b1tratto~ shall be Santa Clara, California. California law shall apply. Judgment on the award rendered by the arb1trator(s) may be entered in any court having jurisdiction thereof. Steven Borochoff and Borochoff Management Consultants ("BMC') ·~aived [their) right to pursue the Berman procedures" with DSLE via the arbitration agreement. OTO, L.L.C. v. Kho, (2017) 14 Cal. App. 5th 691, 715. Sir, you brought your clients' claims in the wrong venue. With this letter, you are on notice of such. If you continue to prosecute claims in a venue you know to be improper, we will seek sanctions and all appropriate relief against you and your clients. Sincerely, 8 ~ B:;ftartin Esq. - ARI LAW, P.C, Attorneys for Eyeris Technologies, Inc. To: Sean Carter Page 27 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei 2 3 4 5 6 7 8 9 10 l 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I am over the age of eighteen years and not a party to the within cause; my business address is 90 New Montgomery Street, Ste. 900 San Francisco, CA 94105. l hereby certify that on the date set forth below, I served a true and correct copy of the following: DECLARATION OF PLAINTIFF'S COUNSEL BENJAMIN MARTIN IN SUPPORT OF PLAINTIFF EYERIS TECIL~OLOGIES, INC.'S MOTION TO COMPEL ARBITRATION On counsel and the parties in said cause via the method indicated below. Sean T. Carter The Cart.er Law Group 2340 Powell St., Ste. 335 Emeryville, CA 94608-1738 _K by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, for deposit in the U.S Postal Service at San Francisco, California in the ordinary course of business. I am readily familiar with the firm's practice for colJection and processing correspondence for mai1ing. X by email to: sean@seancarter.us Counsel for Defendant Borochoff Management Consultants I declare under penalty of perjury that the foregoing is true and correct, and that this declaration was executed on January 11, 2019 at San Francisco, California. Benjamin Martin 3 DECLARATION OF PLAINTIFF'S COUNSEL BENJAMIN Ivf.ARTIN IN SUPPORT OF PLAINTIFF EYERTS TEC HNOLOGIES, INC. 'S MOTION TO COMPEL ARBITRATION To: Sean Carter Page 28 of 39 2019-01-1113:33:10 (GMD 14155209456 From: Ali A. Aalaei ARI LAW, P .C. Ali A. Aalaci, State Bar No. 254713 2 Benjamin Martin. St.ate Bar No. 257452 90 New Montgomery Street, Ste 900 3 San Francisco, CA 94105 Phone: 415-830-9968 4 Fax: 415-520-9456 5 Attorneys for Plainti.ffEyeris Technologies, lnc. 6 7 g 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA COlJNTY OF SANTA CLARA l TNLIMITED JURISDICTION 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2,6 27 28 EYERIS TECHNOLOGIES, INC., a business entity, Plaintiff, vs. ) ) ) ) ) ) STEVEN BOROCHOFF, in individual, ~ BOROCHOFF MANA~EMEN~ ) CONSULTANTS, a busmess entity, and DOES 1-) 10 inclusive. ) Defendants. ) ) ) 1 Case No. 18CV340059 HRG 3/19/ 19 PLAll~TIFF EYERIS TECH.1.~OLOGillS, INC. 'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO COlVlPEL ARBITRATION Date: March 19, 2019, Time: 9:00 a.m. Judge: Hon Peter H. Kirwan Dept.: 18 PLAINTIFF EYERIS TECHNOLOGIES, INC.'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF To: Sean Carter Page 29 of 39 2019-01-11 13:33:10 (GMT) 14155209456 From: A!i A. Aalaei I. INTRODUCTION 2 This is a motion to compel compliance with an arbitration agreement containing "any 3 controversy" Janguage. Instead of bringing their claims in arbitration. Defendants brought their claims 4 with California's Labor Commission. The parties are represented by counsel; after meet and confer 5 efforts, counsel for Defendants refused to dismiss Defendants' DSLE complaint. This motion follows . 6 II. FACTUAL BACKGROUND 7 Plaintiff Eyeris and Defendant BorochoffManagement Consultants ('·BMC") entered into a 8 Consulting Agreement on April 2, 2016. Martin Deel. , ~2. Ex. A. ,,i1,2. Steven Borochoff entered into 9 the Cornmltancy Agreement on behalf of BMC, and Modar Alaoui entered into the Consultancy 10 Agreement on behalf ofEycris. Id. , at p . 4. Steven Borochoff is the principal of BMC. Mr. Borochoff 11 claims on his Linkedin profile that is employed by BMC as "VP Sales Consultant." Martin Deel. , ,!3, Ex. 12 B. Modar Alaoui is employed by Eyeris as CEO. Martin Deel., ,!2, Ex. A, p. 4. Plaintiff Eyeris is a 13 technology, artificial intelligence, and automotive corporation operating out of Palo Alto, and organized 14 in the State of Delaware. Defendants provide consultancy services to technology companies. Mr. Alaoui 15 signed the Consultancy Agreement from Palo Alto, CA; Mr. Borochoff signed the Consultancy 16 Agreement from West Lake Village, CA. Martin Deel., ,i2, fa:. A, p. 4. 17 The Consultancy Agreement contains the parties understanding that their relationship wouJd 1 & strictly be that of an independent contractor. lvfartin Deel.. ,i2, Ex. A, 14. 19 Defendant5 filed a "'wage und hour'' complaint with the DLSE, claiming unpaid wages on 20 February 8, 2018. Martin Deel.. 14, Ex. C, p. 5. Defendants' OSLE complaint discloses Defendants ' 21 position as "VP Sales" and that the work period in question is April 4, 2016 through September 30, 2016. 22 Id. A hearing on Defendants DLSE complaint is scheduled for December 18, 2018. Jd. at p. 3. On 23 December 10, 2018, counsel for Plaintiff, Benjamin Martin, transmitted a letter requesting that 24 Defendants dismiss their OSLE complaint, and bring their claims in arbitration under the parties' promise 25 to arbitrate their disputes. Martin Deel., ,i5, Ex .. D. The letter stated, '"Steven Borochoff and BorochoiT 26 Management Consultants ("BMC'') "waived [their] right to pursue the Berman procedures" with DSLE 27 via the arbitration agreement. OTO, L.L.C. v. Kho, (2017) 14 Cal. App. 5th 691, 715." Id. On December 28 2 PLAINTIFF EYERIS TECHNOLOGIES, INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF To: Sean Carter Page 30 of 39 2019-01-11 13:33:10 (GMD 14155209456 From: Ali A. Aalaei 11 , 2018, Mr. Martin and counsel for Defendants, Sean Carter, discussed the matter on the telephone. 2 Mr. Carter disagreed with the scope of the arbitration agreement and refused to dismiss the DSLE 3 hearing. 11,!artin Deel.. 16. 4 Ill. LEGAL ARGUMENT. s A. The Parties' Arbitration Agreement. Under the California Arbitration Act. 6 The California Arbitration Act ("CAA'') reflects a strong policy in favor of arbitration. Ericksen, 7 Arbuthnot, McCarthy, Kearney & Walsh, inc. v. 100 Oak Street, (l 983) 35 Ca 1. 3d 312, 322 (Ericksen). 8 Under the CAA, a court must enforce an arbitration agreement unless the party moving to compel 9 arbitration waived its rights to do so or the agreement to arbitrate is revocable. Cal. Civ. Proc. Code§ 10 1281.2; Ericksen, 35 Cal. 3d at 322 (explaining that "'the term 'agreement"' in the context of section 11 1281.2 '"may properly be construed to refer to the agreement to arbitrate, as distinguished from the overal 12 contract m which that agreement is contained''). Cal. Civ. Proc. Code§ 1281.2 provides in pertinent part 13 "On petition of a party to an arbitration agreement alleging the existence of a written agreement to 14 arbitrate a controversy, and that a party thereto refuses to arbitrate the controversy, the court shall order 15 the parties to so arbitrate if it determines that such an agreement exists." "The court should order them to 16 arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute." Hartnell 11 Cmty. Coll. Dist. v. Super. Ct., (2004) 124 Cal. App. 4th 1443, 1449. There is a presumption in favor of 18 arbitrability and the party resisting arbitration bears the burden of establishing that the arbitration 19 agreement is inapplicable. S«int Agnes Med. Cir. "· Pac{f'iCare of Cal., (2003) 31 Cal. 4th 1187, 1195. 20 Any doubts as to the scope of an agreement to arbitrate are to be resolved in favor of the arbitration. 21 Hayes Children Leasing Co. v. NCR Corp. (1995) 37 Cal.App.4th 775, 788; Coast Plaza Doctors Hosp. 22 v. Blue Ctoss of Cal., (2000) 83 Cal. App. 4th 677, 686 ("the court should indulge every intendment to 23 give effect to an arbitration agreement" (internal citations omitted). 24 On a motion to compel arbitration, "the court itself must decide whether the agreement exists, and 25 if any defense to its enforcement is raised. whether the agreement is enforceable. Because existence of th 26 agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its 27 existence by a preponderance of the evidence." Cal. Civ. Proc. Code§ 1281.2. ln determining the 28 3 PLAINTIFF EYERIS TECHNOLOGIES, INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF To: Sean Carter Page 31 of 39 2019-01-1113:33:10 (GMD 14155209456 From: Ali A. Aalaei agreement's enforceability, courts place arbitration agreements on an equal footing with other contracts, 2 and enforce them according to their terms. Weeks v. Crow, (1980) 113 Cal. App. 3d 350, 353 ("The court 3 should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the 4 contractual language and the circumstances under which the agreement was made."). When deciding 5 whether the parties agreed to arbitrate, including the question of arbitrability, courts evaluate the legal 6 fonnation of the contract containing the agreement to arbitrate. "The essential elements ofa contract are: 7 parties capable of contracting; the parties' consent; a lawful object; and sufficient cause or 8 consideration." Lopez v. (,11arles Schwab & Co., Inc., (2004) 118 Cal. App. 4th 1224, 1230 (citations 9 omitted). Here, the parties to the Consultancy Agreement, Eyeris and BMC, are business entities whose 1 o principals are sophisticated businesspersons in the fields of artificial intelligence and related technologies 11 and are wholly capable of entering into binding agreements; consultancy and sales -- the subject of the 12 consultancy agreement - are lawful objects; and the scope of work and monetary compensation therefore 13 constitute sufficient consideration. Martin Deel., ,r2, Ex. A, ,i,iJ,2. The parties signed the Consultancy 14 Agreement under the language, 15 16 17 18 19 EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT~ SUCH PARTY HAS HAD TifE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF TI-IE TERi\1S AND PROVISIONS OF THIS AORERrvtENT. nus AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF. 20 Martin Deel., ,i2, Ex. A, p. 3. Accordingly, the Consultancy Agreement and the arbitration clause therein 21 are valid and enforceable. 22 B. The Arbitration Clause Must Be Enforced According to Its Terms. 23 Defendants' wage claims are intimately founded in and intertwined with their Consultancy 24 Agreement with Plaintiff, which exclusively governs the parties ' relationship. Martin Deel. , 12, Ex. A, 25 '1[10 ("This Agreement, the exhibits bereto and the Confidentiality Agreement constitutes the sole 26 agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject 27 matter hereof.") 