Edward Carlos, II et al vs Restoration Hardware, Inc. et al

By its terms, the Agreement broadly covers any dispute arising out of or relating to the plaintiff’s employment, including statutory claims and claims against affiliates and alleged joint employers. The Agreement is governed by the Federal Arbitration Act and calls for arbitration before JAMS by a retired California Superior Court judge near where the plaintiff worked. It also requires a written and reasoned award and requires the Company to pay the arbitrator’s fees and costs. The Agreement also contains a class-action waiver, a representative-action waiver that applies “[t]o the extent allowable under applicable law,” and a severability clause.

II.

Legal Standard

On a motion to compel arbitration, the moving party bears the burden proving the existence of a valid arbitration agreement by a preponderance of the evidence. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972; Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle).)

The court treats an arbitration agreement as any other contract when deciding whether an agreement was informed or is enforceable. (Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 583 [“court should apply the same procedural rules that they apply to any other contract”].)

The moving party may meet its initial burden by attaching a copy of the purported agreement, and if the signature is challenged, the moving party must authenticate it; a declarant’s failure to recall signing does not by itself create a triable dispute. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1059–1061; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218–219.)

III.

Discussion

A. Existence of a Valid Agreement to Arbitrate

Plaintiff first argues that no valid arbitration agreement exists because the document refers to the employer only as “the Company” and does not name any of the Defendants. (Opposition, pp. 5:5–6:24.) The Court is not persuaded. California law requires only that the parties be reasonably identifiable, not that each corporate entity be listed by full legal name. (Oberstein v. Live Nation Entertainment, Inc. (9th Cir. 2023) 60 F.4th 505, 510–511; Civ. Code, § 1558.) Here the identification is plain because the agreement bears the RH mark and was signed by an RH officer, it was delivered through RH’s onboarding portal for Plaintiff’s RH employment, notice under the agreement runs to RH’s legal department at the Restoration Hardware corporate address, and Plaintiff’s own offer letter defines “the Company” as Restoration Hardware, Inc. and its affiliates.

Plaintiff points to Flores v. Nature’s Best Distribution, LLC (2016) 7 Cal.App.5th 1 (Flores) in arguing that the arbitration clause is ambiguous and thus invalid. Flores is distinguishable because, there, the employer left the signature line blank and nothing in the record identified the contracting company. (Id. at p. 9.) The rule that an agreement is construed against the drafter does not change the result in this case because that rule applies only when ambiguity remains after the ordinary rules of interpretation are applied, and the Court finds little if any ambiguity here. (Civ. Code, §§ 1643, 1654.)

Plaintiff further asserts that he never saw the arbitration agreement, never saw a button to open it, and does not recall signing it. (Plaintiff’s Decl., ¶¶ 6–8.) Nevertheless, the Court finds that the defendants have authenticated the signature. Defendants’ records show that the plaintiff accessed a secure, password-protected portal known only to him, that he completed a separately titled and “Required” task called “Binding Arbitration - CA,” and that he could complete that task only by entering his legal name and email and clicking “Done.” (Tobola Decl., ¶¶ 6–10.)

A party who does not recall signing, or who did not read what they signed, is still bound. (Pinnacle, supra, 55 Cal.4th at p. 236; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 710.) In this case, Plaintiff does not claim forgery or deny that the signature is his. His consumer “sign-in-wrap” authorities are inapposite because this case involves a secure employment portal that presented a discrete, required, and titled arbitration task with an express instruction to view the document before signing. Accordingly, the Court finds that the parties formed a valid agreement to arbitrate.

B. Unconscionability

Plaintiff further argues that the Agreement is unenforceable because it is unconscionable. (Opposition, pp. 6:25–14:24.) Unconscionability has a procedural element and a substantive element, and both must be present, though they are weighed on a sliding scale. (Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114; OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125–130.) Plaintiff bears the burden of establishing both elements, and he has not carried it here.

1. Procedural Unconscionability

Plaintiff’s showing of procedural unconscionability is modest. The Agreement was a mandatory condition of employment presented on a standardized form, so some procedural unconscionability is present because it is an adhesive contract. Nevertheless, a contract of adhesion alone is not enough to establish unconscionability. (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244.)

