Memorandum Points and AuthoritiesCal. Super. - 6th Dist.July 22, 2020QONUI-bUJN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mark S. Askanas (State Bar No. 122745) Electronically Filed Yuki Cruse (State Bar No. 310073) by superior court of CA, JACKSONLEWIS P'C' County of Santa Clara, 50 Callfornla Street, 9th Floor on 11/20/2020 1_1 3 PM San Francisco, California 941 1 1-4615 . _ ' Telephone: (415) 394-9400 ReV'ewed By- M V" Facsimile: (415) 394-9401 Case #20CV368533 E-mail: Mark.askanaséfliacksonlewiscom Envelope: 5338890 E-mail: Yuki.cruse@iacksonlewis.com Attorneys for Defendants IDEC CORPORATION, RAJIV SALHOTRA, AMRAM ALAM SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA NOUSHIN MOGHBEL, Case N0. 20CV368533 Plaintiff, DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN V. SUPPORT OF MOTION TO COMPEL ARBITRATION IDEC CORPORATION, RAJIV SALHOTRA, AMRAM ALAM and DOES 1-50, inclusive. Date: January 19, 2021 Time: 9:00 am. Defendants. Dept: Judge: Complaint Filed: 07/22/2020 Trial Date: None Set. /// /// /// /// /// /// /// /// /// Defendants’ MPA ISO Motion to Compel Arbitration Case No. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page INTRODUCTION ........................................................................................................................... 1 STATEMENT OF FACTS .............................................................................................................. 1 I. Plaintiff Entered into An Arbitration Agreement That Applies t0 The Employment Claims She Asserts Against Defendants. ........................................... 1 II. The Arbitration Agreement Outlines the Procedure for Arbitration. ....................... 2 III. Plaintiff Did Not Opt-Out 0f the Arbitration Agreement, Despite the Option t0 Do So. ...................................................................................................... 3 IV. Plaintiff Breached the Arbitration Agreement by Filing the Present Action. .......... 3 LEGAL ARGUMENT ..................................................................................................................... 4 I. The Federal Arbitration Act and Its Policy Favoring Arbitration Governs Plaintiff s Arbitration Agreement. ........................................................................... 4 II. The FAA Requires Plaintiff’s Employment Claims to be Submitted to Arbitration. ............................................................................................................... 5 III. The Arbitration Agreement Applies t0 A11 Defendants. .......................................... 6 IV. The Arbitration Agreement Is Not Unconscionable. ............................................... 7 A. The Arbitration Agreement is Not Procedurally Unconscionable. .............. 8 B. The Arbitration Agreement Is Not Substantively Unconscionable ............ 10 C. T0 the Extent the Arbitration Agreement Contains Any Unconscionable Provisions, The Court Should Sever the Offending Terms .......................................................................................................... 12 V. Plaintiff Assented t0 the Terms of Arbitration Agreement. ................................... 12 CONCLUSION .............................................................................................................................. 13 ii Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Cases Asfaw v. Lowe ’S HIW, Inc. (CD. Cal. 2014) 2014 U.S. Dist. LEXIS 68657 ....................................................................... 8 Asmus v. Pacific Bell (2000) 23 Cal. 4th 1 .................................................................................................................. 8 AT&TMobilily LLC v. Concepcion (201 1) 563 U.S. 333 .............................................................................................................. 4, 5 Boucher v. Alliance Title C0,, Inc. (2005) 127 Cal. App. 4th 262 ................................................................................................... 7 Chiron Corp. v. Ortho Diagnostic Systems (9th Cir. 2000) 207 F.3d 1126 ................................................................................................... 6 Circuit City Stores, Inc. v. Adams (2001) 532 U.S. 105 .................................................................................................................. 5 Conyer v. Hula Media Services, LLC (2020) 53 Cal.App.5th 1189 ............................................................................................. 12, 13 Dean Witter Reynolds v. Byrd (1985) 470 U.S. 213 .............................................................................................................. 4, 6 Diaz v. Sohnen Enterprises (2019) 34 Ca1.App.5th 126.Under ............................................................................................ 9 Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406 ............................................................................................................ 