Kylie K. Lum v. Heartflow, Inc.; Vanessa Hobbs; et al.

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Motion of Defendant Heartflow, Inc. To Compel Arbitration And To Stay Proceedings.

I. Introduction. Before the Court is defendants Heartflow, Inc. and Vanessa Hobbs’ motion to compel arbitration and stay proceedings pending arbitration. Pursuant to California Rules of Court, rule 3.1308, this Court issues its tentative ruling as follows:

I. Background. This is an employment discrimination action brought by plaintiff Kylie K. Lum against defendants Heartflow, Inc. (“Heartflow”) and Vanessa Hobbs (“Hobbs”, collectively, “Defendants”.) After taking medical leave to undergo treatment for breast cancer, Plaintiff suffered severe and pervasive harassment and discrimination. Heartflow ultimately terminated Plaintiff’s employment. Plaintiff brings this present action alleging: (1) disability discrimination in violation of the Fair Employment and Housing Act (“FEHA”); (2) hostile work environment harassment in violation of FEHA; (3) retaliation in violation of FEHA; (4) failure to engage in interactive process in violation of FEHA; (5) failure to provide reasonable accommodation in violation of FEHA; (6) retaliation for requesting accommodation in violation of FEHA; (7) failure to prevent harassment in violation of FEHA; (8) violation of CFRA rights; (9) CFRA rights retaliation; (10) whistleblower retaliation; (11) wrongful termination in violation of public policy; and (12) intentional infliction of emotional distress.

Defendants maintain that under the arbitration clause of the Offer Letter, the claims are subject to binding contractual arbitration. Defendants filed the present motion to compel arbitration on November 3, 2025. Plaintiff filed a timely opposition, and Defendants filed a timely reply.

III.

Legal Standard

On Motions to Compel Arbitration. Defendants contend, and Plaintiff does not dispute, that the Federal Arbitration Act (“FAA”) applies in this case. In ruling on a motion to compel arbitration, the Court must inquire as to (1) whether there is a valid agreement to arbitrate, and (2) if so, whether the scope of the agreement covers the claims alleged. (See Howsan v. Dean Witter Reynolds (2002) 537 U.S. 79, 84.) “Under both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate. [Citations.]

The threshold question requires a response because if such an agreement exists, then the court is statutorily required to order the matter to arbitration.” (Fleming v. Oliphant Financial, LLC (2023) 88 Cal.App.5th 13, 19, internal quotation marks omitted.) “In determining the rights of parties to enforce an arbitration agreement within the FAA’s scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle).)

A showing that an arbitration agreement is unconscionable can bar its enforcement. (Diaz v. Sohnen Enterprises (2019) 34 Cal.App.5th 126, 132.) “The doctrine has both a procedural and substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results. Both elements must be present for a court to refuse enforcement.” (Ibid., internal quotation marks and citations omitted.)

IV. Analysis. A. Existence of an Agreement to Arbitrate. Defendants produce an offer letter by Heartflow, dated April 21, 2022 (the “Offer Letter”) to demonstrate the existence of an arbitration agreement. The Offer Letter provides, in relevant part: “As a condition of your employment, you are also required to sign and comply with an At- Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement which requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company, and non-disclosure of Company proprietary information.

In the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that (i) any and all disputes between you and the Company shall be fully and finally resolved by binding arbitration; (ii) you are waiving any and all rights to a jury trial but all court remedies will be available in arbitration; (iii) all disputes shall be resolved by a neutral arbitrator who shall issue a written opinion; (iv) the arbitration shall provide for adequate discovery; and (v) the Company shall pay all but the first $125 of the arbitration fees.

Please note that we must receive your signed At-Will Agreement before your first day of employment.” (Declaration of Stephanie Heller [“Heller Decl.”], Ex. A [“Offer Letter”], p. 2.) Heartflow’s Chief Human Resources Officer, Stephanie Heller, attests that Heartflow sent the Offer Letter with the arbitration provision via DocuSign on April 22, 2022 at 10:13 a.m., and Plaintiff viewed the letter that same day at 10:50 a.m. and signed the letter on April 26, 2022 at 9:45 a.m. (Id. at ¶ 12.) Heller also appends to her declaration an email from Plaintiff confirming that she signed the letter via DocuSign. (Id., Ex.