28 4 PLAINTIFF EYERIS TECHNOLOGIES, INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SlJPPORT OF To: Sean Carter Page 32 of 39 2019-01-11 13:33: 10 (GMT) 14155209456 From: Ali A. Aalaei The scope of the parties ' agreement to arbitrate is extremely broad and encompasses "any 2 controversy or claim arising out of or relating to this contact.'' Martin Deel., 12, Ex. A, 19. Defendants, 3 claims fal] squarely within the parties' arbitration agreement because they pertain to alleged 4 compensation owed ro Defendants under the Consultancy Agreement, i.e., jn Defendants' capacity as 5 "VP Sales" and for the period of April 4, 2016 through September 30, 2016-a term beginning two (2) 6 days after the Consultancy Agreement's execution. Defendants' DSLE c1aims seek to obtain the benefits 7 of the Consultancy Agreement allegedly withheld from Defendants. Even though Defendants' claims are 8 styled as Labor Code violations, Defendants must pursue their claims in the venue in which the parties 9 agreed to resolve all their disputes: the American ArbitTation Association. J.v!itsubishi Mowrs Corp. v. IO Soler Clnysler-P{vmouth (1985) 473 U.S. 614; Khalatian v. Prime Time Shuttle, Inc. (2015) 237 11 Cal.App.4th 651, 660 (rejecting the contention that his wage and hour claims were exempt from 12 arbitration because they were statutory). 13 C. OTO, L.L.C. v. Kho, (2017) 14 Cal. App. 5th 691 . 14 The parties' relationship is that of an independent contractor, not employee-employer. 15 Nevertheless, as.rnming arguendo, the parties have an employee-employer relationship, OTO, L.L.C. v. 16 Kho, (2017) 14 Cal. App. 5th 691 (Otto) , governs. In Oto, the plaintiff-employee filed a wage claim with 17 the DLSE. The employer attended a settlement conference before the DLSE and attempted to settle the 18 claim, but no settlement was reached. As such, the claim was set for a hearing ( to decide the merits of th 19 claim) before the DLSE. Just before the hearing (the same day), the employer filed a petition to compel 20 arbitration of the claim with the Superior Court. An employer representative showed up at the hearing 21 and asked that the DLSE be cancelled based on the pending petition to compel arbitration. The DLSE 22 hearing officer refused to cancel the hearing and proceeded without the employer being present. The 23 DLSE ruled in favor of the employee and awarded six figures. Meanwhile, the Superior Court denied the 24 employer's petition to compel arbitT'ation, finding the applicable arbitration agreement unconscionable 25 and unenforc.eable. The employer appealed. Oto, at 699-901. The appellate court reversed the trial 26 court's order denying the petition to compel arbitration, finding that the arbitration agreement was 27 enforceable and that the Superior Court erred in refusing to grant the employer' s petition to compel 28 5 PLAINTIFF EYERIS TECHNOLOGIES, INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF To: Sean Carter Page 33 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei arbitration. The appeJJate court speciticalJy found that a plaintiff-employee waives his or her statutory 2 rights to file a DSLE claim and have it determined by the Labor Commission (the so-called '"Berman 3 procedure" under Labor Code §98, et. seq., named after the authoring legislator) when the plaintiff.- 4 employee enters into valid and enforceable arbitration agreement. OTO, L.L.C. v. Kho, (2017) 14 Cal. s App. 5th 691, 715. 6 Thus, even if there is an employee-employer relationship between the parties such that the Labor 7 Commission has jurisdiction to hear Defendants ' wage and hour claims (which it does not), Defendanis 8 expressly waived their rights to file a OSLE claim and have it determined by the Labor Commission via 9 the Consultancy Agreement' s arbitration clause. Lagatree v. Luce .. Forward, Hamilton & Scripps, (1999) JO 74 Cal. App. 4th 1105_, 1127 ("An employee who signs such an agreement is obligated to submit 11 employment-related disputes to arbitration; if be refuses to do so, the courts stand ready to compel 12 arbitration."). 13 IV. CONCLUSION 14 For the reasons stated above, Plaintiffs motion to compel arbitration should be granted, and the 15 parties should be ordered to arbitration their disputes within thirty (30) days of entry of this Court's order 16 This Court should retain jurisdiction of the matter pending the outcome of arbitration. 17 18 19 20 21 22 23 24 25 26 27 28 Dated: January 10, 2019 Respectfully submitted, ARI LAW PC By: --- - ---------- Ari Law, PC Ali A. Aalaei Benjamin Martin Attorney for PlaintiffEyeris Technologies, Inc. 6 PLAIN'TIFF EYERIS TECHNOLOGIES, INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF To: Sean Carter Page 34 of 39 2019-01-1113:33:10 (GMl) 14155209456 From: Ali A. Aalaei 2 3 4 5 6 7 8 9 IO 11 12 13 CERTIFICATE OF SERVICE I am over the age of eighteen years and not a party to the within cause; my business address is 90 New Montgomery Street, Ste. 900 San Francisco, CA 94105. I hereby certify that on the date set forth below, I served a true and correct copy of the follo\\ing: PLAINTIFF EYERIS TECHNOLOGIES, INC. 'S MEMORA.~Ul\1 OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO COMPEL ARBITRATION On counsel and the parties in srud cause via the method indicated below. Sean T. Carter The Carter Law Group 2340 Powell St., Ste. 335 Emeryville, CA 94608-1738 ~ by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, for deposit in the U.S Postal Service at San Francisco, California in the ordinary course of business. I am readily familiar with the firm' s practice for collection and processing correspondence for mailing. 14 X by email to: sean~seancarter.us Counsel for Detendant BorochoffManagement Consultants 15 i6 17 18 19 20 21 22 23 24 25 26 27 28 I declare under penalty of perjury that the foregoing is true and correct. and that this declaration was executed on January 11, 2019 at San Francisco. California. Benjamin Martin 7 PLAINTIFF EYERIS TECHNOLOGIES, INC'S MEMORANDUM OF POIJ\.7'S AND AUTHORITIES IN SUPPORT OF To: Sean Carter Page 35 of 39 2019-01-1113:33:10 (GMT) ARI LAW, P.C. Ali A. Aalaei, State Bar No. 254713 2 Benjamin Martin. State Bar No. 257452 90 New Montgomery Street, Ste. 900 3 San Francisco, CA 94105 Phone:415-830-9968 4 Fax.: 415-520-9456 5 Attomeysjor Plaintif]'Eyeris Technologies, Inc 6 7 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA UNLIMITED JURISDICTION 10 11 12 EYERIS TECHNOLOGIES, INC., a business entity, Plaintiff, VS. Case No. l 8CV340059 HRG 3/19/19 14155209456 From: Ali A Aalaei 13 14 15 ) ) ) ) ) ) ) STEVEN BOROCHOFF., in individual, ) BOROCHOFF MANAGEMENT CONSlJLTANfS. a business entity. and DOES 1- ~ 10 inclusive. ) PLAINTIFF EYERIS TECHNOLOGIES, INC.'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants. ) ) Date: March 19, 2019, Time: 9:00 a.m. Judge: Hon Peter H. Kirwan Dept.: 18 PLAINTIFF EYERIS TECHNOLOGIES, INC. 'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION To: Sean Carter Page 36 of 39 2019-01-1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei TO ALL THE PARTIES TO THIS ACTION AND TO THEIR COUNSEL OF RECORD: 2 On March 19, 2019, at 9:00 a.m. or as soon thereafter as may be heard in department 18 of the 3 above entitled Court, PlaintiffEyeris TechnoJogies, Inc. (''Plaintiff" or "Eyeris") will move the Court for 4 an order compelling arbitration as to Defendants Steven Borochoff and Borochoff Management 5 Consultants ("Defendants") pursuant to section 1281.2 of the Califomia Code of Civil Procedure, et. 6 seq., and section 1717 of the California Civil Code. 7 This Motion is based upon this Notice, the Memorandum of Points and Authorities, and the 8 Declaration of Benjamin Martin and exhibit thereto, filed and served herewith, as well as matter properly 9 subject to judicial notice, and any such other evidence as may be presented at the hearing on this Motion. 10 11 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 Dated: January 10, 2019 Respectfully submitted, ARI LAW PC By: _____________ _ AriLaw, PC Ali A. Aalaei Benjamin Martin Attorney for Plaintiff Eyeris Technologies, Inc. 2 PLAINTIFF EYERIS TECHNOLOGIES, INC. 'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION To: Sean Carter Page 37 of 39 2019-01 -1113:33:10 (GMT) 14155209456 From: Ali A. Aalaei 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 MOTION TO COMPEL ARBITRATION Plaintiff respectfully brings this motion to compel arbitration, and hereby shows the folJowing: 1. On April 2, 2016, Plaintiff and Defendant BorocboffManagement Consultants CBMC'') entered into a consultancy agreement ("Consulting Agreement"), a true and correct copy of which is attached hereto as Exhibit A to the Declaration of Plaintiff's Counsel Benjamin Martin, Esq. in Support of Plaintiff Eyeris Technologies, Inc.' s Motion to Compel Arbitration ("Martin Deel."), 2. Paragraph 9 of the Consultancy Agreement contains the parties agreement to arbitration ·•any controversy or claim arising out of or relating to this contact" with the American Arbitration. Association in Santa Clara, California: 9. Arbitration, Any controversy or claim arising out of or relating to this contract or the breach thereof, shall be settled by arbitration administered by the American Arbitration Asso'ciation un~er ~ts Commercial Arbitration. Rul~. Th~ n~ber of arbitrators shall be three. The place of arbitratio~ shall be Santa Clara, California. C.aliforrua law shall apply. Judgment on the award rendered by the arb1trator(s) may be entered in any court having jurisdiction thereof. 3. Steven Borochoff is employed by BMC as "VP Sales Consultant." A true and correct copy of the Linkedin webpage of Steven Borochoff is attached hereto as Exhibit B to Martin Deel., ,r3. 4. Instead of bringing its claims in arbitration, Defendants filed a complaint with the Department of Industrial Relations Labor Commissioner ("DLSE"). A hearing on Defendants DLSE complaint i scheduled for December 18, 2018. A true and c-0rrect copy of the notice of hearing and the DLSE complaint are attached hereto as Exhibit C to Martin Deel., ,r4. 5. Through counsel, Plaintiff requested that Defendants dismiss their DSLE complaint, and bring their claims in arbitration under the parties' promise to arbitrate their disputes. A true and correct copy of Plaintiff' s request for dismissal is attached hereto as Exhibit D to Martin Deel .• ,is. 6. Through counsel, Defendants refused to dismiss their complaint with the DSLE. Martin Deel., ,i6. WHEREFORE, Plaintiff prays, 1. That the Court order Defendants to arbitrate their disputes; 2. That the Court enter an order dismissing the DSLE action; 3 PLAINTIFF EYERIS TECHNOLOGIES. INC. 'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION To: Sean Carter Page 38 of 39 2019-01-11 13:33:10 (GMD 14155209456 From: Ali A. Aalaei 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. That Plaintiff be awarded costs and attorney's fees herein incurred, and; 4. For such other and further relief as the Court may deem just and proper. Dated: January 10, 2019 Respectfully submitted, ARI LAW PC By: -------------- Ari Lav,', PC Ali A. Aalaei Benjamin Martin Attorney for Plaintiff Eyeris Technologies, Inc. 4 PLAINTIFF EYERIS TECHNOLOGIES, lNC:S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION To: Sean Carter Page 39 of 39 2019-01-1113:33:10 (GMn 14155209456 From: Ali A. Aalaei 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 CERTIFICATE OF SERVICE I am over the age of eighteen years and not a party to the within cause; my business address is 90 New Montgomery Street, Ste. 900 San Francisco, CA 94105. I hereby certify that on the date set forth below, I served a true and correct copy of the following: PLAINTIFFE"\''ERIS TECIL~OLOGIES, INC.'S NOTICE OF MOTION Ai"lffi MOTION TO COMPEL ARBITRATION On counsel and the parties in said cause via the method indicated below. Sean T. Carter The Carter Law Group 2340 Powell St., Ste. 335 Emeryville, CA 94608-1738 ___x_ by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, for deposit in the lJ.S Postal Service at San Francisco, California in the ordinary course of business. I am readily familiar with the firm' s practice for collection and processing correspondence for mailing. X by email to: sean(lltseancarter.us Counsel for Defendant BorocboffManagement Consultants I declare under penalty of perjury that the foregoing is true and correct, and that this declaration. was executed on January 1 1, 2019 at San Francisco, California. Benjamin Martin 5 PLAINTIFF EYERIS TECHNOLOGIES. INC. ' S NOTICE OF MOTIOl\ AND MOTION TO COMPEL ARBITRATION Exhibit G Carter Declaration xhibit art eclar t o e (844) 240-0916 Type Time Duration r!. Incoming call 10:31 AM Tuesday, Jan 29, 2019 5 min 3 sec (84 ) 240-091 6 Dtgraiém‘l ‘ r‘ in t [.3315 :ct" incoming call 10:31 AM Tuesday, Jan 29, 2019 5 min 3 sec Exhibit H Carter Declaration xhibit art eclar t o California Secretary of State Business Search Portal-Screenshot as of October 6, 2016. EYERIS TECHNOLOGIES, INC. C3679100 . 