6, 7 Farrar v. Direct Commerce, Inc. (2017) 9 Cal. App. 5th 1257 ................................................................................................... 12 Garcia v. Plexco, LLC (2017) 11 Cal. App. 5th 782 ..................................................................................................... 7 Mission Viejo Emergency Medical Ass ’n v. Beta Healthcare Group (201 1) 197 Cal. App. 4th 1146 ................................................................................................. 5 Moncharsh v. Heily & Blase (1992) 3 Cal. 4th 1 .................................................................................................................... 5 Moses Hospital Cone Mem. Hospital v. Mercury Construction Corp. (1983) 460 U.S. 1 ...................................................................................................................... 5 iii Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 ’Hare v. Municipal Resource Consultants (2003) 107 Cal. App. 4th 267 ................................................................................................. 12 Pinnacle Museum Tower ASS ’n v. Pinnacle Mkt. Dev. (2012) 55 Cal. 4th 223 .............................................................................................................. 8 Serpa v. California Surely Investigations, Inc. (2013) 215 Cal. App. 4th 695 ......................................................................................... 5, 8, 10 Southland Corp. v. Keating (1984) 465 U.S. 1 ...................................................................................................................... 5 Thomas v. Westlake (2012) 204 Ca1.App.4th 605 ................................................................................................. 6, 7 Statutes 9 U.S.C. § 2 ................................................................................................................................. 4, 5 9 U.S.C. § 3 ..................................................................................................................................... 6 Cal. Lab. Code § 1102.5 .................................................................................................................. 4 California Arbitration Act ............................................................................................................... 5 California Business and Professions Code §§ 17200 et seq. .......................................................... 4 Federal Arbitration Act ..................................................................................................... 4, 5, 6, 13 Govt. Code § 12940(h) .................................................................................................................... 4 Govt. Code § 12940(k) .................................................................................................................... 4 iV Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 INTRODUCTION Plaintiff Noushin Moghbel (“Plaintiff’)’s employment claims belong in arbitration and not before this Court in a civil action. Plaintiff signed a valid and enforceable arbitration agreement Where she agreed t0 arbitrate any claim arising out 0f 01' related to her employment With Defendants. The agreement is valid, enforceable, and applicable to the employment claims asserted in this case. Accordingly, Defendants IDEC Corporation (“IDEC”), Rajiv Salhotra, Amram Alam (collectively referred to as “Defendants”) respectfully request that this Court enforce the arbitration agreement according t0 its terms by ordering Plaintiff’s employment claims to arbitration. STATEMENT OF FACTS I. Plaintiff Entered into An Arbitration Agreement That Applies t0 The Employment Claims She Asserts Against Defendants. As alleged in Plaintiffs Complaint, Plaintiff is a former employee 0f IDEC. By her own admission, her employment spanned over 23 years at IDEC. (See Plaintiff’s Complaint (“‘Pl. Comp”) at 1] 8.) For significant portions 0f Plaintiff’s employment, she was a Customer Service Supervisor. (See Declaration of Ed Moran (“Moran Dec.”) at 11 2.) In April 2014, IDEC implemented new employment policies for all employees, including an arbitration agreement. (See Moran Dec. at 1] 3.) Specifically, IDEC provided employees, including Plaintiff, with these new employment policies, including the arbitration agreement, 0n or around April 2014. (Id. at 1] 5, EX. A.) IDEC provided employees 30 days t0 review and respond to the arbitration agreement. Plaintiff executed and returned a signed Acknowledgement Form agreeing t0 the terms 0f the arbitration agreement (the “Arbitration Agreement”) 0n April 10, 2014. (Id. at 1N 6-7, EX. B.) The Arbitration Agreement was incorporated in the updated employee handbook under an all caps, bolded, and underlined section heading titled “DISPUTE RESOLUTION POLICY.” (Id. at 