C.)

In opposition, Plaintiff argues that an agreement to arbitrate does not exist because (1) the Offer Letter required Plaintiff to sign a separate arbitration agreement, the “At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement” (the “At-Will Agreement”); but (2) the At-Will Agreement contains no arbitration clause. Plaintiff further argues that the following “Legal and Equitable Remedies” provision of the At- Will Agreement indicates that there was no written to agreement to arbitration: “8.

LEGAL AND EQUITABLE REMEDIES. Because Employee’s services are personal and unique, and because Employee may have access to and become acquainted with the Confidential Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, and without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.” (Declaration Joubin Hanassab, Ex. A [“At-Will Agreement”], p. 3, emphasis original.)

Defendants further argue that, at most, the At-Will Agreement was incorporated by reference in the Offer Letter because both documents were executed contemporaneously, with the former applying a “narrow provisional remedy for a specific category of claims” and the latter establishing “the forum for covered disputes.” (Reply, p. 5:15- 16.) As pointed out Defendants’ reply, however, Plaintiff’s reliance on the title of the At-Will Agreement is unpersuasive given that the contract must be construed in its entirety rather than by the headings contained therein. (Reply, p. 4:1-2 [quoting Brotherhood Of Railroad Trainmen v.

Baltimore & Ohio Railroad Co. (1947) 331 U.S. 519, 528-5292].) This Court finds it interesting that Defendants long-standing California law has been similar. Civil Code, § 1642 states: “Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.” Civil Code, § 1647 states: “A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates.” "Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together." (Civil Code, § 1642.)

Obviously, the most certain criterion of the completeness of an individual writing will [**948] be found within the writing itself. It is therefore the general rule that two or more separately executed instruments may be considered and construed as one contract only when upon their face they deal with the same subject matter and are by reference to one another so connected that they may be fairly said to be interdependent.” (Merkeley v. Fisk (1919) 179 Cal. 748, 754.)

The Court finds Defendants’ argument persuasive as the Offer Letter concludes, in relevant part: “This letter, along with any agreements relating to proprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews, or pre-employment negotiations, whether written or oral.” (Offer Letter, pp. 2-3.) Given the language of the Offer Letter, and that Plaintiff does not contest that she read and signed the Offer Letter (including the At-Will Agreement), the Court concludes that an arbitration agreement (i.e. the Offer Letter and At-Will Agreement) exists.

2 “But headings and titles are not meant to take the place of the detailed provisions of the text. Nor are they necessarily designed to be a reference guide or a synopsis. Where the text is complicated and prolific, headings and titles can do no more than indicate the provisions in a most general manner; to attempt to refer to each specific provision would often be ungainly as well as useless. As a result, matters in the text which deviate from those falling within the general pattern are frequently unreflected in the headings and titles.

Factors of this type have led to the wise rule that the title of a statute and the heading of a section cannot limit the plain meaning of the text. (citations omitted.) For interpretative purposes, they are of use only when they shed light on some ambiguous word or phrase. They are but tools available for the resolution of a doubt. But they cannot undo or limit that which the text makes plain."

B. Unconscionability. “The general principles of unconscionability are well established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party.” (OTO, LLC v. Kho (2019) 8 Cal.5th 111, 125 (OTO), internal citation omitted.) Unconscionability has both procedural and substantive elements, and both must appear for a court to invalidate a contract or one of its individual terms. (Armendariz v.

Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz).) Courts evaluate unconscionability on a sliding scale: “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” (Ibid.) “The burden of proving unconscionability rests upon the party asserting it.” (OTO, supra, 8 Cal.5th at 126.)

1. Procedural Unconscionability. Plaintiff asserts that the arbitration agreement is unconscionable because the contract was adhesive, and the circumstances of its formation created oppression and surprise. California courts have consistently held that arbitration may be imposed as a condition of employment. (See, e.g., Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244 (Baltazar); Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 981-982.) Courts have acknowledged that the take-it-or-leave-it nature of the agreement may render it adhesive, but without more, only indicates a low level of potential procedural unconscionability that is insufficient to allow the court to find the agreement unenforceable. (See OTO, supra, 8 Cal.5th at p.126.)