05/ 29/2014 800 W EL CAMINO REAL STE 180 MOUNTAIN VIEW CA 94040 CORPORATION SERVICE COMPANY WHICH SERVICE 2710 GATEWAY OAKS DR STE 150N SACRAMENTO CA 95833 California Secretary of State Business Search Portal- Screenshot as of January 26, 2017 ·. Business Search - Entity Detail The California Bus111ess Search is updated drn~; and reflects work processed through Wednesday, January 25. 2017. Please refer to document ~OiL11lll~~..for U1e received dates of filings currently being processed. The data provided is no! a complete or certified record al an entil.y. Not all images are available online. C3679100 EYERIS TECHNOLOGIES, INC. Registration Date: Jurisdiction: Entity Type: Status: Agent for Service of Process: Entity Address: Entity Mailing Address: 05i29C2014 DELAWARE FOREIGN STOCK FTB FORFEITED CORPORATION SERV ICE COI\IPANY WHICH WILL DO BUSINESS IN CALIFORNIA AS CSC - LAWYERS iNCORPORATING SERVICE 2710 GATEWAY OAKS DR STE 150N SACRAMENTO CA 95833 800 VI/ EL CAf·,IINO REAL STE 180 MOUNTA IN VIEW CA 94040 800 W EL CAflllNO REAL STE 180 t-JOUNTA IN VIEW CA 94040 1/24/2018 Business Seardl- Business Enliies- Business Programs J Califomia Seaelary of Stale 0~ Business Search - Entity DetaU The Galifomia Business Sean:h is updated daily and refleds worlt processed through Tuesday, Janua,y 2.3, 2018. Please refer to document Pf91'l9ffllkm 1Jmn for the received dates of flings currently being processed.. The data provided Is not a comptete or cerlllied record of an entity. Not all Images are available online. C3679100 EYERIS TECHNOLOGIES, INC. Reglstndlon Date: Jurisdiction: Entity lype; Status: Agentfor$erva of Pnlcass: 0512912014 OElAWARE FOREIGN STOCK FTB FORFEITED CQRPORATION SERVICE COMPANY WHICH WILL QO BUSINE$$ IN CAUf9RNIAM CSC ~ 1.AWYERS INCORPORAJM SEIMCI; U::,S92199J To find the most cooent California regislered Corporate Agent for Sen,ice of Process address and aulhor2ed employee{s) informatlOn, click the link above and then select the most ament 1505 Certificate. 800 W EL CAMINO REAL STE 180 MOUNTAIN VIEW CA 94040 800 W EL CAMINO REAL STE 180 MOUNTAIN VIEW CA 94040 . ' . .. ' . . ' ... . . • ' - ., ... , ••. ,-4 ~- !. ___ ,,_, ·- · •. .,.., • ... . . ... ··•- ... _.- . .. 1:::.:::---· ··-- . - --·-- It: : .. ·-·-·---·-----•:-________ , * Indicates 1he Information is not contained in 1he California SecnJtary of State's database.. • If the status of the co,poration is "Sumloder: the agent for service of pmcess is automatically revoked.. Please refer to Caifomla Corporations Code saction 2114 for Information ~ to setvice upon corporations that have surrendered. • For information on chectcing or reserving a name, tefer10 Name Availability. • If the image Is not available online, for infonnation on Ofdering a copy refer b lnfq111pfke BrPPeS1B • For information on omering certificates, status reports, certified copies of documenls and copies of docUment:s not currently available In the Business Search or to request a f1'I01ll extensive se.trdJ for reooms, refer to Information Reguests. • F-or ~ with se8rffllng 1111 enllty name, refer to SNn;h Tips. • For desaiptions of the various fields and s1atUs types. refer to FrequenUy Asked Qupstiona r Modify Sean:h _ i r~ Search ! L~~~-;.;;~~~\ ------ -------- ----- - - --- --- -------- -- -·· -···---· -·. California Secretary of State Business Search Portal - Screenshot as of January 11, 2019 C,.,~;" Business Search - Entity Detail The California Business Search is updated daily and reflects work processed through Thursday, January 10. 2019. Please refer to document Processing.limes for the received dates of filings currently being processed. The data provided is not a complete or certified record of an entity. Not all images are available online. C3679100 EYERIS TECHNOLOGIES, INC. Registration Date: Jurisdiction: Entity Type: Status: Agent for Service of Process: Entity Address: Entity Mailing Address: 05/29/2014 DELAWARE FOREIGN STOCK ACTIVE ~!!QBAilOJI . .S~O.MEBtlDY~,C.QJ;!J.l..$.1.1'!.~.~!EQllli!~ C~J.&ftEBJUNC~liru:Ili.G~B.YJ~(GlftZ!ill To find the most current California registered Corporate Agent for Service of Process address and authorized employee(s) information, click the link above and then select the most current 1505 Certificate. 530 LYTTON AVE., 2ND FLOOR PALO ALTO CA 94301 530 LYTTON AVE .. 2ND FLOOR PALO ALTO CA 94301 A Statement of Information is due EVERY year beginning five months before and through the end of May. Exhibit I Carter Declaration xhibit | art eclar t o ~ AMF.RICAN ARBITMTrON ASSOCIATION" ~·; ( j) [\/iI !r~Al fi'·: i~? r: ~i ~I ..·. J~. :~~ 131 ~ •·~. ~:i i\Jl .. ~ l[) tf \~ ~){ ~j ~. ~i['~ :·) iiVii ( :[!:_)} Jl\'f tlt:J j/-~::l ! ';;j;)~~];[:i~i!.~tl. J ~({ t.·:~3 \dministrative Fee Schedules , m ended and Effective May 1, 2018 :or all cases determined to be international by the AM- ICDR, the International Fee Schedule shall apply. An internatio,al case is generally defined as having either the place of 1rb it ration or performance of the agreement outside the United States. or having an arbitra tion agreement between part ies from diffe rent countr ies . To view the International Fee ;chedule. visit info.adr.org/internationatfeeschedule. -he AAA offe rs parties two options for the payment of administ rative fees. :or both schedules, admini strative fees are based on the amount of the claim or counterclaim and are to be pa id by the par ty bringing the claim or counterclaim at the time the lemand or claim is f iled with the AAA. Arbitrator compensation is not included in either schedule. Unless the part ies· agreement provides otherwise. arbitrator compensation and 1dministrat ive fees are subject to allocation by an arbitrator in an award. ;,y, ,;•,:h;·,,1 i:c:r; S,:/J(i, b i'): A two-payment schedule that provides for somewhat higher ini tial filing fees but lower overall administrative fees for cases that proceed to a hearing. :l,~:.;,j,J ,,:, 1=,:ij ::id H;,(1,1(.:): A three-payment schedule that provides for lower init ial filing fee and then spreads subsequent payments out over the course of the arb itra tion. Total 1dministrative fees will be somew hat higher for cases that proceed to a hear ing. s-v~r,iF.ti::n.~ ·• ·;o ~:; ~ .. ; ~~f :r;~i :.1l(~ _ess than $75,000 $800 P5.000 to less than $150,000 $1 ,925 $1,375 $925 -r-- f,1 50,000 to less than $300,000 $2,900 $2,20( !,300,000 to less than $500,000 $4.400 ! $3,850 -----------+---------~-- ~-~-~----- --- -- tsoo.ooo to less than $1,000,000 $5.500 $6,825 no□0 ,000 to less than !,10,000,000 f,10.000,000 and above $7,700 $11,000 plus .01% of the claim amount above ! 10,000.000 up to $65,000 $8,475 $13,750 1,1,700 l $8,475 J ndetermined Monetary Claims \Jonmonetary Claims• ··---- $3.500 I $2,750 - - ------ ) eficient Filing Fee ~dditional Party Fees $500 If there are more than two separately represented parties in the arbitration, an additional 10% of each fee contained in these fee schedu les will be charged for each additional separately represented party. However, Additional Party Fees will not exceed 50% of the base fees contained in these fee schedules unless there are more than 10 separately rep resented parties. See below for additional details. Fl.~_~,n.H_d.ci r;:·(}~} ~:_;r.;l(~(hli.t) Less than $75,000 Only available for claims $150,000 and above $75.000 to less than $150,000 - ··-·------,---------t $150.000 to less than $300,000 I $1 .825 i $1.875 $2,200 $300,000 to less than $500,000 $2.20D $3,300 $3,850 $500,000 to less than $1,000,000 $2.750 $4.725 $6,825 -·-·-- ··- ··----- . . ·-·······------ -- - - ····- ·--·- •-·-·~ ---- Llii i $1 000,000 to less than $3 850 $6 275 $8 475 000,0D0 -------1 ' ' ' - ·- - ~ -- Mn ' ,, _ , ., $13,750 I I [ I $10,000 plus .01% of the $10,000,000 and above I $5,500 claim amount above $10,000,000 up to $65,000 ---.. ---·-------· I $3.850 I $6.275 I $8._47~---1 $2,200 $2,475 $2,750 Undetermined Monetary Claims Nonmonetary Claims• - - --- - - - --·-- - ·-.. ·- - ·l·- -- - - - -----~-·--+-- - - ---- --- Deficient Filing Fee $ 500 •- -··- - ------------ - -1-- - ------- --- - ---- -----~---··-·--- - -I Additional Party Fees If there are more than two sepa ra te l.y represented parties in the arbitrat,on. an add itional 10% ot each fee contained in these fee schedules will be cha rged for each add itional separately represented pa rty. However, Additional Party Fees will not exceed 50% of the base fees contained in these fee schedules unless there are more than 10 separately represented parties . See below for addi tional details . ? t~r. ::·r.r\1 /-:~ (IIJJ, AMERICAN ARmTRATION ASSOCIATION" ~WN i'Nj,;H'f] r,:,.;;: St::l ,,{ki /.cl ( C ont.l • The Initial Filing Fee is payable in ful l by a fil ing party when a claim, counterclaim, or additional cla im is fi led. • The Final Fee will be incurred for all cases that proceed to their first hearing and is payable in advance at the time the first hearing is scheduled. • Fee Modifications: Fees are subject to increase if the claim or counterclaim is increased after the ini tial filing date. Fees are subject to decrease if the cla im or counterclaim decreases prior to the fi rst hearing. • Cases with Three or More Arbitrators are subject to a minimum Initial Fi ling Fee of $4,400 and a Final Fee of $3,850. • Nonmonetary Claims: The non-monetary filing fee is the minimum filing fee for any case requesting non-moneta ry relief. Where a party seeks both monetary damages and non-monetary relief, the higher of the two fil ing fees wi ll apply. Refunds-Standard Fee Schedule, Initial Filing Fees: Subject to a $500 min imum non-refundable Ini t ial Filing Fee for all cases, refunds of Initial Filing Fees for settled or withdrawn cases will be calculated from the date the AAA receives the demand for arbitration as fo llows: • within 5 calendar days of filing-100%. • between 6 and 30 calendar days of filing-50% • between 31 and 60 calendar days of fili ng - 25% However, no refunds will be made once: • any arbitrator has been appointed I including one arbit rator on a three-arbitra tor panell. Final Fees: If a case is settled or withdrawn prior to the first hearing taking place, all Final Fees paid will be refunded. However, if the MA is not notified of a cancellation at least 24 hours before a scheduled hearing date, the Final Fee will remain due and will not be refunded. :· , ·.,,_, .. ,., ,, .... r, ,,·····1, · ·n 1· ,., .. ,l•·; "' ,., .• (CONT] ;~tJJ.:,i riJhJ j ,n!