Opposition To Defendants Motion To Compel Arbitration

Motion

Cal. Super. - 2nd Dist.October 23, 2018

Electronically FILED by {iperior Court of California, County of Los Angeles on 02/28/2019 11:28 AM Sherri R. Carter, Executive Officer/Clerk of Court, by S. Bolden,Deputy Clerk 1 || Edward W. Choi, State Bar No. 211334 Paul M. Yi, Esq. SBN 207867 2 LAW OFFICES OF CHOI & ASSOCIATES, APLC 3 || 515 S. Figueroa St., Suite 1250 Los Angeles, CA 90071 4 || Telephone: (213) 381-1515 5 Facsimile: (213) 465-4885 6 || Attorneys for Plaintiff MICHAEL SILVA 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF LOS ANGELES 10 CENTRAL DISTRICT - UNLIMITED CIVIL 11 12 MICHAEL SILVA, an individual, ) Case No.: 18STCV01915 13 ) ) Assigned for All Purposes to Honorable Mark V. 14 Co ) Mooney in Department 68 Plaintiff, ) 15 ) 16 VE ) PLAINTIFF’S OPPOSITION TO ) DEFENDANT’S MOTION TO COMPEL 17 ) ARBITRATION NEXEM-ALLIED, LLC., a Limited Liability ) 18 || Company, POLARIS INDUSTRIES, INC., a ) DATE: March 14, 2019 19 Corporation, and DOES 1 through 30, inclusive, ) TIME: 8:30 a.m. ) DEPT: 68 20 ) Defendants. ) 21 ) 22 ) 23 24 25 26 27 28 PLAINTIFE’S OPPOSITION TO DEFENDANT’S MOTION TO COMPEL ARBITRATION - 1 OO 0 N N L L BA W N = ND ND N N N N N N N m E e m e m e m e m e m e m e m c o N N Un BR A W I N D = D 0 0 N D R E W I N D = Oo Plaintiff MICHAEL SILVA submits the following Opposition to the Motion to Compel Arbitration of Defendant NEXEM-ALLIED, LLC. as follows: MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION AND STATEMENT OF FACTS Plaintiff MICHAEL SILVA (“Plaintiff”) started working for Defendant NEXEM-ALLIED, LLC. (“Defendant” or "NEXEM") on or about April 23, 2018 and was terminated on August 9, 2018. (Declaration of Plaintiff MICHAEL SILVA (“Silva Decl.”) 2). California law is well settled that that Labor Code claims cannot be compelled to arbitration. Hoover v. American Income Life Insurance Co., 206 Cal. App. 4™ 1193 (2012). An exception to this policy exists when an arbitration agreement is subject to the Federal Arbitration Act (“FAA”). Id. at 1207. Here, although Defendant’s Arbitration Agreement alleges that it is governed by the FAA, Defendant has not introduced any evidence that Plaintiff’s duties involved those that affect interstate commerce. On the contrary, Plaintiff has declared that he did not perform any fork lift operations outside the State of California. (Id. at 7) Thus, on this basis alone, Defendant’s Motion to Compel should be denied. Further, the arbitration agreement is unconscionable. The Arbitration Agreement is a classic adhesion contract and is procedurally unconscionable. Plaintiff was forced to sign the Arbitration Agreement. Plaintiff was not provided an opportunity to negotiate any of the terms contained in the arbitration agreement. (Id. at {3) Plaintiff did not have the opportunity to fully review the agreement due to the complex nature and the length of the document. (Id. at 4) Prior to signing any of the foregoing agreement, Plaintiff was never afforded an opportunity to make any changes. (Id. 5) Finally, Plaintiff was told that if he did not sign the arbitration agreement, he would not be able to apply for his employment with NEXEM. (/d. at 6) Thus, Plaintiff was forced to sign the agreement. Finally, Plaintiff never received a copy of the arbitration agreement nor did he receive a countersigned version of the settlement. The Arbitration Agreement is substantively unconscionable because there are no instances where Defendant would have any claim, dispute, or controversy that it could bring against Plaintiff in court. Further, the one-way agreement is supported by the fact that Defendant did not even have a PLAINTIFFS OPPOSITION TO DEFENDANT'S MOTION TO COMPEL ARBITRATION - 2 OO 0 N N L L BA W N = ND ND N N N N N N N m E e m e m e m e m e m e m e m c o N N Un BR A W I N D = D 0 0 N D R E W I N D = Oo representative sign the arbitration agreement. Thus, the