The aforementioned “more” is oppression or surprise. (Ibid.) “Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form.” (Pinnacle, supra, 55 Cal.4th at p. 247.)

a. Oppression. Here, Plaintiff first argues that the arbitration agreement is an oppressive contract of adhesion because Plaintiff does not recall (1) being presented with any arbitration terms; or (2) that anyone discussed or explained arbitration to her. (Opposition, p. 9:11-13 [citing Declaration of Kylie K. Lum [“Lum Decl.”], ¶¶ 6-7].) The argument is unpersuasive as “[a]n arbitration clause within a contract may be binding on a party even if the party never actually read the clause.” (Pinnacle, supra, 55 Cal.4th at p. 236.)

Moreover, Plaintiff cites no authority for the proposition that an employer is required to explain to an employee the legal consequences of signing an agreement to arbitrate claims. (See United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 153 (United Grand) [court may disregard conclusory arguments that are not supported by pertinent legal authority or fail to disclose the reasoning by which the appellant reached the conclusions he or she wants us to adopt].) As Defendants point out, an employer has no obligation to highlight or call out an arbitration clause to an employee’s attention. (Reply, p. 5:4-6 [citing Sanchez v.

Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 9143].)

Plaintiff next argues that the absence of an opt-out procedure and failure to provide arbitration rules heightens the oppressive circumstances of the contract’s formation. (Opposition, p. 10:7-17.) Plaintiff maintains that

3 “As in many consumer transactions involving standard form contracts, Sanchez apparently did not read the entirety of his contract, including the arbitration clause. (See Consumer Financial Protection Bur., Arbitration Study: Rep. to Congress, Pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act § 1028(a) (Mar. 2015) § 3, p. 19 [fewer than 7 percent of credit card consumers subject to predispute arbitration clauses knew that they could not sue in court]; cf. Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 710 [applying “the general rule that one who assents to a contract is bound by its provisions and cannot complain of unfamiliarity with [its] language” to a nonadhesive health care contract negotiated by the Board of Administration of the State Employees Retirement System on the plaintiff's behalf].) [¶] On the other hand, Valencia was under no obligation to highlight the arbitration clause of its contract, nor was it required to specifically call that clause to Sanchez's attention.

Any state law imposing such an obligation would be preempted by the FAA.”

Labor Code section 432.6, subdivision (a) precludes employers from requiring arbitration as a condition of employment. Labor Code section 432.6, subdivision (f), however, also provides, “Nothing in this section is intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act.” As noted above, the parties do not dispute that the FAA applies here, and as Defendants argue, the FAA preempts Labor Code, § 432.6 under Chamber of Commerce of the United States v.

Bonta (9th Cir. 2023) 62 F.4th 473, 480. Plaintiff also cites Baltazar, supra, 62 Cal.4th 1237 for the proposition that the failure to provide arbitration rules renders an agreement procedurally unconscionable. The Baltazar court is inapposite as it held that the failure to include the rules does not affect the court’s unconscionability analysis where the challenge to the enforcement of the arbitration agreement has nothing to do with the applicable rules. (Id. at p. 1246.) While Plaintiff also cites, inter alia, Zullo v.

Superior Court (2011) 197 Cal.App.4th 477, 485 and Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 246 (Carbajal) in support, these cases are superseded by Baltazar, which expressly rejected a claim similar to Carbajal. (See Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232, 248 [discussing Carbajal, given subsequent ruling in Baltazar].) And with respect to her assertion that a failure to name a forum renders an agreement procedurally unconscionable, the court disregards the assertion as Plaintiff provides no authority in support. (United Grand, supra, 36 Cal.App.5th at p. 153.)

Plaintiff’s final argument on oppression is premised on the following factors outlined in OTO: (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. (OTO, supra, 8 Cal.5th at pp. 126-127, citation and quotations omitted.)