-l~ J .rt r:< .. ~ t"J~ ~~-t tJ¾~~-;~:" . n_,,,;,J/:Jri >:r,::: ~;r\1nG'-, \:,, {Cont. ) • The Initial Filing Fee is payable in full by a filing party when a claim, counterclaim , or addi tional claim is fi led. • The Proceed Fee must be paid wi thin 90 days of the filing of the demand for arbitration or a counterclaim before the AAA will proceed with the further administration of the arbitration, including the arbitrator appointment process. • If a Proceed Fee is not submitted with in 90 days of the fi l ing of the Claimant's Demand for Arbitrat ion, the AAA will administratively close the file and notify all parties. • If the Flexible Fee Schedule is being used for the fil ing of a counterclaim , the counterclaim will not be presented to the arbi tra tor until the Proceed Fee is paid. • The Final Fee will be incurred for all cases that proceed to their first hear ing and is payable in advance at the t ime the first hearing is scheduled. • Fee Modifications: Fees are subject to increase if the cla im or counterclaim is increased after the initial filing date. Fees are subject to decrease if the claim or cou nterclaim decreases prior to the first hearing. • Cases with Three or More Arbitrators are subject to a minimum Initia l Fili ng Fee of $2,200, a $3,300 Proceed Fee and a Final Fee of $3,850. • Nonmonetary Claims: The non-monetary fi ling fee is the minimum fi l ing fee for any case re~uesting non-monetary relief. Where a party seeks both m onetary damages and non-monetary relief, the higher of the two filing fees wi ll apply. Refunds-Flexible Fee Schedule: Under the Flexible Fee Schedule, Filing Fees and Proceed Fees are non- refundable once incur red. Final Fees: If a case is settled or wi thdrawn pr ior to the first hearing taking place, all Fina l Fees paid will be refunded. However, i f the AAA is not notified of a cancellation at least 24 hours before a scheduled hearing di:lte, the Final Fee will remain due and will not be refunded. 2 C-Y'i'J)i\j ,/-~ \.l;l}il AMERICAN ARBITRATION A SSOCIATION~ ft,:~r,~f:hH1c·d. f \~H;:~ J\lJf.l~.fi~;flbJ.0 •i~ iJ1e~} S~t~ntt:.1r~ (=r:t❖ rni~d ~.::v~-ir.E:r[l~1 ·~·;i~:f;: ?>.:i!11.:~r:~t;~.t:-)B Additional Party Fees: Additional Party Fees will be charged as described above, and in addition: • Additional Party Fees are payable by the party, whether a claimant or respondent, that names the addit ional parties to the arbitration. .. , .. l"' 'j', ... . - ..---- ·:r .... ,.. /»' • I . ···1• 1 · --,- (CONT ) ;':P~:.:·:Vt:~: t Hf\. Ph: ~--t!-: ._;-:,__.ti ,~L ~ U:;j . • Such fees shall not exceed 50% of t he base fees in the fee schedule, except that the AAA reserves the right to assess additional fees where there are more than 10 separately represented parties. • An example of the Additional Party Fee is as follows: A single claimant represented by one attorney brings an arbit rat ion against two separate respondents. however, both respondents are represented by the same attorney. No Additional Party Fees are due. However, if the respondents are represented by different attorneys, or if one of the respondents is self-represented and the other is represented by an attorney, an additional 10% of the Initial Filing fee is charged to the claimant. If the case moves to the Proceed Fee stage or the Final Fee stage, an additional 10% of those fees will also be charged to the claimant. Incomplete or Deficient Filings: Where the appl icable arbitration ag reement does not reference the AAA, the AAA will attempt to obtai n the agreement of all parties to have the arbitration administered by the AAA. • Where the AAA is unable to obtain the parties· agreement to have the AAA ;id m inister the arbitr·ation , the AAA will not proceed further and wil l ad ministra t ively close the case. The AAA will also return the fil ing fees to l he filing party, less the amount specified in the fee schedule above for deficient filings. • Parties that file Demands for Arbitration that are incomplete or otherwise do not meet the fi l ing requirements conta ined in the rules shall also be charged the amount specified above for deficient filings i f they fail or are unable to respond to the AAA's req uest to corr·ect the defic iency. Arbitrations in Abeyance: Ca ses held in abeyance by mutual agreement for one year will be assessed an annual abeyance fee of $500, to be split equally among the part ies. If a party refuses to pay the assessed fee, the other party or part ies may pay the ent ire fee on behalf of all pa rties, otherwise the arbitrat ion will be administrat ively closed. All filing requirements, including the payment of filing fees, must be met before a matter will be placed in abeyance. Fees for Additional Services: The AAA reserves the right to assess additional administrative fees fo r services performed by the AAA that go beyond those provided fo r in the AAA's ru les, but which are required as a result of the parties· agreement or stipulation. Hearing Room Rentals: The fees descr ibed above do not cover the cost of hearing rooms, which are available on a rental basis. Check with the AAA for availabil ity and rates. ff.~ c:i.1 i:-:1 t i,:J f~ ~- ·~·/\t~ ~I~ i~1,~;;t f@!: ivc f 1f•ir:: S>c ~--1 c~ij i ~ i0:-:i A $250 non-refundable deposit , which will be applied toward the mediation fee, is required to initiate the AAA's administration of the mediation and appointment of the mediator. The mediator's fee is stated on his or her resume. The AAA administrative fee, split by the parties, is $75 per hour billed by the mediator with a minimum four hour charge for any mediation held . Expenses refe renced in Section M- 17 of the Mediation Procedures may also apply. If a matter submitted fo r mediation is withdrawn or cancelled or results in a settle ment after the request to initiate mediation is filed but prior to the mediation conference, the AAA administrative fee is $250 (to which the deposit will be applied] plus any mediator time and expenses incurred . These costs shall be borne by the initiating party un less the parties agree otherwise. If you have questions about mediation costs or services, visit www.adr.org or contact your local AAA office. 3 rH;·"::ini Exhibit J Carter Declaration xhibit art eclar t o Filed 8/21/l 7 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DNISIONONE OTO, L.L.C., Plaintiff and Appellant, V. KEN KHO, Defendant and Respondent; JULIE A. SU, as Labor Commissioner, etc., Intervener and Appellant. Al47564 (Alameda County Super. Ct. No. RG15781961) Ken Kho filed a claim for unpaid wages with the California Labor Commissioner (commissioner) against his former employer, OTO, L.L.C., doing business as One Toyota of Oakland (hereafter One Toyota). After settlement discussions failed, One Toyota filed a petition to compel arbitration. Under the arbitration agreement, which One Toyota required Kho to execute without explanation during his employment, the wage claim would be subject to binding arbitration conducted by a retired superior court judge. Because the intended procedure incorporated many of the provisions of the Code of Civil Procedure and the Evidence Code, the anticipated arbitration proceeding would resemble ordinary civil litigation. The trial court denied the petition to compel. Under Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109 (Sonic II), an arbitration agreement that waives the various advantageous provisions of the Labor Code governing the litigation of a wage claim is substantively unconscionable if it fails to provide the employee with an affordable and accessible alternative forum. The trial court concluded that the alternative anticipated by One Toyota's arbitration agreement failed this standard because it effectively required Kho to retain counsel and did not expressly provide for him to recover his attorney fees if he prevailed. We reverse, concluding the arbitration proceeding satisfies the Sonic II requirements of affordability and accessibility. I. BACKGROUND Kho worked as an auto mechanic for One Toyota from January 2010 through April 2014, when his employment was terminated. Several months later, in October 2014, Kho filed a wage claim with the commissioner. In November 2014, Kho and One Toyota participated in an unsuccessful settlement conference, mediated by a deputy labor commissioner. The parties continued settlement discussions for the following month, until, in mid-December, One Toyota requested that the commissioner's office forward a proposed settlement agreement to Kho. After Kho "decided not to accept" the offer, he requested a so-called "Berman hearing" on his claim. 1 On January 30, 2015, the commissioner notified One Toyota ofKho's request, and in March the hearing was scheduled for the following August. In July, Kho requested the issuance of a subpoena for records from One Toyota in preparation for the hearing. The subpoena was issued, requiring One Toyota to bring the requested documents to the hearing. On the morning of the Berman hearing, a Monday, One Toyota' s attorney faxed a letter to the commissioner's office, requesting that the hearing be taken off calendar because One Toyota had filed a petition to compel arbitration and stay the administrative proceedings on the prior Friday.2 By return fax, the commissioner's office informed 1 Apparently Kho's refusal of the offer was not communicated to One Toyota by the commissioner until March 2015, at which time One Toyota told the commissioner it would continue to try to settle the matter. By that time, of course, One Toyota had received notice of the scheduled Berman hearing. 2 The parties dispute whether this was the first time One Toyota raised the issue of arbitration. In a declaration filed later, One Toyota's attorney claimed to have informed Kho at the time of the settlement conference that it intended to seek arbitration of his 2 counsel that the hearing would proceed as scheduled. At the appointed time, counsel for One Toyota appeared, served Kho with the petition to compel and stay proceedings, and left. Undeterred, the hearing officer proceeded with the hearing in One Toyota's absence and later issued an extensive "Order, Decision, or Award" (ODA) finding Kho entitled to $102,912 in unpaid wages and $55,634 in liquidated damages, interest, and penalties. One Toyota thereafter sought de novo review of the ODA in the trial court pursuant to Labor Code section 98.2, posting the requisite bond to secure payment of the award. (Id., subd. (b).) At the same time, One Toyota supplemented its petition to compel arbitration with the filing of a motion to vacate the ODA. By stipulation, the commissioner was allowed to intervene in the trial court proceedings. One Toyota's petition to compel arbitration was premised on a "Comprehensive Agreement- Employment At-Will and Arbitration" (Agreement), executed by Kho on February 22, 2013, three years into his employment. The substance of the Agreement appears to be quite similar to the arbitration agreement addressed in the Sonic decisions. (See Sonic II, supra, 57 Cal.4th at pp. 1125- 1126, 1146; Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659, 680 (Sonic I).) Notwithstanding its designation as a "comprehensive" employment contract, the one and one-quarter page contract is merely an arbitration clause grafted onto an acknowledgment of at-will employment. The clause, written in a tiny font size, consists of a dense, single-spaced paragraph that occupies nearly the entirety of the first page.3 The terms of the clause are broad, requiring arbitration of "any claim, dispute, and/or controversy" by either party against the other. Although arbitration under the Agreement purports to be subject to the procedures of the California Arbitration Act (CAA; Code Civ. Proc.,§ 1280 et seq.), the clause requires any arbitration to be conducted by a retired California superior court judge and in claims. Both Kho and the deputy commissioner who conducted the hearing denied that the issue of arbitration was raised, and One Toyota acknowledged there is no written record reflecting this interaction. The trial court did not resolve this issue of fact. 3 The clause is written in seven-point font size. For purposes orc1emons1ration. this scnrence is written in seven• paint ron1. A copy of the Agreement is attached as an appendix to this decision. 