11 9, EX. A.) The Arbitration Agreement clearly and conspicuously provided that the agreement “applies to any dispute arising out of or related t0 Employee’s employment 1 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 With IDEC Corp 0r one of its affiliates, subsidiaries 0r parent companies (“Company”) 0r termination 0f employment.” (Id. at fl 10, EX. A.) The Agreement goes 0n t0 provide that it is “intended t0 apply t0 the resolution of disputes that otherwise would be resolved in a court 0f law, and therefore, this Policy requires all such disputes t0 be resolved only by an arbitrator through final and binding arbitration and not by way of court 0r jury trial.” (Id. at fl 11, EX. A.) Plaintiff was fully aware that she was signing an Arbitration Agreement. Plaintiff was a management-level employee 0f IDEC and thus, it is reasonable to assume that, based 0n her experience, she would review and understand the employment policies provided to her. Moreover, based 0n her experience-level, Plaintiff would know t0 speak with Human Resources if she did not understand the provisions in the Arbitration Agreement. (See Moran Dec. 1] 12.) II. The Arbitration Agreement Outlines the Procedure for Arbitration. In terms of procedure, the Arbitration Agreement provides that a neutral arbitrator shall be selected by mutual agreement of the parties. The location of the arbitration proceeding shall be in the general geographical Vicinity of the place Where the employee last worked for the Company, unless each party to the arbitration agrees in writing otherwise. If, for any reason, the parties cannot agree t0 an arbitrator, either party may apply t0 a court for appointment of a neutral arbitrator. The court shall then appoint an arbitrator, Who shall act under the Arbitration Agreement with the same force and effect as if the parties had selected the arbitrator by mutual agreement. The Arbitration Agreement goes 0n t0 provide that a demand for arbitration must be in writing and delivered to the other party Within the applicable statute of limitations period. Any demand for arbitration made to IDEC shall be provided to IDEC’s Human Resources Department. The Arbitrator shall resolve all disputes regarding the timeliness 0r propriety 0f the demand for arbitration. In arbitration, the parties Will have the right t0 conduct civil discovery and bring motions, as provided by the forum state’s procedural rules. The Arbitration Agreement provides that each party Will pay the fees for his, her 0r its own attorneys, subj ect to any remedies t0 which that party may later be entitled under applicable law. However, in all cases Where required by law, the Arbitration Agreement provides that 2 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IDEC Will pay the Arbitrator’s and arbitration fees. The Arbitration Agreement provides that Within 3O days of the close 0f the arbitration hearing, any party will have the right to prepare, serve and file With the Arbitrator a brief. The Arbitrator may award any party any remedy t0 Which that party is entitled under applicable law, but such remedies shall be limited to those that would be available t0 a party in a court 0f law for the claims presented to and decided by the Arbitrator. The Arbitrator Will issue a decision 0r award in writing, stating the essential findings 0f fact and conclusions 0f law. Except as may be permitted or required by law, neither a party nor an Arbitrator may disclose the existence, content, 0r results 0f any arbitration without the prior written consent 0f all parties. The Arbitration Agreement also provides that a court 0f competent jurisdiction shall have the authority to enter a judgment upon the award made pursuant t0 the arbitration. III. Plaintiff Did Not Opt-Out 0f the Arbitration Agreement, Despite the Option t0 D0 So. The Arbitration Agreement also allowed employees to opt-out of the arbitration process and not be subject to the Arbitration Agreement by submitting a “signed and dated statement 0n a ‘Dispute Resolution Policy Opt Out’ form” t0 IDEC’S Human Resources Department Within 30 days of the employee’s receipt of the Arbitration Agreement. (Moran Dec. at 1] 13, Ex. A.) The Arbitration Agreement provided that should employees not opt out of the Arbitration Agreement Within 30 days of their receipt of the Arbitration Agreement, that by continuing their employment with IDEC “constitutes acceptance 0f the terms” 0f the Agreement. (Id. at 1] 14, EX. A.) Plaintiff did not submit an Opt Out form 0r otherwise request that she did not want to be subjected t0 the Arbitration Agreement. (Id. at 1] 15, EX. A.) IV. Plaintiff Breached the Arbitration Agreement by Filing the Present Action. Despite the Arbitration Agreement, Plaintiff filed a Complaint against Defendants in the Superior Court of California, Santa Clara County, 0n July 22, 2020. In her Complaint, Plaintiff asserts sixteen causes 0f action all of which concern employment claims: (1) Failure to Pay Overtime; (2) Failure to Permit and Provide Meal Period; (3) Failure to Permit and Provide Rest Breaks; (4) Failure t0 Provide Accurate/Itemized Wage Statements; (5) Waiting Time Penalties; 3 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (6) Unfair Competition in Violation 0f California Business and Professions Code §§ 17200 et seq.; (7) Retaliation in Violation of Cal. Lab. Code § 1102.5; (8) Retaliation in Violation of Govt. Code § 12940(h); (9) Sex Discrimination; (10) Sex Harassment; (11) Failure t0 Take A11 Reasonable Steps t0 Prevent Sexual Harassment in Violation 0f Govt. Code § 12940(k); (12) Physical Disability Discrimination; (13) Race and National Origin Discrimination; (14) Negligent Hiring, Supervision 0r Retention; and (15) Wrongful Termination in Violation 0f Public Policy; and (16) Intentional Infliction 0f Emotional Distress. Defendants met and conferred With Plaintiffs counsel 0n August 31, 2020 and September 4, 2020 t0 determine if Plaintiff would dismiss her state court action in light 0f the Arbitration Agreement. (See Cruse Decl. at 1] 2, EXS. A, B.) Defendants emphasized to Plaintiff’s counsel that the Arbitration Agreement executed by Plaintiff is enforceable and encompasses Plaintiff’s employment claims. (Id. at 1] 3.) Defendants produced a copy 0f the signed and enforceable Arbitration Agreement. However, on September 11, 2020, Plaintiff’s counsel responded that they disagreed that Plaintiff assented t0 the Arbitration Agreement and provided that Plaintiff would not dismiss the underlying civil action. (Id. at fl 4.) LEGAL ARGUMENT I. The Federal Arbitration Act and Its Policy Favoring Arbitration Governs Plaintiff’s Arbitration Agreement. Plaintiff’s Arbitration Agreement is governed by the Federal Arbitration Act (“FAA”), which ensures enforcement of arbitration agreements. (See AT&T Mobility LLC v. Concepcion (201 1) 563 U.S. 333, 344.) It provides that agreements to resolve disputes through arbitration “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law 01' in equity for the revocation of any contract.” (9 U.S.C. § 2 (emphasis added); Dean Witter Reynolds v. Byrd (1985) 470 U.S. 213, 218 (“By its terms, the [FAA] . . . mandates that . . . the parties . . . proceed t0 arbitration 0n issues as t0 Which an arbitration agreement has been signed”) (emphasis added.» By enacting the FAA, Congress placed arbitration agreements on equal footing with other contracts and declared a strong national policy favoring arbitration. (See Concepcion, 563 U.S. 4 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 at 339; Southland Corp. v. Keating (1984) 465 U.S. 1, 10.) Consequently, courts liberally compel arbitration under the FAA. (See Moses Hospital Cone Mem. Hospital v. Mercury Construction Corp. (1983) 460 U.S. 1, 24.) Any doubt concerning the scope 0f arbitrable issues is resolved in favor 0f arbitration, “Whether the problem at hand is the construction 0f the language itself or an allegation 0f waiver, delay, 0r like defense to arbitrability.” (Id. at 24-25.) Further, to the extent that any state law or rule “stands as an obstacle” t0 the core purpose 0r objective 0f the FAA, it is preempted by the FAA. (Concepcion, 563 U.S. at 352.) To fall within the purview 0f the FAA, a contract must evidence a transaction “involving commerce.” (9 U.S.C. § 2.) To meet this standard, a party t0 an arbitration agreement need only show that it buys products 0r sells goods 0r services in the stream 0f interstate commerce. (See Circuit City Stores, Inc. v. Adams (2001) 532 U.S. 105, 109-18; Serpa v. California Surely Investigations, Inc. (2013) 215 Cal. App. 4th 695, 702 n3.) IDEC is a manufacturer 0f automation and control products and engages in business throughout the United States and internationally. (Moran Dec. at 11 16.) IDEC has an office in California, as well as offices in Canada, Australia, and throughout the Asia Pacific. (Moran Dec. at 1] 17.) IDEC provide a variety 0f products and solutions to customers 0n a global scale in a broad range 0f industries. (Moran Dec. at 11 18.) As such, Defendants clearly engage in interstate commerce and are subj ect t0 the FAA.1 II. The FAA Requires Plaintiff’s Employment Claims t0 be Submitted t0 Arbitration. There can be n0 dispute that an arbitration agreement exists between Plaintiff and Defendants that encompasses all 0f Plaintiffs employment claims. Defendants have provided this Court With a copy of the Arbitration Agreement, Which manifests the essential elements 0f a valid, enforceable contract. (See Mission Viejo Emergency Medical Ass’n v. Beta Healthcare Group (2011) 197 Cal. App. 4th 1146, 1153-54 (explaining that a party seeking t0 compel 1 It should be noted that even if the FAA does not apply, the parties’ arbitration agreement should still be liberally construed and enforced pursuant to the California Arbitration Act (“CAA”), Cal. Code Civil Proc. § 1280, et seq. The California Supreme Court has explained that this mandatory language reflects California’s strong policy in favor of arbitration and that courts should therefore “indulge every intendment” t0 give effect t0 arbitration. (Moncharsh v. Heily & Blase (1992) 3 Cal. 4th 1, 9.) 