unconscionable terms invalidate the Arbitration Agreement. II. LEGAL ARGUMENT A. DEFENDANT HAS NOT MET ITS EVIDENTIARY BURDEN TO ESTABLISH AN ENFORCEABLE AGREEMENT TO ARBITRATE Given that arbitration is “a matter of contract,” the party seeking to compel arbitration must prove the existence of a “voluntary agreement to arbitrate.” Avery v. Integrated Healthcare Holdings, Inc., 218 Cal. App. 4th 50, 59 (2013) (italics in original; citing Sparks v. Vista Del Mar Child & Family Services 207 Cal.App.4th 1511, 1517-18 (2012) (“Because arbitration is a contractual matter, a party who has not agreed to arbitrate a controversy cannot be compelled to do $0.”); Gorlach v. Sports Club Co., 209 Cal. App. 4th 1497, 1505 (2012) (“There is no public policy in favor of forcing arbitration of issues the parties have not agreed to arbitrate. It follows that when presented with a petition to compel arbitration, the trial court's first task is to determine whether the parties have in fact agreed to arbitrate the dispute. We apply general California contract law to determine whether the parties formed a valid agreement to arbitrate.”) (Citations omitted); Mitri v. Arnel Mgmt. Co., 157 Cal. App. 4th 1164, 1168-69 (2007) (holding that arbitration policy in employee handbook was not a binding contract and, thus, was not binding on the plaintiff). The evidence submitted by Defendants in their Motion must meet the same statutory requirements for admissibility of evidence at trial. Jeffers v. Screen Actors Extras, Inc. (1955) 134 Cal.App.2d 622, 623. Here, the alleged Arbitration Agreement was signed by Plaintiff. However, the arbitration agreement was not signed by the Defendant. In order for a valid contract to exist, both parties must sign the agreement, not just one party. B. DEFENDANT HAS NOT MET ITS BURDEN THAT THE ARBITRATION AGREEMENT IS SUBJECT TO THE FAA In Hoover, the plaintiff filed a class action lawsuit against the defendant for violations of Labor Code §§ 203, 1194, 2802 etc... Id. at 1197-1200. Thereafter, the defendant sought to compel arbitration pursuant to a separate arbitration agreement (as well as pursuant to a collective bargaining PLAINTIFF’S OPPOSITION TO DEFENDANT'S MOTION TO COMPEL ARBITRATION - 3 OO 0 N N L L BA W N = ND ND N N N N N N N m E e m e m e m e m e m e m e m c o N N Un BR A W I N D = D 0 0 N D R E W I N D = Oo agreement). Id. at 1198-1201. The trial court denied the defendant’s motion to compel arbitration. Id. at 1201. On appeal, Court upheld the ruling for various reasons. Id. at 1201-09. Specifically, in rejecting defendant’s appeal, the Court unanimously agreed that such “state statutory wage and hour claims are not subject to arbitration, whether the arbitration clause is contained in the [collective bargaining agreement] or an individual agreement.” [emphasis added] Id. at 1206. In citing Labor Code § 229, the Court held that its intent “is to assure a judicial forum where there exists a dispute as to wages, notwithstanding the strong public policy favoring arbitration. Id. at 1207. An exception to the general rule occurs when there is federal preemption by the FAA, as applied to contracts evidencing interstate commerce. Id. Although the Defendant’s arbitration agreement stated that it was subject to the FAA, Defendant failed its burden to demonstrate FAA coverage by declarations and other evidence. Id. at 1208. This Motion and the Arbitration Agreement at issue in matter is no different than the one at issue in Hoover. As in Hoover, Defendant has failed to prove that the Plaintiff’s duties involve interstate commerce. Indeed, just like the Defendant in Hoover, Defendant has failed to introduce a single declaration or evidence that Plaintiff's duties, as a fork lift operator, involved duties that affect interstate commerce. On the contrary, Plaintiff states that he was a fork lift operator and never performed any work outside the State of California during