Plaintiff asserts that all factors are present, indicating procedural unconscionability. The Court disagrees. First, Plaintiff had one week from the issuance of the Offer Letter on April 21, 2022 to consider, sign, and return the same. (Offer Letter, p. 3.) Plaintiff viewed the Offer Letter on April 22, 2022 and signed on April 26, 2022—i.e., two days before the deadline (factor 1). (Heller Decl., ¶¶ 12, 14.) Furthermore, contrary to Plaintiff’s characterization, the Court does not find the arbitration clause to be problematic, as it identified Plaintiff’s obligation to arbitration in clear and concise plain English in a readable font in the penultimate paragraph of the three-page Offer Letter (factor 3). (Offer Letter, p. 2.)

Finally, while Plaintiff declares that Heartflow did not explain to her that she had an opportunity to review the onboarding documents with an attorney, Plaintiff cites no authority supporting the assertion that a failure to provide such an explanation renders the arbitration agreement procedurally unconscionable as a matter of law (factor 5). (United Grand, supra, 36 Cal.App.5th at p. 153.) Plaintiff also produces no evidence that she wanted to but could not consult an attorney. (See Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979 [“‘This court is not required to discuss or consider points which are not argued or which are not supported by citation to authorities or the record.”]) Plaintiff’s declaration stating, “The offer letter and onboarding documents were presented to me as a condition of my employment” and “I have had no legal education, training, or experience”, however, demonstrates the presence of factors 2 and 4.

b. Surprise. In claiming surprise, Plaintiff repeats her argument that because the At-Will Agreement has “Arbitration Agreement” in the title but no reference to arbitration in the substantive portion of the document, Plaintiff was surprised. For reasons discussed above, the Court has rejected this argument. And while Plaintiff claims in her declaration that she “did not know or have any reason to expect that signing any documents...would prevent [her] from filing a lawsuit in the future or eliminate my right to a jury”, the Offer Letter expressly states “(ii) you are waiving any and all rights to a jury trial but all court remedies will be available in arbitration.” (Compare Lum Decl., ¶ 5 with Offer Letter, p. 2.)

Plaintiff also argues that she was surprised because there was no description of how arbitration would work or the claims it would reach. Plaintiff provides no legal authority supporting the proposition that an arbitration clause must explain or describe the arbitration process, and furthermore, the Offer Letter plainly states, “In the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that (i) any and all disputes between you and the Company shall be fully and finally resolved by binding arbitration[.]” (Offer Letter, p. 2.)

2. Substantive Unconscionability While the Court finds some procedural unconscionability based on the adhesive nature of the arbitration agreement, this is not dispositive because Plaintiff must still establish substantive unconscionability. (See Ramirez v. Charter Communications (2024) 16 Cal.5th 478, 492-493 (Ramirez) [while adhesion contracts are subject to scrutiny, “they remain valid and enforceable unless the resisting party can also show that one or more of the contract’s terms is substantively unconscionable or otherwise invalid”].)

Plaintiff insists that the arbitration agreement is substantively unconscionable because it requires Plaintiff to arbitrate the claims that she is most likely to bring, while Defendants may pursue claims they are most likely to bring in court. (Opposition, p. 11:21-24.) “Substantive unconscionability looks beyond the circumstances of contract formation and considers the fairness of an agreement’s actual terms focusing on whether the contract will create unfair or one-sided results. Substantively unconscionable contractual clauses reallocate risks in an objectively unreasonable or unexpected manner.” (Ramirez, supra, 16 Cal.5th at p. 493, internal punctuation and citations omitted.) “In assessing substantive unconscionability, the paramount consideration is mutuality.” (Pinela v.

Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 241, internal citation and quotation marks omitted.) “[I]t is unfairly one-sided for an employer with superior bargaining power to impose arbitration on the employee as plaintiff but not to accept such limitations when it seeks to prosecute a claim against the employee, without at least some reasonable justification for such one-sidedness based on ‘business realities.’” (Armendariz, supra, 24 Cal.4th at p. 117.)

Here, Plaintiff interprets the At-Will Agreement as excluding claims brought under its terms from arbitration and insists that such an exclusion is unfair because such claims are more likely to be brought by Heartflow. (Opposition, p. 12:22-24.) Specifically, Plaintiff asserts that the Legal and Equitable Remedies provision would allow Heartflow to enforce its “confidentiality, trade-secret, invention-assignment, and non-disclosure provisions” through injunction, specific performance, or other equitable relief. (Id. at p. 12:24-26.)