3 conformance with California laws governing pleading and evidence. Accordingly, the clause permits the full extent of discovery authorized by the CAA, authorizes demurrers and motions for summary judgment, among all other California pleadings, and requires the arbitration hearing to be conducted pursuant to the Evidence Code. It anticipates, in short, ordinary civil litigation, followed by the equivalent of a civil bench trial, except that one or both parties must finance the judge and facilities. With respect to the allocation of the costs of arbitration, the clause states: "If [ Code of Civil Procedure section] 1284.2 conflicts with other substantive statutory provisions or controlling case law, the allocation of costs and arbitrator fees shall be governed by said statutory provisions or controlling case law instead of [Code of Civil Procedure section] 1284.2."4 In opposing the petition to compel, Kho explained the circumstances of his execution of the Agreement: "After working for One Toyota of Oakland for approximately 3 years, Alba, who was a 'porter' employed with [the human resources department of] One Toyota of Oakland, brought ... paperwork for me to sign. This happened approximately in February 2013. [,r] ... I remember working at my station and Alba asked me to sign several additional documents in February 2013. I was not asked to come into the human resources office to review the documents and I was required to sign and return them immediately to Alba, who was waiting in my work station for me to finish signing them. It took about 3-4 minutes for me to sign these documents. After I signed them, I gave the documents back to Alba and I was not given an opportunity to read what those documents were. [ii] . .. I was not provided with a copy of the documents signed on [sic] February 2013. No one from One Toyota of Oakland read to [sic] the contents of the documents to me nor did they explain to me that I was signing an arbitration agreement and waiving any of my rights. [if] .. . [ A ]t no point during my 4 Code of Civil Procedure section 1284.2 states: "Unless the arbitration agreement otherwise provides or the parties to the arbitration otherwise agree, each party to the arbitration shall pay his pro rata share of the expenses and fees of the neutral arbitrator, together with other expenses of the arbitration incurred or approved by the neutral arbitrator, not including counsel fees or witness fees or other expenses incurred by a party for his own benefit." 4 employment with One Toyota of Oakland did I receive a copy of the arbitration agreement. My first language is Chinese and a copy of this agreement was not provided in my native language." One Toyota did not dispute Kho's account. The trial court denied the petition to compel. In an extensive written decision, the court found "that there was a high level of procedural unconscionability connected with the execution of the arbitration agreement in this case." It noted Kho was not given time to review the Agreement, was given no explanation of it, and was not given a copy afterward, which the court found "consistent with the conclusion that the arbitration provision was imposed on [Kho] under circumstances that created oppression or surprise due to unequal bargaining power." The court also found the Agreement substantively unconscionable under Sonic II because it deprived Kho of the advantages of the commissioner's procedures, which provide for a relatively quick, inexpensive method for resolving wage claims that is designed to accommodate pro se claimants, like Kho, without providing an "accessible and affordable" alternative. As the court noted, the Agreement anticipates close to a full trial, which would necessitate the hiring of counsel, but it does not provide for the recovery of attorney fees to incentivize counsel. Because the court denied the petition to compel, it declined to address Kho' s argument that One Toyota's last-minute assertion of its right to arbitrate waived that right. Although the court denied the petition to compel, it did grant One Toyota's motion to vacate the ODA, concluding that the agency abused its discretion in proceeding with the hearing after having been informed that Kho had executed an agreement to arbitrate that could moot the proceeding. One Toyota has appealed the denial of its petition to compel arbitration, while the commissioner, as intervener, has cross-appealed the order vacating the ODA. Kho has not appeared personally or by counsel, but the commissioner has filed a respondent's brief asserting arguments on his behalf. 5 II. DISCUSSION A. Governing Law 1. Unconscionability " 'A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract. ' [Citation.] A party seeking to compel arbitration of a dispute 'bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.' " (Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 8.) The Supreme Court summarized the doctrine of unconscionability in the context of arbitration agreements in Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899 (Sanchez): " ' "One common formulation of unconscionability is that it refers to ' "an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party." ' [Citation.] As that formulation implicitly recognizes, the doctrine of unconscionability has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results." ' [Citation.] " ' "The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine ofunconscionability." [Citation.] But they need not be present in the same degree. "Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves." [Citations.] In other words, 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.' [Citation.] Courts may find a contract as a whole 'or any clause of the contract' to be unconscionable. [Citation.] 6 "As we stated in Sonic II: 'The wiconscionability doctrine ensures that contracts, particularly contracts of adhesion, do not impose terms that have been variously described as"' "overly harsh"'" [citation]," 'unduly oppressive'" [citation]," 'so one- sided as to "shock the conscience" '" [citation], or '\mfairly one-sided" [citation]. All of these formulations point to the central idea that 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" [citation]. These include "terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, fine-print terms, or provisions that seek to negate the reasonable expectations of the nondrafting party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction."'" (Sanchez, supra, 61 Cal.4th at pp. 910- 911.) When, as here, the evidence is not in dispute, we review de novo a trial court's decision on a petition to compel arbitration. (Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 683.) 2. Litigation of Wage Claims Claims for unpaid wages filed by California workers are investigated by California's Division of Labor Standards Enforcement, headed by the commissioner. (Performance Team Freight Systems, Inc. v. Aleman (2015) 241 Cal.App.4th 1233, 1237 (Aleman).) The handling of such claims was explained in Sonic I, supra, 51 Cal.4th 659, which held that the right to the commissioner's procedures cannot be waived:5 " 'If an employer fails to pay wages in the amount, time or manner required by contract or by statute, the employee has two principal options. The employee may seek judicial relief by filing an ordinary civil action against the employer for breach of contract and/or for the wages prescribed by statute. [Citations.] Or the employee may 5 This holding was overruled by Sonic II, supra, 57 Cal.4th 1109. 7 seek administrative relief by filing a wage claim with the commissioner pursuant to a special statutory scheme codified in [Labor Code] sections 98 to 98.8. The latter option was added by legislation enacted in 1976 (Stats. 1976, ch. 1190, §§ 4-11, pp. 5368-5371) and is commonly known as the "Berman" hearing procedure after the name of its sponsor.' [Citations.] .. Once an employee files a complaint with the Labor Commissioner for nonpayment of wages, [Labor Code] section 98, subdivision (a)' "provides for three alternatives: the commissioner may either accept the matter and conduct an administrative hearing [citation], prosecute a civil action for the co11ection of wages and other money payable to employees arising out of an employment relationship [citation], or take no further action on the complaint. [Citation.]"' [Citation.] ... (P]rior to holding a Berman hearing or pursuing a civil action, the Labor Commissioner's staff may attempt to settle claims either informally or through a conference between the parties. [Citation.) "A Berman hearing is conducted by a deputy commissioner, who has the authority to issue subpoenas. [Citations.] 'The Berman hearing procedure is designed to provide a speedy, informal, and affordable method of resolving wage claims. In brief, in a Berman proceeding the commissioner may hold a hearing on the wage claim; the pleadings are limited to a complaint and an answer; the answer may set forth the evidence that the defendant intends to rely on, and there is no discovery process; if the defendant fails to appear or answer no default is taken and the commissioner proceeds to decide the claim, but may grant a new hearing on request. [Citation.] The commissioner must decide the claim within 15 days after the hearing. [Citation.]' [Citation.) The hearings are not governed by the technical rules of evidence, and any relevant evidence is admitted 'if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs.' [Citation.] The hearing officer is authorized to assist the parties in cross-examining witnesses and to explain issues and terms not understood by the parties. [Citation.) The parties have a right to have a translator present. [Citations.] "Once judgment is entered in the Berman hearing, enforcement of the judgment is to be a court priority. [Citation.] The Labor Commissioner is charged with the 8 responsibility of enforcing the judgment and 'shall make every reasonable effort to ensure that judgments are satisfied, including taking all appropriate legal action and requiring the employer to deposit a bond as provided in [Labor Code] Section 240.' [Citation.] "Within 10 days after notice of the decision any party may appeal to the appropriate court, where the claim will be heard de novo; if no appeal is taken, the commissioner's decision will be deemed a judgment, final immediately, and enforceable as a judgment in a civil action. [Citation.] If an employer appeals the Labor Commissioner's award, ' [ a ]s a condition to filing an appeal pursuant to this section, an employer shalI first post an undertaking with the reviewing court in the amount of the order, decision, or award. The undertaking shall consist of an appeal bond issued by a licensed surety or a cash deposit with the court in the amount of the order, decision, or award.' [Citation.] The purpose of this requirement is to discourage employers from filing frivolous appeals and from hiding assets in order to avoid enforcement of the judgment. [Citation.] "Under [Labor Code] section 98.2, subdivision (c), 'If the party seeking review by filing an appeal to the superior court is unsuccessful in the appeal, the court shall determine the costs and reasonable attorney's fees incurred by the other parties to the appeal, and assess that amount as a cost upon the party filing the appeal. An employee is successful if the court awards an amount greater than zero.' This provision thereby establishes a one-way fee-shifting scheme, whereby unsuccessful appellants pay attorney fees while successful appellants may not obtain such fees. [Citation.] This is in contrast to [Labor Code] section 218.5, which provides that in civil actions for nonpayment of wages initiated in the superior court, the 'prevailing party' may obtain attorney fees. (6] 6 Following the issuance of Sonic I, this contrast between Berman proceedings and Labor Code section 281.5 was substantially mitigated when that section was amended to provide that a prevailing employee in a wage dispute can recover attorney fees, while a prevailing employer can recover such fees only if the employee brought the action in bad faith. (Stats. 