his employment with Defendant. Thus, Plaintiff’s job duties did not affect, in any way, interstate commerce and therefore, the FAA is inapplicable. Thus, the court should rule as the trial court did in Hoover and deny Defendant’s Motion. Plaintiff objects to any attempt by Defendant to introduce new evidence in its reply papers, including supplemental declarations, on the grounds that it would constitute an impermissible tactic to deny Plaintiff the required notice and opportunity to respond. Any new evidence that may be provided by Defendant in supplemental declarations should be stricken. See Plenger v. Alza Corp. (1992) 11 Cal. App.4™ 349, 362; see, also, San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316 (a moving party may not rely on additional evidence filed with its PLAINTIFFS OPPOSITION TO DEFENDANT’S MOTION TO COMPEL ARBITRATION - 4 OO 0 N N L L BA W N = ND ND N N N N N N N m E e m e m e m e m e m e m e m c o N N Un BR A W I N D = D 0 0 N D R E W I N D = Oo reply papers.) Consequently, based on a lack of admissible evidence establishing an enforceable agreement to arbitrate disputes between the Parties, Defendant’s Motion should be denied. C. DEFENDANT’S PURPORTED ARBITRATION AGREEMENT IS UNENFORCEABLE BECAUSE IT IS UNCONSCIONABLE AS A MATTER OF LAW It is the Court’s duty to determine whether the Arbitration Agreement at issue is unenforceable, using the same governing principles of California that exist for enforcing other contracts. See Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4™ 83; see, also, Code of CivilProcedure § 1281.2. An arbitration agreement, like any other contract, is unenforceable where it is unconscionable. See Civil Code § 1670.5 (Court may refuse to enforce a contract which is unconscionable). Unconscionability consists of both a procedural and a substantive aspect. A contract may be found to be procedurally unconscionable where it was a contract of adhesion (Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4"™ 83, 114), or where there was “an absence of meaningful choice due to the inequality of bargaining power or hidden terms.” McCoy v. Superior Court (2001) 87 Cal. App.4™ 354, 358. A contract may be substantively unconscionable where the terms are overly harsh, one-sided, or the agreement was not within the reasonable expectations of the employee. Armendariz, 24 Cal. App.4™ at 114. “The two elements work together in a sliding scale relationship. 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.” McCoy, 87 Cal.4™ at 358; Armendariz, 24 Cal. 4™ at 114. The arbitration provisions at issue are unenforceable because they are both procedurally and substantively unconscionable. 1. Procedural Unconscionability. Giving an employee a form adhesion arbitration agreement and requiring him to sign it as a condition of employment is sufficient for procedural unconscionability. McCoy, 87 Cal. App.4™ at 357-358. Similarly, when there is no realistic opportunity for an employee to negotiate regarding the terms of an arbitration agreement, it may be procedurally unconscionable, even if the employee is an executive, making a significant amount of money. Stirlen v. Supercuts, Inc. (1997) 51 Cal. App.4™ 1519, 1532-1533. PLAINTIFFS OPPOSITION TO DEFENDANT'S MOTION TO COMPEL ARBITRATION - 5 OO 0 N N L L BA W N = ND ND N N N N N N N m E e m e m e m e m e m e m e m c o N N Un BR A W I N D = D 0 0 N D R E W I N D = Oo Here, the alleged Arbitration Agreement does not include the right to “opt out.” Moreover, there is no evidence showing that Plaintiff negotiated or discussed the arbitration provision with anybody on behalf of Defendant, let alone had an opportunity to negotiate regarding the purported arbitration provision. Plaintiff was forced to sign the Arbitration Agreement and was told that his employment would be terminated if he did not sign the Arbitration Agreement. Consequently, Defendant’s purported arbitration provision is procedurally unconscionable. 