Olivia Barajas, et al. v. Justin Vineyards & Winery, LLC

fraud in the execution. The appellate court reversed and remanded, leaving to this Court’s discretion whether to consider plaintiffs’ alternative defenses to enforcement, e.g., unconscionability. The matter was remitted to this Court on August 13, 2024.

On August 19, 2024, this Court granted plaintiffs' request for supplemental briefing regarding the newly decided California Supreme Court case Ramirez v. Charter Commc'ns, Inc., (2024) 16 Cal.5th 478 (Ramirez), and whether to stay the claim for the recovery of penalties on behalf of aggrieved employees and the State of California pursuant to the Private Attorneys General Act in the event that plaintiffs individual claims are compelled to arbitration.

The parties thereafter agreed to stay the entire action, including the supplemental briefing and discovery, until the California Supreme Court issued its decision in Fuentes v. Empire Nissan, Inc., S280256; (B314490); 90 Cal.App.5th 919; Los Angeles County Superior Court; 20STCV35350 pursuant to California Rules of Court, rule 8.532(b). The parties further agreed to toll the five-year deadline to bring the case to trial. The Court entered an order on the parties’ stipulation on October 31, 2024.

On April 6, 2026, the Court issued a minute order that pursuant to the stipulation, the stay of the case was lifted as of February 2, 2026, when the California Supreme Court entered its decision in Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93 (Fuentes). The Court also set a supplemental briefing schedule and hearing date.

Plaintiffs’ and Justin’s supplemental briefs have been filed and hearing on the remanded motions is now on calendar. The Court has reviewed the supplemental briefing, as well as the Fuentes and Ramirez decisions.

Plaintiffs contend that the motions should be denied on the grounds that the agreements are unconscionable, that there was no meeting of the minds/lack of mutual assent, and that if the individual claims are ordered to arbitration, that the representative PAGA claims should proceed, rather than be stayed.

Justin contends that the motions should be granted.

The Court incorporates its factual findings from pages 3-19 of its original ruling on the motions and does not restate them here.

Lack of Mutual Assent

Plaintiffs argued lack of mutual assent in their original opposition as part of their fraud argument. Now they recast their argument, contending that there is no agreement because Justin did not intend plaintiffs to read—much less understand or comprehend—the agreements, due to the language barrier.

Plaintiffs contend that Fuentes, supra, suggests that there may be no contract to arbitrate where the party presenting a contract knows the contract is not legible to the party presented with the agreement. (Fuentes, supra, 19 Cal.5th at p. 114.) However, the appellate court did not reach that

argument, finding that it was not properly before them, but left it open for the trial court to consider on remand. (Ibid.)

Not only did the Fuentes court make no finding on the issue of mutual assent, but the facts of Fuentes are also different than those here. Fuentes addressed physical illegibility; it did not address a language barrier, which has previously been found not to bar enforcement of an agreement. (Caballero, supra, 69 at pp. 518-519; see also Ramos v. Westlake Services LLC (2015) 242 Cal.App.4th 674, 687; Fields v. Blue Shield of California (1985) 163 Cal.App.3d 570, 578.)

Plaintiffs cite no authority to distinguish the cases finding that a party may not avoid an arbitration provision because the party has limited proficiency in the English language. “Absent fraud or overreaching, [plaintiff’s] inability to read English and his limited ability to speak or understand English do not alter the conclusion that his signatures and initials on the contract manifested his agreement to its terms. [Citation.]” (Caballero, supra, 69 Cal.App.5th at p. 518.)

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. We have referred to these two aspects of unconscionability as its procedural and substantive elements. The procedural element concerns the circumstances of contract negotiation and formation, particularly oppression or surprise due to unequal bargaining power. The substantive element, by contrast, concerns the fairness of an agreement's actual terms, i.e., whether those terms are overly harsh or one-sided.

Both procedural and substantive elements must be present to conclude a term is unconscionable, but these required elements need not be present to the same degree. Courts apply a sliding scale analysis under which ‘the more substantively oppressive a term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.