2013, ch. 142, § 1.) 9 "Furthermore, the Labor Commissioner 'may' upon request represent a claimant 'financially unable to afford counsel' in the de novo proceeding and 'shall' represent the claimant if he or she is attempting to uphold the Labor Commissioner's award and is not objecting to the Commissioner's final order. [Citation.] Such claimants represented by the Labor Commissioner may still collect attorney fees pursuant to [Labor Code] section 98.2, although such claimants have not, strictly speaking, incurred attorneys fees, because construction of the statute in this manner is consistent with the statute's goals of discouraging unmeritorious appeals of wage claims. [Citation.] "In sum, when employees have a wage dispute with an employer, they have a right to seek resolution of that dispute through the Labor Commissioner, either through the commissioner's settlement efforts, through an informal Berman hearing, or through the commissioner's direct prosecution of the action. When employees prevail at a Berman hearing, they will enjoy the following benefits: (1) the award will be enforceable if not appealed; (2) the Labor Commissioner is statutorily mandated to expend best efforts in enforcing the award, which is also established as a court priority; (3) if the employer appeals, it is required to post a bond equal to the amount of the award so as to protect against frivolous appeals and evading the judgment; (4) a one-way attorney fee provision will ensure that fees will be imposed on employers who unsuccessfully appeal but not on employees who unsuccessfully defend their Berman hearing award, or on employees who appeal and are awarded an amount greater than zero in the superior court; (5) the Labor Commissioner is statutorily mandated to represent in an employer's appeal claimants unable to afford an attorney if the claimant does not contest the Labor Commissioner's award." (Sonic I, supra, 51 Cal.4th at pp. 671- 674, fu. omitted.) 3. Substantive Unconsci011ability in the Context of Wage Claim Arbitration In Sonic I, the Supreme Court held an arbitration clause that has the effect of waiving an employee's statutory right to Berman procedures to be substantively unconscionable. (Sonic I, supra, 51 Cal.4th at p. 686.) The circumstances of Sonic I were virtually indistinguishable from those presented here. The respondent was an auto dealership employee who had filed a wage claim with the commissioner. The arbitration 10 clause in his employment contract appears to have been very similar to that in the Agreement. (Id. at pp. 669, 680; see Sonic II, supra, 57 Cal.4th at p. 1146.) In Sonic II. the Supreme Court acknowledged that Sonic I's holding of per se unconscionability was inconsistent with the United States Supreme Court's intervening decision in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333. (Sonic 11, supra, 57 Cal.4th at p. 1141.) At the same time, Sonic II recognized that unconscionability remained a valid defense to a petition to compel arbitration of a wage claim, at least under the correct circumstances. (Id. at p. 1142.) With respect to an adhesive contract, "the unconscionabjlity doctrine is concerned .. . with terms that are 'unreasonably favorable to the more powerful party' [citation]." (Id. at p. 1145.) Accordingly, the court concluded, "the waivability of a Berman hearing in favor of arbitration does not end the unconscionability inquiry" and remanded the matter to the trial court to conduct a "fact- specific inquiry" regarding "the totality of the agreement' s substantive terms as well as the circumstances of its formation to determine whether the overall bargain was unreasonably one-sided." (Id. at p. 1146.) In discussing the nature of this inquiry, the court explained, 'The Berman statutes include various features designed to lower the costs and risks for employees in pursuing wage claims .... Waiver of these protections does not necessarily render an arbitration agreement unenforceable, nor does it render an arbitration agreement unconscionable per se. But waiver of these protections in the context of an agreement that does not provide an employee with an accessible and affordable arbitral forum for resolving wage disputes may support a finding of unconscionability. As with any contract, the unconscionability inquiry requires a court to examine the totality of the agreement's substantive terms as well as the circumstances of its formation to determine whether the overall bargain was unreasonably one-sided." (Sonic II, supra, 57 Cal.4th at p . 1146.) While Sonic II later reiterated that waiver of Berman hearing protections alone would not support a finding of unconscionability (id. at p. 1147). it provided no further guidance regarding the type of "affordable and accessible" procedure that would stand as a suitable substitute. Rather, the court merely repeated that " in the context of a standard contract of adhesion setting 11 forth conditions of employment, the unconscionability inquiry focuses on whether the arbitral scheme imposes costs and risks on a wage claimant that make the resolution of the wage dispute inaccessible and unaffordable, and thereby 'effectively blocks every forum for the redress of disputes, including arbitration itself.' " (Id. at p. 1148.) Although Sonic II remanded the matter for an inquiry into both the procedural and substantive unconscionability of the arbitration clause in question, we assume that the dual requirements of affordability and accessibility are concerned only with substantive unconscionability. Both of these features are determined by the substantive terms of the arbitration agreement, not by the manner of its execution or its form. The requirements of affordability and accessibility therefore set the minimum standard that an arbitration clause requiring waiver of Berman procedures must meet to avoid a finding of substantive unconscionability as a result of that waiver. B. Unconscionability of the Agreement 1. Procedural Unconscionability A contract is adhesive, and therefore procedura1ly unconscionable to a degree, if "written on a preprinted form and offered on a take-it-or-leave-it basis." (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245; Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 243 [" 'It is well settled that adhesion contracts in the employment context, that is, those contracts offered to employees on a take-it-or-leave-it basis, typically contain some aspects of procedural unconscionability: ,,].) Given the circumstances of Kho's execution of the Agreement, there is no question that it was a contract of adhesion. The issue here is whether, as the trial comi found, the circumstances of its formation created a greater degree of procedural unconscionability, requiring" 'closer scrutiny' of the agreement's substantive fairness." (Farrar v. Direct Commerce, Inc. (2017) 9 Cal.App.5th 1257, 1268.) We conclude they did. "Procedural unconscionability pertains to the making of the agreement and requires oppression or surprise." (Magno v. The College Network, Inc. (2016) l Cal.App.5th 277, 285.) "The 'oppression' component of procedural unconscionability 'arises from an inequality of bargaining power of the parties to the contract and an 12 absence of real negotiation or a meaningful choice on the part of the weaker party.' [Citation.] 'Surprise is defined as" 'the extent to which the supposedly agreed-upon terms of the bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputed terms.'"'" (Lennar Homes of California, Inc. v. Stephens (2014) 232 Cal.App.4th 673, 688.) "The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party's review of the proposed contract was aided by an attorney." ( Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1348, fn. omitted.) The circumstances ofKho's execution of the Agreement demonstrated a high degree of oppression. As noted, the Agreement was not negotiated but presented on a take-it-or-leave-it basis. Further, the Agreement was submitted to Kho for signature at a time when One Toyota was already his employer; in the absence of any explanation, Kho could have inferred that execution of the document was expected of him as a condition of his employment. To avoid this implication, One Toyota could have excused Kho from his work station, submitted the Agreement to him with an explanation of both its purpose and meaning, and explained its significance, if any, for his further employment. It chose to do none of those things. Instead, the document was presented to him at his work station, where he was under pressure to perform his job. Not only did One Toyota provide no explanation for its demand for his signature, it selected a low level employee, a "porter," to present the Agreement, creating the impression that no request for an explanation was expected and any such request would be unavailing. These circumstances were highly coercive and appear intended to thwart, rather than promote, voluntary and informed consent. The issue of surprise is less clear-cut, but it is by no means absent. The Agreement seems intended as a parody of the classic adhesion contract. Written in a 13 single block, without paragraphs to delineate different topics, the arbitration clause is visually impenetrable. Because the entire Agreement occupies less than two pages, there was no practical need for One Toyota to choose a small typeface. Yet the font chosen is so small as to challenge the limits of legibility. Further, the language is legalistic, and the text is complex. The second sentence of the arbitration clause manages to occupy 11 lines of text, notwithstanding the tiny typeface. Some of the language, such as the reference to Code of Civil Procedure section 1284.2, requires a specialist's legal training to understand. It cannot be said that One Toyota was attempting to hide the ball by burying the arbitration clause in an otherwise prolix agreement, since the Agreement consists almost entirely of the arbitration clause. Yet the Agreement is drafted and composed in a manner, again, to thwart rather than promote understanding. 