2. Substantive Unconscionability. Substantive unconscionability is present when the terms of an agreement are not within the reasonable expectations of the employee or are unduly oppressive, or when the contract allocates the risks of the agreement in an unreasonable or unexpected manner. Armendariz, 24 Cal.4th at 117-118. It is well-settled that an employee’s decision to work or remain on the job does not create an inference of assent to particular terms unless the employee knew of those terms. Banner Entertainment Inc. v. Superior Court (1998) 62 Cal. App.4™ 343, 358-359. The Arbitration Agreement is substantively unconscionable for numerous reasons. First, the arbitration agreement prohibits Plaintiff from seeking a claim under the California Labor Code Private Attorney General Act of 2004 (“PAGA”) (Labor Code §§2698, ef seq.). As the California Supreme Court held in Iskanian v. CLS Tranpsortation Los Angeles, LLC (2014) 59 Cal. 4th 348, 384 that an employee’s right to assert a PAGA claim is unenforceable. Further, the one-way agreement is supported by the fact that Defendant did not even have a representative sign the arbitration agreement. In addition, there are no cognizable employment claims that Defendant can have against the Plaintiff that can be brought in arbitration. Finally, the arbitration agreement contains a vague and unenforceable 2 way fee provision that cannot be contained in an employment arbitration agreement. [“If, however, any party prevails on a statutory claim that affords the prevailing party attorneys' fees and costs, then the arbitrator may award reasonable attorneys' fees and costs to the prevailing party”’] Thus, the unconscionable terms invalidate the Arbitration Agreement. III. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests that Defendant’s Motion to Compel Arbitration be denied. PLAINTIFFS OPPOSITION TO DEFENDANT'S MOTION TO COMPEL ARBITRATION - 6 OO 0 N N L L BA W N = DN ND ND N N N N N N R m Em em em e m e m e m e m c o NI O N wn kr W O N D = DO 0 N N N R E W N = O Dated: February 28, 2019 LAW OFFICES OF CHOI & ASSOCIATES Edward W. Choi, Esq. Attorney for Plaintiff MICHAEL SILVA PLAINTIFFS OPPOSITION TO DEFENDANT'S MOTION TO COMPEL ARBITRATION - 7 PROOF OF SERVICE I'am employed in the County of Los Angeles; I am over the age of 18 years and not a party to the within action; my business address is 515 S. Figueroa St. Suite 1250, Los Angeles, California 90071. On February 28, 2019, I served the foregoing document(s) described as: PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO COMPEL ARBITRATION, on the interested parties in this action by placing a true copy thereof, in a sealed envelope(s) addressed as follows: Martin L. Pitha Cheryl A. Canty Lillis Pitha LLP 4100 MacArthur Blvd. Suite 150 2 Park Plaza, Suite 480 Newport Beach, CA 92660 Irvine, CA 92614 _X BY PRIORITY MAIL -1 DAY SERVICE _X_ As follows: Iam “readily familiar” with the practice of Choi & Associates, Attorneys at Law for collection and processing of correspondence for mailing with the United States Postal Service and that correspondence placed in the outgoing mail tray in my office for collection would be deposited in the United States Mail that same day in the ordinary course of business. BY PERSONAL SERVICE I caused such envelope to be delivered by hand to the offices of the addressee. BY FACSIMILE TRANSMISSION I caused a true and complete copy of the document(s) described above to be transmitted by facsimile transmission to the telephone number(s) of the person(s) set forth above. __X__ (State) I declare under penalty of perjury that the foregoing is true and correct. (Federal) I declare under penalty of perjury that the foregoing is true and correct, and that I am employed in the office of a member of the bar of this Court at whose direction the service was made. Executed on February 28, 2019, at Los Angeles, California. Cina Kim PROOF OF SERVICE