Jesus Nopala v. Layne Laboratories, Inc.

On a petition to compel arbitration, “ ‘the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.’ (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903.)” (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 544.)

II. DISCUSSION

A. Applicability of FAA

Defendant argues that “[t]he Federal Arbitration Act (‘FAA’) requires the enforcement of the Agreement because Plaintiff’s employment relationship falls within interstate commerce, the FAA broadly mandates enforcement of agreements to arbitrate employment-related subject matter, and the claims alleged in the Complaint unmistakably fall within the subject matter covered by the

Agreement.” (Mot., p. 4, ll. 5-8.) “The question of whether the parties agreed to arbitrate is answered by applying state contract law even when it is alleged that the agreement is covered by the FAA. [Citation.]” (Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Cal.App.4th 676, 683; see also, Knight et al., Cal. Practice Guide: Alternative Dispute Resolution (The Rutter Group 2025) ¶ 5:81.)

B. Existence of an Agreement

Plaintiff does not dispute that he signed the Agreement, which is attached as Exhibit 1 to the Declaration of Jesus Galindoleyva. (Galindoleyva Dec., ¶ 5, Ex. 1 [signed Agreement in Spanish]; Lange Dec., ¶ 3, Ex. A [certified translation of the Agreement from Spanish to English].)

The Agreement provides that “[t]he agreement applies to all claims Employee may bring against the Employer for ...wage and hour violations...Included within the scope of this Agreement are all disputes, whether based on tort, contract, statute (for example, without limiting the scope of claims covered by this Agreement,...the California Labor Code and California Wage Orders (including, but not limited to, claims for overtime wages, unpaid wages, vacations, paid sick leave, and incentive compensation, and claims involving meal and rest breaks), or any other local, state, or federal law, order, directive, or regulation)...” (Lange Dec., ¶ 3, Ex. A, § 1.2) Plaintiff does not dispute that his claims fall within the scope of the Agreement.

The Court finds that Defendant has met its burden of establishing (1) the existence of an agreement to arbitrate; and (2) that Plaintiff’s claims fall within the scope of the Agreement to arbitrate. The burden thus shifts to Plaintiff to prove the ground for denial.

C. Lack of Mutual Assent

Plaintiff argues that the Arbitration Agreement is unenforceable because there is lack of mutual assent.

“Ordinarily, one who accepts or signs an instrument, which on its face is a contract, is deemed to consent to all its terms and cannot escape liability on the ground that he or she has not read it. If the person cannot read, he or she should have it read or explained.” (1 Witkin, Summary of California Law (11th ed. 2026) Contracts, § 118.) An exception is fraud in the execution, which occurs “when a party has been deceived into signing an agreement and as a consequence does not know what they have signed.” (California Law of Contracts (Cont.Ed.Bar 2025) § 3.6.) “Fraud in the execution most often arises where some limitation — such as blindness, illness, or illiteracy — prevents a party from reading or understanding a contract he or she is about to sign. [Citation.]” (Munoz v. Patel (2022) 81 Cal.App.5th 761, 775.)

Plaintiff contends, “Defendant obtained Mr. Nopala’s signature to the Arbitration Agreement by fraudulently procuring it.” (Opp., p. 5, ll. 10-11.) Plaintiff relies on two cases, Najarro v. Superior Court (2021) 70 Cal.App.5th 871 (Najarro), and Rosenthal v. Great Western Financial Securities Corporation, supra, 14 Cal.4th 394 (Rosenthal).

In Najarro, the court found fraud in the execution where a plaintiff (Ms. Serrano) sought employment with the defendant employer. Ms. Serrano had a second-grade education, spoke only Spanish, and was illiterate. (Najarro v. Superior Court, supra, 70 Cal.App.5th 871, 886–887.) Ms. Serrano stated that, when she applied for work, the employer presented documents for her to sign without an explanation. (Id. at p. 887.) When Ms. Serrano explained she could not read the employer asked her, “do you want to work or not?” (Ibid.)

When Ms. Serrano inquired what the documents were, she was instructed to sign them because they were “not important.” (Ibid.) She was not permitted to take the documents home. (Ibid.) The court concluded that the plaintiff established fraud in the execution because she could not read in Spanish or English, was told the agreements were unimportant, was pressured to sign (including being asked whether she wanted the job), and the documents were not explained to her despite her lack of understanding and the employer did not present evidence contradicting the employee’s claims. (Ibid.)