Plaintiff explains that he completed his onboarding on his personal cell phone, that he was not told he was waiving his rights, and that he did not understand arbitration. (Plaintiff’s Decl., ¶¶ 5, 9–10.) Plaintiff relies upon Hasty v. American Automobile Assn. (2023) 98 Cal.App.5th 1041 (Hasty) in arguing there is a high degree of procedural unconscionability due to the adhesive nature of the Agreement. (Opposition, pp. 1:24–28, 8:10–9:16.) Hasty is distinguishable because it turned on a developed record in which the signature page did not tie the acknowledgment to the arbitration agreement and several terms were independently unlawful. (Hasty, supra, 98 Cal.App.5th at pp. 1058–1063.)

In this case, the arbitration task was separately titled, was marked “Required,” and Defendants’ onboarding portal system instructed Plaintiff to click “View Document” before signing. (Tobola Decl., ¶¶ 6–10.) Accordingly, the Court finds the degree of procedural unconscionability to be modest and not significant.

2. Substantive Unconscionability

Plaintiff’s showing of substantive unconscionability fails to persuade the Court. The plaintiff challenges five terms, and none is unconscionable on this record. (See Opposition, pp. 10:1–14:24; Reply, pp. 10:19–13:12.)

The reference to “harassment” does not make the agreement overbroad, because this case pleads no sexual-harassment or sexual-assault claim, and the federal Ending Forced Arbitration Act is therefore not triggered. The punitive-damages clause bars such an award only “except where permitted by statute,” which preserves rather than waives any statutory remedy.

The fee provision is not one-sided because the arbitrator is expressly empowered to award attorney’s fees and costs to the extent available under law, which preserves the plaintiff’s statutory fee rights and renders Fisher v. MoneyGram International, Inc. (2021) 66 Cal.App.5th 1084, 1106, distinguishable. The 30-day invoice term governs the timing of the employer’s payments and does not shift any arbitration-specific cost onto Plaintiff, whose contribution is capped at the court filing fee.

While Plaintiff’s argument concerning the representative-action waiver may be his strongest, that too fails on this record. (Opposition, pp. 11:17–13:8; Reply, pp. 11:25 – 12:8; Notice of Motion and Motion, p. 2:2–9.) A wholesale, pre-dispute waiver of representative PAGA claims is unenforceable. (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384.) But the waiver here is expressly limited to what is “allowable under applicable law,” the agreement assigns the enforceability question to a court rather than the arbitrator, and the agreement provides that, if the representative waiver is invalid, those claims proceed in court after the arbitrable claims are arbitrated.

Defendants’ motion does not seek to enforce a wholesale PAGA waiver, and the Court does not enforce any such waiver. As such, the provision is not the unlawful blanket waiver condemned in Iskanian, and any surplus language is severable under the agreement’s severability clause and the strong preference for severance. (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 514–518; Santana v. Studebaker Health Care Center, LLC (2026) 120 Cal.App.5th 1, 20.) Accordingly, the Court finds that Plaintiff has failed to show more than a minimal degree of substantive unconscionability, if any. Having shown only a modest degree of procedural unconscionability and a minimal degree of substantive unconscionability, Plaintiff has not met his burden of establishing unconscionability.

C. Scope of Agreement to Arbitrate

Plaintiff’s individual claims fall within the agreement’s broad scope and are compelled to arbitration, and his PAGA cause of action is divisible. The individual PAGA claim is arbitrable and is compelled, and the representative PAGA claim is not waived and remains before this court. (Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639; Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1121 (Adolph).)

The class-action waiver is enforceable, and Plaintiff does not separately contest it, so the putative class claims are dismissed. (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 348–352.) A stay of the representative PAGA claims is appropriate because the arbitration will determine whether the plaintiff is an “aggrieved employee” with standing to pursue the representative claims. (Code Civ. Proc., § 1281.4; Adolph, supra, 14 Cal.5th at pp. 1123–1124.)

The non-employer RH entities may enforce the agreement because the FAC alleges they are joint employers and the claims against them are intertwined with Plaintiff’s employment. (Garcia v. PEXCO, LLC (2017) 11 Cal.App.5th 782, 785–787; Gonzalez v. Nowhere Beverly Hills LLC (2024) 107 Cal.App.5th 111, 122–124.)

IV.

Conclusion

For the reasons stated, the Court GRANTS Defendants’ motion. Plaintiff’s individual claims, including the individual component of the PAGA claim, are compelled to arbitration. The putative class claims are dismissed without prejudice. The non-individual, representative PAGA claims are stayed, and the action is stayed pending the completion of the arbitration.

Case Management Conference at 2:30 p.m. is VACATED. Further Case Management Conference for review pending arbitration is set on February 3, 2027 at 2:30 p.m. The prevailing party shall prepare the order in accordance with California Rules of Court, rule 3.1312.

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