When there is substantial procedural unconscionability, even a relatively low degree of substantive unconscionability may suffice to render the agreement unenforceable. Substantive terms that, in the abstract, might not support an unconscionability finding take on greater weight when imposed by a procedure that is demonstrably oppressive. Although procedural unconscionability alone does not invalidate a contract, its existence requires courts to closely scrutinize the substantive terms to ensure they are not manifestly unfair or one-sided. 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.

(Fuentes, supra, 19 Cal.5th at pp. 102–103, internal citations and quotations omitted.)

In their original oppositions, plaintiffs contend that the agreements are procedurally unconscionable because they were not informed in a language they could understand that they were signing an agreement to arbitrate.

The Court finds a high level of procedural unconscionability because there is evidence that the agreements were imposed on plaintiffs as a condition of employment and were not provided to plaintiffs in a language they could read, write, and understand. (Fuentes, supra, 19 Cal.5th at pp. 103-105; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 115; Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 85 [high degree of procedural unconscionability where employer “knew plaintiffs required Spanish translations because they provided some translation,” but failed to translate the entirely of the agreement into Spanish]; Samaniego v.

Empire Today LLC (205 Cal.App.4th 1138, 1145-1 146 [plaintiffs did not speak English as a first language, had little or no literacy in English, and were told to sign Englishlanguage documents if they wished to continue employment].)

Because the Court finds a high level of procedural unconscionability, only a low level of substantive unconscionability must be shown. 2

Plaintiffs contended in their original oppositions that the agreements are substantively unconscionable because the terms as to what claims are subject to arbitration are one-sided, to Justin’s benefit. Plaintiffs claimed the agreements permitted Justin to pursue relief for claims it is “likely” to have against its employees in court, while requiring the employee plaintiffs to arbitrate their claims. Plaintiffs pointed to the agreements’ list of examples of the types of claims that are subject to arbitration:

Embezzlement/conversion, disclosure of trade secrets, breach of confidentiality agreement, wage and benefit claims; contract claims; personal injury claims; claims for equitable relief; tort claims, such as claims for wrongful termination and defamation; discrimination and harassment claims including, without limitation, those claims brought under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the American (sic) with Disabilities Act, the California Fair Employment and Housing Act, the Family Medical Leave Act, the California Family Rights Act, the Employment Retirement Income Securities Act of 1974; and any other employment-related claims of any type unless otherwise stated herein.

In its original tentative ruling the Court disagreed that the above excerpt evidences claims that are “likely” to be brought by the plaintiffs. A “disclosure of trade secrets,” for example, is a claim that is likely to be brought by Justin, not plaintiffs, as is a “breach of confidentiality” claim. Moreover, the agreement specifically outlines that “any other employment-related claim” is subject to arbitration. This would include claims brought by the employee plaintiffs, and the employer Justin. Moreover, the list of potential claims provided in the agreement is not exhaustive, as Justin indicates with the phrase “include, but are not limited to.” (See Baltazar v. Forever 21, Inc. (2016)

2 In Fuentes, the California Supreme Court held that while illegibility of the agreements went to surprise and demonstrated procedural unconscionability, illegibility did not demonstrate substantive unconscionability, which turns on the fairness of the agreement’s terms. (Fuentes, supra, at pp. 19 Cal.5th at pp. 106-107.)

62 Cal.App.4th l237, 1249 [“It is not particularly remarkable that the agreement’s list of examples might highlight certain types of claims that employees often bring, since part of the purpose of the agreement is to put employees on notice regarding the scope of the agreement, thus eliminating any possible surprise. The examples do not alter the substantive scope of the agreement, nor do they render the agreement sufficiently unfair as to make its enforcement unconscionable.”].)

Plaintiffs’ supplemental brief makes new arguments, to which Justin objects as improper. First, plaintiffs argue that the agreements do not exempt claims before the Labor Commissioner but do exempt injunctive relief under Code of Civil Procedure section 1281.8 3, which an employer is more likely to seek than an employee. However, that section is a neutral statutory provision that permits either party to an arbitration agreement to seek provisional judicial remedies. Plaintiffs cite no authority that found a similar provisions to be lacking in mutuality or substantively unconscionable.