In Rosenthal, bank depositors sued the bank, the bank’s affiliate and its representatives, asserting that the client agreements were void for fraud in the execution because plaintiffs were induced to sign based on misrepresentations about the nature or character of the documents. (Rosenthal, supra, 14 Cal.4th 394.) Plaintiffs included “an 81-year-old Italian immigrant, who speaks ‘only a few words of English’ and ‘cannot read English at all’” (Ms. Greco) and her daughter who had a limited ability to speak, understand, and read English (Ms.

Kasbarian). (Id. at p. 427.) Ms. Greco informed the representative of her limited understanding because of her poor English. (Ibid.) The representative took out some papers, read them, and had Ms. Kasbarian translate for Ms. Greco. (Ibid.) The representative did not mention the word “arbitration.” (Ibid.) After describing what the documents said, the representative instructed Ms. Greco to sign the paperwork to open the account. (Ibid.)

The California Supreme Court in Rosenthal found that plaintiffs’ declarations “if believed ... would establish facts sufficient to show reasonable reliance as an element of fraud in the execution of the client agreements” – including the plaintiffs’ prior relationship with the financial institution, their limited understanding of English, and the agents’ “representations that their oral recitals accurately reflected the terms of the agreements.” (Rosenthal, supra, at p. 428.) The Court found that based on these facts, plaintiffs would not have been negligent in relying on the agents’ representations rather than reading the contracts. (Ibid.) The Court noted, however, that defendants disputed key aspects of plaintiffs’ declarations, creating factual issues that required resolution by the trial court. (Ibid.)

Here, Plaintiff argues that the fraud in execution exception applies in this case like in Najarro and Rosenthal. Plaintiff highlights the following facts:

Nopala has a 2nd grade education and is unable to read even basic documents. (Nopala Decl. ¶¶ 6-7.) Layne Labs’ manager knew Plaintiff Nopala could not read and that he needed to take documents like the agreement home to get help from his family to understand them. (Nopala Decl. ¶ 8.) The meeting did not adequately inform Nopala that he was waiving rights, what an arbitration even was, or the content of the agreement, which was treated as a minor administrative matter in order to stay current with the company, not that he was consenting to waive his employment rights which and agreeing to an arbitration of claims structure by

Layne Labs. (Nopala Decl. ¶¶ 12-13.) No one read the entire agreement in Spanish to Nopala, nor explained the full effect, content or significance of the agreement. (Nopala Decl. ¶ 13.) Nopala only witnessed his coworkers signing the agreement and did not see anyone leave to review the agreement at home. (Nopala Decl. ¶ 14.) When he asked supervisor Galindo if he could take the document home, Galindo told him he could not and that it needed to be signed that day, and Nopala did not defy him because he interpreted Galindo’s response as a threat that he had to sign or else risk his job. (Nopala Decl. ¶ 11.)

(Opp., p. 5, ll. 11-24.)

Citing Najarro, supra, Defendant argues that Plaintiff relies on legal authority that is factually distinguishable, which includes substantial evidence of intentional concealment, misrepresentation, or circumstances in which the employee was deprived of a meaningful opportunity to understand the nature of the document. In contrast, Plaintiff was not informed that the Agreement was unimportant, was not denied the opportunity to review the Agreement and to ask questions. Instead, Plaintiff was provided the Arbitration Agreement in Spanish; Defendant explained it to employees during a bilingual meeting, instructed them to take time to review it (including taking it home if desired), and invited the employees to ask questions about the Agreement. (Reply, pp. 1-2.)

Unlike the Rosenthal plaintiffs, Plaintiff does not declare that Defendant’s manager or anyone else misled him about the contents of the Agreement. Instead, Plaintiff states only that he “did not understand everything that was discussed.” (Nopala Dec., ¶ 13.) The Agreement was in Spanish, Plaintiff’s primary language. (Ibid.) Although Plaintiff asserts he cannot read Spanish beyond basic words such as traffic and stop signs, the manager spoke Spanish at the meeting. (Id. ¶¶ 7, 12.) Plaintiff states, however, that the manager spoke quickly and, when Plaintiff asked him whether Plaintiff could take the paperwork home, the manager responded in an aggressive and confrontational manner that the paperwork had to be returned that day to remain current with the company. (Id. ¶¶ 11, 12.)

Even accepting Plaintiff’s characterization that the manager’s response conveyed pressure to sign that day, no evidence was presented whether Plaintiff would have been terminated had he declined to do so. Further, unlike the plaintiffs in Rosenthal, Plaintiff was able to ask questions in his native language during the meeting. While Plaintiff states his request to take the paperwork home was declined, it is unclear whether Plaintiff requested a straightforward explanation of what he was being asked to sign. Finally, there is no indication that Defendant’s manager represented the documents were something other than what they were.

Plaintiff has not met his burden to prove fraud in the execution.