5 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 arbitration makes a prima facie showing 0f a valid arbitration agreement by offering a copy 0f the agreement.)) The Arbitration Agreement was presented t0 all employees in April 2014, which was included Within an updated employee handbook. (Moran Dec. at 11 3.) The Arbitration Agreement specifically states it applies t0 “any dispute arising out 0f or related to Employee’s employment with IDEC or termination of employment.” (Id. at fl 10, EX. A.) Based 0n the express terms 0f the Arbitration Agreement, each of Plaintiff’s claims are arbitrable as they all arise from or relate to her employment and the termination 0f her employment. The Court’s role in applying the FAA is limited in that it simply determines: “(1) whether a valid agreement t0 arbitrate exists and, if it does; (2) whether the agreement encompasses the dispute at issue.” (Chiron Corp. v. Ortho Diagnostic Systems (9th Cir. 2000) 207 F.3d 1126, 1130.) “If the response is affirmative 0n both counts, the [FAA] requires the court t0 enforce the arbitration in accordance With its terms.” (1d,) (emphasis added.) The FAA leaves n0 room for discretion. (See Dean Witter Reynolds, 470 U.S. at 218.) The Court must refer the arbitrable issues t0 arbitration and, upon application of one 0f the parties, “stay the trial 0f the action until such arbitration has been had.” (9 U.S.C. § 3.) III. The Arbitration Agreement Applies t0 All Defendants. Plaintiff’s allegations are sufficient for all Defendants, including individually named Defendants Rajiv Salhotra and Amram Alam, t0 enforce the arbitration agreement between IDEC and Plaintiff. (See Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 418 (held individual defendant football players, though not signatories, were entitled t0 the benefit 0f the arbitration agreement because they were acting as agents for the defendant football team that was a signatory t0 the agreement); Thomas v. Westlake (2012) 204 Ca1.App.4th 605, 614 (citing Dryer, /// /// /// /// /// 6 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 supra, 40 Cal.3d at 418.)2 “[W]hen a plaintiff alleges [that] a defendant acted as an agent of a party t0 an arbitration agreement, the defendant may enforce the agreement even though the defendant is not a party t0 thereto.” (Thomas, 204 Cal.App.4th at 614.) In Thomas, for example, the plaintiff alleged: “At all times relevant herein, Defendants, and each 0f them, acted as an agent 0f each other Defendant in connection with the acts and omissions alleged herein.” (Id) The Court 0f Appeal concluded that because one 0f the defendants entered an arbitration agreement with the plaintiff, the allegation that the defendants acted as agents 0f each other was a sufficient basis for compelling arbitration by all defendants, including non-signatories. (1d,; Dryer v. Los Angeles Rams (1985) 40 Cal. 3d 406, 418 (“If, as the complaint alleges, the individual defendants, though not signatories [t0 the arbitration agreement], were acting as agents for the [signatory defendant], then they are entitled to the benefit of the arbitration provisions.”)) Similarly, Plaintiff alleges that the retaliation by her supervisors - Defendants Rajiv Salhotra and Amram Alam - were done in their position as agents of IDEC. (See P1. Comp. 11 212 (Defendants through its agents retaliated against Plaintiff); P1. Comp. 1] 12 (Plaintiff’s supervisors, managers, and/or other employees 0f Defendants were ratified by Defendants.» Thus, IDEC may enforce the agreement as t0 Plaintiff’s claims against Mr. Salhotra and Mr. Alam even though they are not signatories to the Arbitration Agreement. IV. The Arbitration Agreement Is Not Unconscionable. Notwithstanding the FAA’S mandate that Plaintiff’s employment claims be submitted t0 arbitration, Plaintiff may argue that the Arbitration Agreement is unconscionable and thus 2 Similarly, Plaintiff’s claims against all Defendants are covered under the doctrine 0f equitable estoppel, “a nonsignatory defendant may invoke an arbitration clause t0 compel a signatory plaintiff to arbitrate [his or her] claims when the causes of action against the nonsignatory are intimately founded in and intertwined with the underlying contract obligations.” (Boucher v. Alliance Title C0,, Inc. (2005) 127 Cal. App. 4th 262, 271 (internal quotation marks omitted); Garcia v. Plexco, LLC (2017) 11 Cal. App. 5th 782, 787 (the doctrine of equitable estoppel compelled enforcement 0f the arbitration agreement-despite the fact that defendant was not a signatory to the arbitration agreement-because all 0f the claims against defendant were “intimately founded in and intertwined with his employment relationship with his employer, Which [was] governed by the employment agreement compelling arbitration”) As such, Plaintiff’s employment claims against all Defendants are intimately founded in and intertwined with her employment relationship With IDEC, which is governed by an arbitration agreement. 