7 For these reasons, we conclude that the degree of procedural unconscionability was extraordinarily high. 2. Substantive Unconscionability Although we find a high degree of procedural unconscionability, we conclude the Agreement is not substantively unconscionable under the standard of Sonic II, which requires enforcement of a Berman hearing waiver if the arbitration clause provides an "accessible and affordable arbitral forum."8 (Sonic II, supra, 57 Cal.4th at p. 1146.) The commissioner first argues that the Agreement is substantively unconscionable under general arbitration law because it is unduly harsh or one-sided. (E.g., Sanchez, supra, 61 Cal.4th at p. 911.) In the abstract, however, the arbitration provisions of the 7 Because the record contains no information about Kho's English facility, we are less concerned with the failure to present him with a version of the Agreement written in Chinese, his native language. Many American immigrants who were born speaking another language are fluent in written English. 8 This requirement applies only to an arbitration clause contained in a contract of adhesion. While we find it unnecessary to review the procedural unconscionability of Kho' s execution of the Agreement, we have no doubt that the Agreement was a contract of adhesion, given the circumstances of its execution. (See Sonic II, supra, 57 Cal.4th at p. 1133 (a contract of adhesion is drafted by a party of superior bargaining strength and gives to the other party only the opportunity to adhere to the contract or reject it].) 14 Agreement are neither harsh nor one-sided. The arbitration clause does not, for example, require arbitration of claims most likely to be filed by an employee while excluding those of an employer. (E.g., Carbajal v. CWPSC, Inc., supra, 245 Cal.App.4th at p. 248.) Nor does it contain any other substantive features that appear, on their face, designed to benefit the employer. (See id. at pp. 250-251 [arbitration clause required each party to bear own fees, effectively waiving various employee fee recovery statutes].) The Agreement anticipates a proceeding very much like ordinary civil litigation, with no special procedural features that would tend to favor One Toyota-any more, at least, than the complexity and expense of civil litigation naturally tends to favor a party with greater sophistication and financial resources. Rather, the Agreement can be argued "harsh or one-sided" only in comparison to the various features of the Labor Code that seek to level the playing field for wage claimants- features that, as the Supreme Court characterized them, are "designed to lower the costs and risks for employees in pursuing wage claims, including procedural informality, assistance of a translator, use of an expert adjudicator who is authorized to help the parties by questioning witnesses and explaining issues and terms, and provisions on fee shifting, mandatory undertaking, and assistance of the Labor Commissioner as counsel to help employees defend and enforce any award on appeal." (Sonic II, supra, 57 Cal.4th at p. 1146.) The premise of Sonic II, however, was that these various features lawfully could be waived by an arbitration agreement governing wage claims, and the court presumably factored the permissibility of such a waiver into its unconscionability standard. As the court held, "Waiver of these protections does not necessarily render an arbitration agreement unenforceable, nor does it render an arbitration agreement unconscionable per se. But waiver of these protections in the context of an agreement that does not provide an employee with an accessible and affordable arbitral forum for resolving wage disputes may support a finding of unconscionability." (Ibid.) In other words, waiver of the various employee-friendly wage claim provisions of the Labor Code does not make an arbitration agreement unconscionable so long as the resulting 15 arbitration procedure is "affordable and accessible." We proceed on that assumption in considering the Agreement. As to the first factor, affordability, One Toyota acknowledges that it must pay all costs of arbitration under the Agreement. As noted above, the Agreement provides that the parties will split the costs of arbitration, as required by Code of Civil Procedure section 1284.2, unless "statutory provisions or controlling case law" provide otherwise. With respect to wage claims, One Toyota concedes that the Supreme Court's decision in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 (Armendariz) requires an employer to pay the costs of arbitration, notwithstanding section 1284.2. Armendariz held that certain statutory rights cannot be waived and that arbitration agreements encompassing such rights "must be subject to particular scrutiny."9 (Armendariz, at pp. 100, 101.) Given the importance of these rights, Armendariz held, an agreement requiring their arbitration must be interpreted to require the employer to pay any costs of arbitration "that the employee would not be required to bear if he or she were free to bring the action in court." (Id. at pp. 110- 111.) Accordingly, the Agreement's silence on arbitration costs must be interpreted under Armendariz to require One Toyota to pay the costs of arbitration. Because Kho will not be required to pay any costs of arbitration not required by the civil courts, the Sonic II requirement of affordability is presumably satisfied here. We find no merit in the commissioner's argument that the Agreement is unconscionable because it does not expressly inform Kho that One Toyota must pay the arbitral costs of a wage claim. The Agreement was intended to deal with a wide variety of legal claims potentially asserted by an employee against his or her employer, or vice versa. It is therefore not surprising that it does not contain any provision specifically addressing the allocation of costs for wage claim arbitration. Although the Agreement does not discuss the law applicable to cost-sharing with respect to any specific claim, it 9 Although Armendariz concerned the rights established by the California Fair Employment and Housing Act (Gov. Code,§ 12900 et seq.), One Toyota does not dispute that statutory wage rights are similarly unwaivable. 16 does recognize that there are statutory and common law exceptions to the general rule of cost-sharing established by Code of Civil Procedure section 1284.2, implicitly acknowledging the possibility, with respect to some claims, that One Toyota will be required to pay the costs. The arbitration clause is not unconscionable merely because it does not attempt to characterize those claims. The trial court held, and the commissioner argues, that the arbitration envisioned by the Agreement is not affordable because it will require Kho to retain counsel, while the Labor Code permits a wage claimant to be represented by the commissioner in a de novo proceeding following the Berman hearing and provides for recovery of attorney fees to a prevailing wage claimant. '0 (Lab. Code, §§ 98.2, subd. (c), 98.4.) We do not agree that the absence of representation by the commissioner makes arbitration unaffordable for purposes of Sonic II. First, legal representation for an employee is the most obvious expense arising in connection with wage claim arbitration. If the Sonic II court believed an arbitration agreement must provide for free counsel to avoid unconscionability, it easily could have said so, just as Armendariz expressly required the payment of other arbitration costs. Sonic II did not articulate this requirement, and its silence on the point is suggestive. Second, it must be understood that a wage claimant has no absolute right to counsel in the de novo portion of wage claim litigation. Representation lies in the discretion of the commissioner, unless the claimant has already prevailed at the Berman hearing and does not challenge that award. The Agreement therefore does not necessarily require an expense beyond that necessary under Labor Code procedures. Third, the claimant is not required to retain counsel for the arbitration but may proceed in pro. per. While this is certainly not the best approach, it is the option facing every litigant in ordinary civil litigation. The type of proceeding envisioned by the Agreement, while it is 10 Labor Code section 98.4 provides: "The Labor Commissioner may, upon the request of a claimant financially unable to afford counsel, represent such claimant in the de novo proceedings provided for in Section 98.2. In the event that such claimant is attempting to uphold the amount awarded by the Labor Commissioner and is not objecting to any part of the Labor Commissioner's final order, the Labor Commissioner shall represent the claimant." 17 potentially more complex than a typical arbitration hearing, is no more complex than the civil litigation required for a de novo hearing under the Labor Code. We conclude that the absence of free representation does not make a wage claim arbitration unaffordable. Nor does the lack of an express employee-favorable attorney fees provision, similar to Labor Code section 98.2, subdivision ( c ), cause the Agreement to be unconscionable, since the Agreement requires the application of another, similarly favorable provision of the Labor Code. Although the Agreement is silent as to the award of attorney fees, it requires the arbitrator to apply "the law governing the claims and defenses pleaded." Section 98.2 would not apply to an arbitration under the Agreement because it governs only de novo appeals from a Berman hearing. Labor Code section 218.5, however, applies more generally to "any action brought for the nonpayment of wages" and requires an award of reasonable attorney fees to a prevailing employee, while granting fees to a prevailing employer only if the employee's action was brought in bad faith. (Id., subd. (a).) In some circumstances this provision would be more favorable to an employee than section 98.2, since the latter allows an award of attorney fees to an employer whenever an appealing employee fails to recover any wages, regardless of the employee' s good faith. As One Toyota concedes, the required application of Labor Code section 218.5 has essentially the same legal effect as section 98.2, subdivision ( c ). While the factors affecting "accessibility" are not explored in Sonic II, we find nothing in the proceeding required by the Agreement that would cause it to be inaccessible to an employee. The commissioner argues that the Agreement should be found unconscionable because it replaced the relative simplicity of the Berman hearing with a complex proceeding resembling civil litigation. If the Labor Code required only a Berman hearing to resolve wage claims, the argument might have some force. The result of a Berman hearing, however, is nonbinding. An appeal by either party effectively nullifies the result, in favor of a de novo proceeding in superior court-in other words, in favor of ordinary civil litigation. Because the type of proceeding outlined by the Agreement is similar to civil litigation, it anticipates a proceeding that is no more 18 complex than will often be required to resolve a wage claim under the Berman procedures. Such a proceeding is presumably not inaccessible for purposes of Sonic II. The commissioner contends the proceeding anticipated by the Agreement is inaccessible because the Agreement does not contain a provision specifying the means for initiating an arbitration. While a well-drawn arbitration clause would have specified such means, the failure to designate a manner of commencing arbitration does not render the clause unconscionable. The failure actually introduces flexibility, since an arbitration presumably can be commenced in any reasonable manner. Although in a roundabout way, Kho effectively commenced an arbitration by filing a wage claim with the commissioner, thereby compelling One Toyota either to litigate under the Labor Code or respond with a petition to compel. A variety of other means would undoubtedly be recognized as sufficient for commencement of an arbitration. Nor do we find the proceeding inaccessible because the Agreement does not refer to a particular arbitration sponsor or set of rules. As noted, the Agreement provides that the proceeding will be governed by the pleading rules of the Code of Civil Procedure and by the Evidence Code, as applicable in California courts. 