D. Fraudulent Inducement

With respect to fraud in the inducement, “the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.” [internal quotation marks omitted.] (California Law of Contracts (Cont.Ed.Bar

2025) § 3.11.) “[C]laims that the contract as a whole was fraudulently induced must be resolved by the arbitrator, not the court. The result is that such claims must be arbitrated.” (Knight et al., Cal. Practice Guide: Alternate Dispute Resolution (The Rutter Group 2025) ¶ 5:112.)

In this case, Plaintiff has identified no false statements, misrepresentations, or concealments regarding the character of the Agreement. Therefore, Plaintiff fails to satisfy his burden of establishing fraud in the execution.

E. Unconscionability

Plaintiff argues the Agreement is unconscionable, and therefore, unenforceable.

As the party asserting unconscionability, Plaintiff has the burden of establishing the defense. To meet that burden, he must show both procedural and substantive unconscionability. (OTO, supra, 8 Cal.5th 111, 125, 126.) However, the two elements need not be present in the same degree. (Ibid.) Instead, it is a sliding scale and “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.” (Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz).) “ ‘The ultimate issue in every case is whether the terms of the contract are sufficiently unfair, in view of all relevant circumstances, that a court should withhold enforcement.’ [Citation.]” (OTO, at p. 126.)

Both federal and California law favor enforcement of valid arbitration agreements. (Armendariz, supra, 24 Cal.4th 83, 97.)

1. Procedural Unconscionability

Procedural unconscionability begins with an inquiry as to whether the Agreement is a contract of adhesion. (Armendariz, supra, at p. 113.) A contract of adhesion is a standardized agreement drafted by the party with superior bargaining strength which the other party must sign or reject. (Ibid.) In the employment context, “the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement. [Citation.]” [internal quotation marks omitted.] (Carmona v. Lincoln Millenium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 84.)

Unconscionability occurs where the circumstances of the contract’s formation created such oppression or surprise that overall fairness must be scrutinized. (OTO, supra, 8 Cal.5th 111, 125, 126.) “The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party’s review of the proposed contract was aided by an attorney. [Citation.]” (Id., at pp. 126-127.)

Plaintiff declares that he only has a first-grade education, and, aside from traffic signs, Plaintiff cannot read Spanish. (Nopala Dec., ¶¶ 6, 7.) Plaintiff states that he and about 20 coworkers were called into a meeting on January 11, 2003. (Id., ¶ 11.) Plaintiff was presented with a packet of documents at the beginning of the meeting. (Ibid.) When Plaintiff asked the manager (Galindo) whether he could take the documents home, Galindo responded in an “aggressive and confrontational” manner stating that the documents had to be signed that day to stay current with the company.” (Ibid.)1

Galindo’s response led Plaintiff to believe he would be fired if he did not sign the document. (Nopala Dec., ¶ 11.) While Plaintiff acknowledges that Galindo spoke in Spanish during the meeting, Plaintiff states Galindo spoke quickly, and Plaintiff could not comprehend the discussion. (Id., ¶ 12.)

Plaintiff states the meeting lasted about twenty minutes. (Nopala Dec., ¶ 13.) The employees were instructed to sign and return the document. (Id., ¶ 14.) Plaintiff observed all his coworkers sign the Agreement. (Ibid.) None of his coworkers appeared to take the Agreement home without signing it. (Ibid.) Plaintiff does not recall being told that it was optional to sign the document. (Id., ¶ 15.) Plaintiff did not understand that by signing the document that he was waiving his right to pursue claims in court against Layne. (Ibid.) Plaintiff states he would not have signed the agreement had he known or understood he was waiving such right. (Ibid.) Plaintiff declares he is not familiar with what an arbitrator is, what they do, and how he would even go about finding one; Plaintiff has only heard of that word in the context of a referee in sports. (Ibid.)

In response, Defendant submits the declaration of Mary Waterman, Head of Human Resources and Office Manager for Layne Labs, who confirms that the arbitration agreements were provided to employees for signature. (Waterman Dec., ¶ 1, 9.) Ms. Waterman states that “[s]ince prior to 2023 and continuously to the present, Layne Labs provides arbitration agreements to its hourly, nonexempt employees, including Plaintiff, in both English and Spanish, if necessary.” (Id., ¶ 7.) Defendant maintains a policy and practice of providing employees with an opportunity to review the Agreement before signing it. (Ibid.)

Employees are permitted to read the Agreement, ask questions to understand its terms, and — upon request — receive additional time to review it, including taking the agreement home for further consideration. (Ibid.) It is also Layne Labs’ policy that a Human Resources representative or the General Manager is made available to address employee questions regarding the agreement prior to the employee signing it. (Ibid.)