7 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 unenforceable. The Court should rej ect this argument as well. The party seeking to invalidate a contract based 0n unconscionability carries the burden 0f proving by a preponderance 0f the evidence that the contract in dispute is both procedurally and substantively unconscionable. (Pinnacle Museum Tower Ass ’n v. Pinnacle Mkt. Dev. (2012) 55 Cal. 4th 223, 246.) Procedural unconscionability “addresses the circumstances 0f contract negotiation and formation, focusing on oppression or surprise due t0 unequal bargaining power.” (Id) Substantive unconscionability, in contrast, addresses the actual terms 0f the contract. The focus is 0n Whether the terms are overly harsh or so one-sided that it shocks the conscience. (Id.) Although both procedural and substantive unconscionability must exist for a contract t0 be invalidated 0n the basis of unconscionability, they d0 not need t0 exist in the same degree. (Serpa, 215 Cal. App. 4th at 703.) “[T]he more substantively oppressive the contract term, the less evidence 0f procedural unconscionability [that] is required . . . and Vice versa.” (Id. (citations 0mitted.)) Here, Plaintiff cannot show that the Arbitration Agreement should be invalidated based 0n unconscionability. As explained below, Plaintiff cannot establish the necessary quantum 0f both procedural and substantive unconscionability. A. The Arbitration Agreement is Not Procedurally Unconscionable. Plaintiff may posit that the Arbitration Agreement is procedurally unconscionable because it was presented to Plaintiff as a mandatory condition of employment. However, even if this were true, this is “not dispositive” where, as here, there is n0 proof that the employee was in any way surprised or under duress when signing the agreement. (Serpa, 215 Cal. App. 4th at 704; Dotson, 181 Cal. App. 4th at 982.) “When, as here, there is no other indication of oppression 0r surprise, ‘the degree 0f procedural unconscionability of an adhesion agreement is 10W, and the agreement Will be enforceable unless the degree of substantive unconscionability is high.’” (Serpa, 215 Cal. App. 4th at 704 (quoting Ajamian v. CantorCO2e, L.P. (2012) 203 Cal. App. 4th 771, 796.» Further, “the availability 0f continuing employment” is adequate consideration from an employer. (See Asmus v. Pacific Bell (2000) 23 Cal. 4th 1, 14-15; Asfaw v. Lowe’s HIW, Inc. (C.D. Cal. 2014) 2014 U.S. Dist. LEXIS 68657, at *3 (“Continued employment constitutes consideration for an agreement to arbitrate.”)) 8 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Arbitration Agreement was provided t0 all employees 0n 0r around April 2014. IDEC and permitted employees, including Plaintiff, t0 review and consider the Agreement for 30 days. (Moran Dec. at W 5-6, EX. A.) Plaintiff executed and returned the Arbitration Agreement 0n April 14, 2010. (Id. at 11 7, Exs. A, B.) Plaintiff was fully aware that she was signing an Arbitration Agreement. Plaintiff was a management-level employee of IDEC and thus, it is reasonable to assume that, based 0n her experience, she would review and understand the employment policies provided t0 her. Moreover, based 0n her experience-level, Plaintiff would know t0 speak With Human Resources if she did not understand the provisions in the Arbitration Agreement. (See Moran Dec. at 11 12.) Notably, the terms of the Arbitration Agreement were clear t0 Plaintiff. The Agreement was included in the Employee Handbook under an all caps, bolded and underlined section titled “DISPUTE RESOLUTION POLICY.” The language 0f the Arbitration Agreement itself was plain and succinct. (Moran Dec. at fl 9, EX. A; see Dotson, 181 Cal. App. 4th at 981 (concluding that the assertion 0f procedural unconscionability was undercut by the fact that the arbitration agreement was not long and was “written in clear, unambiguous 1anguage.”)) The Arbitration Agreement also allowed Plaintiff t0 opt out and not be subject t0 the Agreement by submitting a “signed and dated statement on a ‘Dispute Resolution Policy Opt Out’ form” to IDEC’s Human Resources Department within 30 days 0f the Employee’s receipt 0f the Agreement. (Moran Dec. at 1] 13, EX. A.) Thus, Arbitration Agreement provided that should employees not opt-out of the Arbitration Agreement within 3O days of their receipt of the Agreement, that by continuing their employment with IDEC “constitutes acceptance of the terms” of the Agreement. Plaintiff did not submit an Opt Out Form or otherwise contact Human Resources 0r anyone at IDEC t0 request that she not be subjected to the Arbitration Agreement. (Moran Dec. at 1N 14-16, EXS. A, B.) It is also well settled