Plaintiffs also contend that in the years since the motion to compel arbitration was briefed, courts have found substantive unconscionability where an agreement purports to bind a plaintiff to arbitrate their claims against a large number of parties when those parties are not bound to arbitrate their claims against the plaintiff. (Cook v. University of Southern California (2024) 102 Cal. App. 5th 312 (Cook).) Plaintiffs argue that such a provision is found here, as the agreements purport to “appl[y] to all claims that the Company may have against Employee, as well as all claims that Employee may have against the Company, including its owners, directors, employees, managers, members, agents, and parties affiliated with its employee benefit and health plans, past and present and each of them.” (Decl. of Danny Hanson in Support of Def.’s Mots. to Compel Arb, Ex. 4.)

Justin again objects to plaintiffs raising a new argument now and also distinguish Cook. In Cook, the Court found an agreement overbroad where it applied to a long list of people and applied to all claims where or not arising of the plaintiff’s employment, renumeration or termination. (Cook, supra, 102 Cal.App.5th at p. 325.) The plaintiff in Cook was forced to “give up the right to ever sue a USC employee in court for defamatory statements or other claims that are completely unrelated to Cook's employment.” (Ibid.)

Here, the claims are limited to those arising out of or relating to plaintiffs’ employment with Justin or the termination of that employment. The Court does not find that the cited provision shows overbreadth.

Moreover, the agreement is mutual as between plaintiffs and Justin. (See Ayala-Ventura v. Superior Court (2026) 119 Cal.App.5th 241, 258-259 [“We are not convinced the agreement's purported failure to require CCS's employees and agents to arbitrate their claims against Ayala- Ventura results in a lack of mutuality between the contracting parties.”].)

To the extent that it is unfair to require plaintiffs to arbitrate claims against Justin’s owners, directors, employees, managers, members, agents, and parties affiliated with its employee benefit

3 Plaintiffs’ supplemental brief cites Code of Civil Procedure section 1281(a)(3), however that section does not contain subsections and does not address injunctive relief. The correct section is Code of Civil Procedure section 1281.8.

and health plans that arise out of their employment or termination, that provision can be severed without affecting the agreement as between plaintiffs and Justin.

The agreements contain a severability provision. (Decl. of Danny Hanson in Support of Def.’s Mots. to Compel Arb, Ex. 4, ¶ 12.) “[I]f 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.” (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 517.) Nor can the Court find that the agreement’s substantive provisions are “tainted with illegality” or that severance would be unjust. (Ramirez, supra, 16 Cal.5th at p. 516- 517.)

As noted above, both procedural and substantive unconscionability must be present in order to find an arbitration agreement unenforceable. Plaintiffs have failed to show that the agreements are substantively unconscionable as between them and Justin.

Barajas and Patricia Verduzco’s PAGA claims

Finally, Plaintiffs contend that if the Court concludes that Barajas and Patricia Verduzco’s’ individual claims must proceed in arbitration, they request that the representative PAGA claims should remain in this Court and should proceed and not be stayed. “[W]here a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court.” (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1123; see also Nickson v. Shemran, Inc. (2023) 90 Cal.App.5th 121, 134.)

Justin argues that the nonindividual PAGA claims are based on the same allegations as in the individual claims and that they should be stayed pending arbitration under Code of Civil Procedure section 1281.4. Therefore, Justin contends allowing them to proceed simultaneously would risk inconsistent determinations. The Court agrees and finds a stay is appropriate.

Ruling

The Court grants the motions to compel arbitration of plaintiffs’ individual claims, including Barajas and Patricia Verduzco’s individual PAGA claims, and stays the nonindividual PAGA claim under Code of Civil Procedure section 1281.4 pending completion of those arbitrations or further order of the Court.

Justin shall prepare the order attaching this ruling.

6