Defendant’s evidence confirms that the Agreement is a contract of adhesion in that it is a standardized agreement drafted by the party with superior bargaining strength. (See, OTO, L.L.C. v. Kho, supra, 8 Cal.5th 111, 126 [“Arbitration contracts imposed as a condition of employment are typically adhesive....”].)

1 There is conflicting evidence regarding the amount of time Plaintiff and his coworkers were given to review the agreement. Defendant’s evidence reflects that employees were directed to take their time reviewing the Agreement and were permitted to review the agreement at home. (Galindoleyva Dec., ¶ 4; Rosas Dec., ¶ 4; Brown Dec., ¶ 4.) 6

Considering all the facts, the Court concludes that a moderate degree of procedural unconscionability is present here. The language regarding arbitration and jury trial waivers is not hidden; it appears in the first two paragraphs on page one of the Agreement and immediately above the signature line in conspicuous, all-capital lettering. Moreover, a meeting was held discussing the Arbitration Agreement in Spanish and in English, and Plaintiff was provided the Agreement in Spanish. Plaintiff asserts he has limited proficiency in written Spanish and that “people at Layne” knew of this limited proficiency. However, the only evidence supporting this claim is his own assertion. (Nopala Dec., ¶ 10.)

Because procedural unconscionability alone does not invalidate a contract, the Court moves on to the next issue, substantive unconscionability.

2. Substantive Unconscionability

“Substantive unconscionability examines the fairness of a contract’s terms.” (OTO, supra, 8 Cal.5th 111, 129.) The central precept of the unconscionability doctrine is whether the terms are “ ‘unreasonably favorable to the more powerful party.’ [Citation.]” (Id. at p. 130.) Thus, the Court reviews the Agreement’s terms and whether they are “so one-sided as to shock the conscience. [Citation.]” [internal quotation marks omitted.] (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1330.)

Plaintiff asserts the Agreement is substantively unconscionable because it (1) lacks mutuality; (2) is of infinite duration; (3) requires vague or impossible initiation requirements; and (4) includes a pre-dispute waiver of the right to jury trial.

Plaintiff argues that the Agreement lacks mutuality because, although it requires Plaintiff and Defendant to arbitrate all claims, the Employer Entities are not required to arbitrate any claims they may have against Plaintiff.

Paragraph 1.3 of the Agreement provides that:

The Employee’s Agreement to Arbitrate Claims Against the Employer includes claims that the Employee may file against the parent entities, subsidiaries, affiliates, and customers of Employer, as well as its owners, directors, officers, managers, employees, agents, brokers, contractors, attorneys, including in their capacity as administrators of benefits or as fiduciaries of any benefit plan in which the Employee, and Employer insurance companies (hereinafter “Employer Entities”) participate or are beneficiaries. The Employee also agrees to arbitrate claims against any person or entity that the Employee claims to be a joint employer, agent of the employer, joint venture, DBA, or a jointly owned entity with Employer.

(Lange Dec., ¶ 3, Ex. A, ¶ 1.3.)

Defendant cites Ayala-Ventura v. Superior Court (2025) 119 Cal.App.5th 241 for the proposition “that mutuality is assessed as between the contracting parties, not between a party and affiliated non-signatories.” (Reply, p. 7, ll. 3-4.) Defendant highlights that “the court explained, the

arbitration agreement ‘is between [the employer] and [the employee]; it is not between her and [the employer’s] employees and agents,’ and therefore the absence of obligations imposed on those third parties does not render the agreement non-mutual. (Id. at 259.) What matters is that the agreement ‘applies equally to employee and employer-initiated claims,’ which preserves the required ‘modicum of bilaterality.’ (Id.)” (Reply, p. 7, ll. 4-9.)

The Court is persuaded by Defendant’s argument, and finds that Ayala-Ventura v. Superior Court, supra, 119 Cal.App.5th 241, applies. Further, because the Court finds the parties agreed to arbitrate only those claims and controversies arising out of Plaintiff’s employment,2 the Agreement’s failure to require the Employer Entities to arbitrate their claims against Plaintiff does not result in a lack of mutuality between the contracting parties.

Second, Plaintiff contends the Agreement is unconscionable because “it has no defined duration or mechanism for termination or modification.” (Opp., 11, ll. 22-24.) Plaintiff directs the Court to the following paragraph.

This is the entire Agreement between Employee and Employer regarding dispute resolution, and this Agreement supersedes any and all prior agreements regarding these issues. Any Agreement contrary to the foregoing must be entered into, in writing, by Employee and Employer’s Chief Executive Officer. Oral representations made before or after employment do not alter this Agreement. This Agreement shall survive termination of Employee’s employment relationship with the Employer. (Ex. B to Lange Decl., p. 10, § 8.)