in California law that “[w]hen an employee continues his 0r her employment after notification that an agreement to arbitration is a condition 0f continued employment, that employee has impliedly consented t0 the arbitration agreement.” Diaz v. Sohnen Enterprises (2019) 34 Cal.App.5th 126.Under these circumstances, courts have consistently held that the procedural unconscionability of a mandatory arbitration 9 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 agreement is “minimal” and should be enforced unless the party challenging the agreement can prove that the degree of substantive unconscionability is particularly “high” (which Plaintiff is unable t0 show here). (See Serpa, 215 Cal. App. 4th at 704; Dotson, 181 Cal. App. 4th at 982.) B. The Arbitration Agreement Is Not Substantively Unconscionable. Plaintiff cannot demonstrate substantive unconscionability, let alone a high degree of substantive unconscionability. In Armendariz v. Foundation Health Psychcare Sevs., Ina, the California Supreme Court identified six factors relevant to substantive unconscionability in the context 0f a mandatory employment arbitration agreement. ((2000) 24 Cal. 4th 83.) The arbitration agreement must: (1) provide a neutral arbitrator; (2) not limit the availability of statutorily imposed remedies; (3) allow adequate discovery; (4) provide a written arbitration award that sets forth the key findings and conclusions; (5) not impose costs 0f a type unique t0 arbitration 0n the employee; and (6) include a modicum 0f bilaterality. (Id. at 103-13, 117-18.) As shown below, the Arbitration Agreement satisfies these conditions and by n0 means contains a high degree 0f substantive unconscionability. 1. Neutral Arbitrator The Arbitration Agreement provides that a “neutral arbitrator” shall be selected by mutual agreement of the parties. If for any reason the parties cannot agree to an arbitrator, either party may apply t0 a court of competent jurisdiction for appointment 0f a neutral arbitrator. The court shall then appoint an arbitrator, Who shall act under the Agreement With the same force and effect as if the parties had selected the arbitrator by mutual agreement. (Moran Dec. at 11 4, EX A.) These procedures satisfy Armendariz’s neutrality requirement. 2. N0 Limitations 0n Statutory Remedies The Arbitration Agreement does not limit the statutory remedies available t0 Plaintiff or Defendants. The Arbitration Agreement provides that it is intended t0 apply t0 the resolution of disputes that otherwise would be resolved in a court 0f law. (Moran Dec. at 1] 4, EX. A.) The Arbitration Agreement also provides that the Arbitrator may award any party any remedy t0 which that party is entitled under applicable law, but such remedies shall be limited t0 those that would be available to a party in a court of law for the claims presented to and decided by the 10 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Arbitrator. (1d,) These aspects satisfy Armendariz’s remedies requirement. 3. Adequate Discovery The Agreement provides that the parties will have the right t0 conduct civil discovery and bring motions, as provided by the forum state’s procedural rules. This provision 0f civil discovery rights satisfies Armendariz. (Moran Dec. at 11 4, EX. A.) 4. Written Arbitration Award The Arbitration Agreement provides that an Arbitrator may award any party any remedy to which that party is entitled under applicable law, but such remedies shall be limited to those that would be available to a party in a court of law for the claims presented to and decided by the Arbitrator. The Arbitrator Will issue a decision 0r award in writing, stating the essential findings of fact and conclusions of law. A court 0f competent jurisdiction shall have the authority to enter a judgment upon the award made pursuant t0 the arbitration. (Moran Dec. at 1] 4, Ex. A.) The Agreement thus satisfies the award requirements ofArmendariz. 5. N0 Costs Unique t0 Arbitration Under Armendariz, the arbitration agreement “cannot generally require the employee t0 bear any type 0f expense that the employee would not be required to bear if he 0r she were free t0 bring the action in court.” (Armendariz, 24 Cal. 4th at 110-11 (emphasis in original.» The general rule is that the employer must bear the arbitration forum costs. (Id. at 113.) The Arbitration Agreement is consistent With Armendariz, because it requires that IDEC will pay the Arbitrator’s and arbitration fees in all cases Where required by law. (Moran Dec. at 11 4, EX. A.) As such, Armendariz is satisfied here. 6. Modicum 0fBilatemlity The Arbitration Agreement provides that both parties are equally required to submit disputes pertaining t0 Plaintiff’s employment t0 arbitration. The language 0f this Arbitration Agreement is mutual. As such, this Arbitration Agreement satisfies the “modicum 0f bilaterality” factor in Armendariz. 