In support, Plaintiff cites two recent decisions: Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93 (Fuentes) and Stoker v. Blue Origin, LLC (2026) 120 Cal.App.5th 91 (Stoker). In Fuentes, the Court reviewed the terms of a confidentiality agreement, noting that nothing in its text required an employer-defendant to bring its claims under the agreement in court, but also observing references to “legal action” which, understood in its ordinary, popular sense, indicated a proceeding in court. (Id. at p. 108.)

The Court concluded, “The confidentiality agreements’ silence about the forum for dispute resolution therefore indicates that the parties did not intend disputes to be subject to mandatory arbitration.” (Id. at p. 109.) In Stoker, the appellate court affirmed the denial of a motion to compel arbitration, finding that the arbitration agreement was procedurally unconscionable as a contract of adhesion and substantively unconscionable because (1) it was overbroad in the claims it would cover; (2) contained a carveout exemption benefitting the employer; and (3) contained a pre-dispute waiver for the right to a jury trial and to bring a representative claim. (Stoker, supra, 120 Cal.App.5th at pp. 106-112.)

The Stoker court concluded that the carveout exemption for trade secret violations, trademark infringement, breach of fiduciary duty, among other claims, were most likely to be brought by an employer, and an arbitration agreement excluding such claims created a one-sided exemption that is unconscionable as a matter of law. (Id. at pp. 108, 110.)

In their reply brief, Defendants distinguish these cases, noting that in Fuentes, the Court found a high level of procedural unconscionability. In Stoker, the appellate court found three independent bases for substantive unconscionability. To the extent Defendants argue the lack of mutuality alone is not sufficient to demonstrate unconscionability, Defendants are correct. In Ramirez, the Court noted that unconscionability due to lack of mutuality “requires a one-sided result along with the absence of a justification for it.” (Ramirez, supra, 16 Cal.5th at p. 500; see Armendariz, supra, 24 Cal.4th at p. 117.) Here, just as in Ramirez, Defendants provide no business justification for the lack of mutuality, and accordingly, this Court “must assume” that the lack of mutuality is unconscionable. (BI 500 [citing Armendariz, supra, 24 Cal.4th at p. 120.)

3. Severability. Having found the “Legal and Equitable Remedies” provision of the At-Will Agreement to be substantively unconscionable, the remaining question is whether the provision is severable. “At the outset, a court should ask whether ‘the central purpose of the contract is tainted with illegality.’” (Ramirez, supra, 16 Cal.5th at p. 516 [quoting Armendariz, supra, 24 Cal.4th at p. 124].) “If so, the contract cannot be cured, and the court should refuse to enforce it. If that is not the case, the court should go on to ask first, whether the contract’s unconscionability can be cured purely through severance or restriction of its terms, or whether reformation by augmentation is necessary.” (Ramirez, supra, 16 Cal.5th at p. 516.)

Here, as Defendants argue, the central purpose of the arbitration agreement is to arbitrate claims arising out of the parties’ employment relationship. (Offer Letter, p. 2.) The At-Will Agreement’s “Legal and Equitable Remedies” provision that, according to Plaintiff, allows Defendant to enforce its confidentiality, trade secret, invention assignment, and non-disclosure provisions by injunction, specific performance, or other equitable relief (Opposition, p. 12:24-26), is therefore collateral and does not go to the central purpose of the agreement to arbitrate employment disputes.

Given the foregoing, the court concludes that the “Legal and Equitable Remedies” provision is severable. (See Ramirez, supra, 16 Cal.5th at p. 517 [“if the contract contains a severance clause, the court should take it into account as an expression of the parties’ intent that an agreement curable by removing defective terms should otherwise be enforced.”].)

V. Conclusion. The motion of defendants to compel arbitration is GRANTED. The action of defendants to stay the litigation of this matter is GRANTED pending the outcome of arbitration.

___________________________ ____________________________________________ DATED: HON. SOCRATES PETER MANOUKIAN Judge of the Superior Court County Of Santa Clara

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