(Opp., p. 11, ll. 18-22.)

However, a review of the certified translation reveals the absence of the subject paragraph in the Agreement signed by Plaintiff. (Lange Dec., ¶ 3, Ex. A, p. 3.) Accordingly, the Court finds that there is no temporal limitation expressed in the Agreement.

Third, Plaintiff contends that the Agreement states that arbitration claims must be submitted to the company’s “Legal Claims Department,” yet provides no information identifying that Department, no contact information, and no individual point of contact. Plaintiff further contends the claim submission requirement applies only to employees and therefore operates to confuse, delay, and frustrate an employee’s ability to present claims. (Opp., p. 13, l. 9.) Defendant responds that the reference to a “Legal Claims Department” does not rise to the level of substantive unconscionability under Armendariz, supra, which addresses provisions that are overly harsh or one-sided as to shock the conscience.

The Court is not persuaded that requiring an employee to submit claims to the “Legal Claims Department” without additional contact information, is so harsh or one-sided as to constitute substantive unconscionability.

2 (Lange Dec., ¶ 3, Ex. A, p. 3, paragraph above signature line, [“EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT REQUIRES THAT EMPLOYEE AND EMPLOYER ARBITRATE ANY AND ALL DISPUTES ARISING OUT OF HIS OR HER EMPLOYMENT WITH THE EMPLOYER...”].) 8

Fourth, Plaintiff contends the Arbitration Agreement is substantively unconscionable because it requires an unconditional waiver of the right to jury trial, arguing that pre-dispute jury trial waivers are not authorized by the Code of Civil Procedure and are therefore unenforceable. Relying on Grafton Partners v. Superior Court (2005) 36 Cal.4th 944, 958-959, Plaintiff asserts such waivers are invalid because Code of Civil Procedure section 631 presupposes a pending action and does not permit waiver before litigation begins.

The Court finds that Plaintiff’s argument is without merit. Grafton Partners addressed a predispute contractual waiver of jury trials. (Grafton Partners v. Superior Court, supra, 36 Cal.4th 944, 950.) The California Supreme Court held that agreements to have future lawsuits tried by the court rather than a jury are unenforceable. (Ibid.) As Grafton Partners recognizes, arbitration agreements are different because they are authorized by Code of Civil Procedure section 1281 and involve an agreement to avoid the judicial forum altogether. (Id., at p. 955.)

For the foregoing reasons, the Court concludes that the Agreement in this case is enforceable.

III. REQUEST FOR EVIDENTIARY HEARING

There is no automatic entitlement to an evidentiary hearing on a petition or motion to compel arbitration, and a trial court does not per se abuse its discretion by resolving evidentiary conflicts without hearing live testimony. (Rosenthal, supra, 14 Cal.4th 394, 414; Ashburn v. AIG Financial Advisors, Inc. (Ashburn) (2015) 234 Cal.App.4th 79, 96.) However, when the “enforceability of an arbitration clause may depend upon which of two sharply conflicting factual accounts is to be believed, the better course would normally be for the trial court to hear oral testimony and allow the parties the opportunity for cross-examination.” (Rosenthal, at p. 414; see Ashburn, at p. 96.)

A “judge may not adopt a policy of outright refusal to consider oral testimony on a motion hearing. Rather, if requested by either party, the judge must exercise discretion as to whether oral testimony would be necessary or helpful to the decision of the matter.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2026) ¶ 9:177, citing Reifler v. Superior Court (1974) 39 Cal.App.3d 479, 485.)

Plaintiff requests an evidentiary hearing to permit cross-examination of the parties and their witnesses, in connection with Defendant’s motion to compel arbitration. Plaintiff has not shown why such a hearing would be “necessary or helpful” to the adjudication of this motion, nor has Plaintiff addressed “the nature and extent of the evidence proposed to be introduced and a reasonable time estimate for the hearing.” (Cal. Rules of Court, rule 3.1306(b), see Local Rules, rule 7.08.) Plaintiff also does not explain why the information sought could not have been obtained through discovery, such as depositions, and why such evidence was not presented by declaration or transcript excerpts. The Court is not persuaded that an evidentiary hearing is warranted, and Plaintiff’s request for an evidentiary hearing is therefore denied.

ORDER

The Motion to Compel Arbitration is granted. This action shall be stayed, pending resolution of the arbitration. Defendant is directed to serve the notice of ruling. (Code Civ. Proc., § 1019.5, subd. (a).)

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