11 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. T0 the Extent the Arbitration Agreement Contains Any Unconscionable Provisions, The Court Should Sever the Offending Terms. Further, assuming arguendo that the Arbitration Agreement contains any unconscionable provisions, the Court should sever the offending terms. The Court of Appeals has held that severance should only be denied if the: (1) “arbitration provision is ‘permeated’ by unconscionability and, thus, would have t0 be ‘reformed’ in order t0 eliminate unconscionability” and (2) “severing out the offending carve-out [would] result in an agreement contrary t0 that intended by [the employer].” (Farrar v. Direct Commerce, Inc. (2017) 9 Cal. App. 5th 1257, 1275; see e.g., O’Hare v. Municipal Resource Consultants (2003) 107 Cal. App. 4th 267, 271 (incurable unconscionability found when (1) the agreement lacked any modicum of bilaterality, (2) the agreement also improperly required plaintiff t0 share costs for arbitration, and (3) the agreement prohibited discovery). Here, the Arbitration Agreement is far from permeated by unconscionability. But to the extent the Court finds there are any unconscionable provisions, the issue is readily remedied by severing out the alleged unconscionable provision. (Farrar, 9 Cal.App.5th at 1275.) V. Plaintiff Assented t0 the Terms 0f Arbitration Agreement. Plaintiff may try t0 argue that she did not assent t0 the terms of the Arbitration Agreement either because she did not read the Employee Handbook that contained Defendant’s Arbitration policy, she did not understand the terms of the Arbitration Agreement, 0r something else. But Plaintiff’s reasons d0 not change the fact that she is bound by the Arbitration Agreement. See Conyer v. Hula Media Services, LLC (2020) 53 Cal.App.5th 1189. In Conyer, the court held an employee assented t0 an arbitration agreement contained in the employer’s updated employee handbook because the employee signed separate acknowledgment form that provided that the employee agreed t0 be bound by the terms in the employee handbook. (Id) The employee argued that he did not assent to the arbitration policy contained in an updated employee handbook because he was not informed that the handbook had been revised t0 include a new arbitration policy. However, the court held that the employee’s signed “Receipt and Acknowledgment” form was a contract binding him to the arbitration policy 12 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and the employer had n0 duty t0 call the arbitration agreement t0 the employee's attention. (Conyer, 53 Ca1.App.5th at 1192.) Here, Plaintiff signed a document titled “Agreement and Acknowledgment of Receipt of Employee Handbook” that included a provision that states “I hereby acknowledge receipt 0f the Employee Handbook for IDEC Corp. I have thoroughly read and understand the Company policy and rules set forth in the Employee Handbook 0f IDEC Corp and agree t0 abide by them.” (Moran Dec. 11 7, EX. B.) The document also contains a section titled “Acknowledgement 0f Receipt 0f Dispute Resolution Policy” that goes 0n to provide, “This is to confirm that I have received a copy 0f the IDEC Corp Dispute Resolution Policy included in the Company employee handbook.” (Moran Dec. at 11 8, EX. B.) Plaintiff’s signature 0f this document shows a clear assent to the terms 0f the Arbitration Agreement. This is true even if she did not read the Employee Handbook beforehand. (Conyer, 53 Cal.App.5th at 1197 (“A party is bound by a contract even if he 0r she did not read the contract before signing it. That rule applies t0 all contracts, including arbitration agreements.”) If Plaintiff had questions about the language in Arbitration Agreement 0r the Acknowledgment Form that she signed, she had 30 days t0 ask questions t0 Human Resources Manager Ed Moran. (Moran Dec. 11 6.) But Plaintiff did not raise any questions and instead, returned a signed Acknowledgment Form agreeing to the terms of the Arbitration Agreement. (Moran Dec. 11 7, EX. B.) “A party cannot use his or her own lack 0f diligence t0 avoid an arbitration agreement.” (Conyer, 53 Cal.App.5th at 1197.) CONCLUSION Plaintiff entered into a valid and enforceable arbitration agreement that encompasses the employment claims asserted against Defendants in this action. The FAA requires enforcement 0f this agreement according t0 its terms, as well as severing and staying claims that are not subject t0 its terms. Accordingly, Defendants respectfully request that the Court compel arbitration of Plaintiff’s employment claims and sever and stay Plaintiff’s “inarbitrable” corporate/shareholder claims pending the outcome of arbitration. /// 13 Defendants’ MPA ISO Motion t0 Compel Arbitration Case N0. 20CV368533 QONUI-bUJN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: November 20, 2020 By' 4847-4542-1517, V. 4 14 JACKSON LEWIS P.C. _- l../‘-‘\ Mark . A ,kanas Yuki e Attorneys for Defendant IDEC CORPORATION Defendants’ MPA ISO Motion to Compel Arbitration Case N0. 20CV368533