3. Enforcement of the Agreement As our discussion likely makes clear, we are disturbed by the manner in which the Agreement was drafted and presented to Kho for signature. Nonetheless, California arbitration law has consistently required both procedural and substantive unconscionability before an arbitration provision will be refused enforcement. (Sanchez, supra, 61 Cal.4th at p. 910 [ unconscionability requires both procedural and substantive unconscionability]; Aleman, supra, 241 Cal.App.4th 1233, 1248 [where no procedural unconscionability, arbitration agreement could not be found unconscionable].) Although a high degree of procedural unconscionability ordinarily imposes" 'closer scrutiny' of the agreement's substantive fairness" (Farrar v. Direct Commerce, Inc., supra, 9 Cal.App.5th at p. 1268), Sonic II appears to establish affordability and accessibility as a safe harbor when the claim of substantive unconscionability is premised on the waiver of Berman procedures. Given our conclusion that the Agreement is not substantively 19 unconscionable under Sonic 11, we must reverse the trial court's order denying the petition to compel arbitration. C. Waiver Although the commissioner does not contend on appeal that One Toyota waived its right to arbitrate entirely, it does contend that One Toyota's delay in asserting its right to arbitrate waived its right to avoid a Berman hearing. We discussed the law relating to waiver of arbitral rights through delay in Gloster v. Sonic Automotive, Inc. (2014) 226 Cal.App.4th 438: " 'State law, like the [Federal Arbitration Act (9 U.S.C. § 1 et seq.)], reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims. [Citation.] Although a court may deny a petition to compel arbitration on the ground of waiver [citation], waivers are not to be lightly inferred and the party seeking to establish a waiver bears a heavy burden of proof.' [Citation.) " 'Both state and federal law emphasize that no single test delineates the nature of the conduct that will constitute a waiver of arbitration. [Citations.] " 'In the past, California courts have found a waiver of the right to demand arbitration in a variety of contexts, ranging from situations in which the party seeking to compel arbitration has previously taken steps inconsistent with an intent to invoke arbitration [citations] to instances in which the petitioning party has unreasonably delayed in undertaking the procedure . .. . ' " ... ' [Citation.] " '[W]hether litigation results in prejudice to the party opposing arbitration is critical in waiver determinations.' [Citation.] ' " 'The moving party's mere participation in litigation is not enough [to support a finding of waivert the party who seeks to establish waiver must show that some prejudice has resulted from the other party's delay in seeking arbitration. ' [Citation.]" [Citations.] [ii] ... [ii] ... "[ C]ourts will not find prejudice where the party opposing arbitration shows only that it incurred court costs and legal expenses." [Citation.]' [Citation.] 'Rather, courts assess prejudice with the recognition that California's arbitration statutes reflect" 'a strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution' " and 20 are intended" 'to encourage persons who wish to avoid delays incident to a civil action to obtain an adjustment of their differences by a tribunal of their own choosing.' " [Citation.] Prejudice typically is foW1d only where the petitioning party's conduct has substantially undermined this important public policy or substantially impaired the other side's ability to take advantage of the benefits and efficiencies of arbitration. [,I] For example, courts have found prejudice where the petitioning party used the judicial discovery processes to gain information about the other side's case that could not have been gained in arbitration [citations]; where a party unduly delayed and waited until the eve of trial to seek arbitration [citation]; or where the lengthy nature of the delays associated with the petitioning party's attempts to litigate resulted in lost evidence [citation].'" (Gloster v. Sonic Automotive, Inc., supra, 226 Cal.App.4th at pp. 447-448.) In her briefs, the commissioner did not attempt to demonstrate prejudice accruing from One Toyota's delay in asserting its right to arbitrate, and we find none. The first portion of the Berman procedure involves settlement discussions. We would be reluctant to require an employer to forego settlement discussions in order to preserve the right to arbitration, since such discussions seem of potential benefit to both sides of a wage dispute. While it would have been preferable for One Toyota to have asserted its right to arbitration immediately upon the failure of settlement discussions in order to avoid inconvenience to Kho and the commissioner, inconvenience does not equal prejudice. 11 Neither Kho nor the commissioner was required to spend substantial time or funds in preparation for the Berman hearing, which is informal by design. At oral argument, the 11 In finding that One Toyota did not forfeit its right to arbitration by waiting until the 11th hour to file its petition to compel, we do not mean to suggest we condone its conduct. At oral argument, One Toyota insisted it waited until the morning of the hearing to inform Kho and the commissioner of its decision on the chance the matter would settle on the eve of the hearing. Yet the record reveals that One Toyota's last settlement effort occurred months before the hearing, and it made no attempt to settle at the Berman hearing, where its attorney stayed only long enough to serve Kho with papers. While we find no forfeiture in the absence of prejudice, we do find an unacceptable lack of courtesy. 21 commissioner argued Kho was prejudiced by delay, but we find there was no significant delay. The Berman hearing proceeded as scheduled. Although that will now be followed by an arbitration proceeding, One Toyota's assertion of its right to a trial de novo ensured that Kho's wage claim would not be resolved promptly even in the absence of arbitration. One Toyota's assertion of its right immediately prior to the commencement of the hearing therefore caused no prejudice. In the absence of prejudice, we cannot find One Toyota to have waived its right to assert the Agreement. Without discussing the extensive case law governing waiver of the right to arbitrate, the commissioner cites language from Sonic II in an attempt to argue that the decision requires a petition to compel arbitration to be filed sufficiently far in advance of a scheduled Berman hearing to allow the petition to be decided prior to the hearing. It is clear, however, that Sonic 11 was not concerned with waiver and did not purport to render any holding with respect to that issue. The commissioner's attempt to construe the decision as establishing a deadline for the filing of a petition to compel must therefore be rejected. (See People v. Brooks (2017) 3 Cal.5th 1, 110 ["It is axiomatic that a case is not authority for an issue that was not considered."].) D. The Commissioner's Cross-appeal Given our conclusion that Kho waived his right to pursue the Berman procedures in favor of the arbitration procedure contained in the Agreement, the commissioner's appeal of the order vacating the ODA is moot. Even if we concluded the trial court erred in vacating the ODA, we could not render effective relief because Kho was not entitled to a Berman hearing in the first place. (See McClatchy v. Coblentz, Patch, Duffy & Bass, LLP (2016) 247 Cal.App.4th 368, 375 [matter is moot when the court cannot grant effective relief].) We accordingly affirm the trial court's order vacating the ODA. III. DISPOSITION The trial court's denial of One Toyota's petition to compel arbitration is reversed, and its order vacating the ODA is affirmed. The matter is remanded to the trial court with directions to enter a new order granting the petition to compel arbitration. One Toyota may recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(l), (2).) 22 Margulies, J. We concur: Humes, P.J. Banke, J. Al47564 23 argulies, e cur: umes, . . anke, 1 ( l, - COMPREHENSIVE AGREEMENT EMPLOYMENT AT-WILL AND ARBITRATION CT005 It laboreby ,.-i by and~ l l.. ~~ Kfh~ ' A•lf(lloCompany or Che Auccilll<. 2. I 11 .. acknowledge that lho Company utilize& • ,yslom of i!ltomatlv• dispute re50(ution thal involves biodlng arbit,alion to ~ .. Ive all dhpll!Oo IVblch Al'Y arise O~I of lhe cmp~t - - Ba:lll!C of lhe .C11111u1I benefits (tuth IS reduced cxpcn"' u,d ln-3 effidoncy} \\ftion private binding arbirratlon can provide bojh tbe Comp111y ..i myself, l Ind tho Company bod\ agree !hat 1/ly claim, dispulc, ond/or comoversy that Di!her p-1y may have against Qile ano1hor (lnolucllos. bul aot llrnited to. any claims or dlicrilllinll!lon and haraumen\ iwethor lhoy be bo>Od ru, tho Ct.lifrkcrs' Coinpe,,aadon Act, .,d ll~ ~w ~ claims) aht!I be subrnilled to ud detcrmino4 .. dusivoly by binding llbill1licn. In order to provido far tho officialt 1111d timely 1djudle11lon of c:hilms, 1M lll>ICralor la J)rOhib~ed from con.,o!ldoti,,g tllo cilf!YU of 04!,m Into one proceeding, Thi, rne..n. t11~t-,, srbl1r11tor will hoar only my iQdlvldu•I olllima ond dacs nol h8vo tt,o ,utboril)' to fubion a proceeding au class orcollootiw, IIC!lcn ortoawerd tdlcl'toapoupofemplo,..sfn =proco«llns, lo rhomulmum e>Clenlp'l!llkted by law. Thu,, !ho Company hutherlght to delbai any 111<:mpt by mo to ftlo or join olhtt employees la• cits,, MI amoont or damaaet (eg., rdlof !hit """1d othtunderSe~lon 7 Q(lhcNalloDal LaborR.totlons Ac~ lnolodiog butflllt limited to chtllenging mo l~on ~ a olass, oollecli"", or JolDt ocli.,.. I uadenland ud •nrcc rbt after 1 o,Null admlcl3!1allve romedla, thrOllgh Ibo Department of fair fmp~cot and Hoomg and/or 1he l!qual Empto,menr 0Pf)Ol1lrlily ~. I tlllltt pu!lilla 1111)' m:h cllims lbrough this binding arbillltion p,owlare. I oct•owlodge U,at th• Company'• lrusinoss (r,pairmg outomobik, and "111ng alllomol>llu 1ndipam coming fiom oullldo l"8 Slate) 111d rho tl8IUrO ot'my ~Ml llul blltinca, effect lnlcntale ..,~ l agn,e lhat the 1rbitn1lon and !his Agnemcnt lhall bo controlled by lho 1'"4cral Atbltnlllon A"'-, in COJ1form!ty with !ho prooedu.-of tho Calil\Jmle M>il!ldon.Alll (Cal. Code Clv. P.oo. soc 1280 et seq, lndu""1a ...u.., 1213.0S and ell lh• Acl't ~er mandalory ind pcnn~ivo rights ro dl-•ry). )l~c, In 1ddilioll Ill requk.....,.. fmpo1ed by law, any mbllrllllr hum shell bt a retired Calllbn1l1 Supl~oo p,oc«dl11&s ON privileged in eotoro"lllco wlth Cal. Civil Ccdo Section 47(b). Ao TWOMb!y requlrod to allow l\lll llllC and benefit of ~,i, agn:em<.nt's nodlfiooliont lo the Act'• procedutes, the aibitnlor .chall e> the llltrrprcl0ll101, applkablllly, 11tf•c•bllley,