Eric Salas vs Endo Fitness Goleta LLC et al

Analysis: "[T]he Legislature has expressed a 'strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution.' [Citations.] Consequently, courts will 'indulge every intendment to give effect to such proceedings.' [Citations.]" (Mancharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) "California law, like federal law, favors enforcement of valid arbitration agreements." (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.) "Under both federal and California state law, arbitration is a matter of contract between the parties." (Badie v.

Bank of America (1998) 67 Cal.App.4th 779, 787.) Arbitration agreements are valid and enforceable under both California and Federal Law. "A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract." (Code Civ. Proc., Sec. 1281.) "The burden of persuasion is always on the moving party to prove the existence of an arbitration agreement with the opposing party by a preponderance of the evidence." (Gamboa v.

Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164.)

Objections Plaintiff makes 12 objections to the declaration of Laurinda Hein and the exhibits thereto. None of the objections have even minimal merit and are all overruled. Additionally, plaintiff objects to three portions of defendants' counsel's declaration. Those objections also lack even minimal merit and are overruled.

Existence of the Arbitration Agreement Plaintiff does not dispute that the FAA applies to the interpretation of the agreement. "General principles of contract law determine whether the parties have entered a binding agreement to arbitrate." (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420.) "The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability." (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.) "The burden of persuasion is always on the moving party to prove the existence of an arbitration agreement with the opposing party by a preponderance of the evidence." (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164.)

The arbitration agreements are broad and provide in relevant part: "I and Endo Fitness Goleta LLC dba Fitness 19 ("the Company") agree to utilize binding individual arbitration to resolve all disputes that might arise out of or be related in any way to my application for employment and/or employment by the Company. Such disputes include, but are not limited to, claims I might bring against the Company for wrongful termination, discrimination, harassment, retaliation, breach of contract, wage and hour violations, any individual claims under the California Private Attorneys General Act ("PAGA"), and torts such as invasion of privacy, assault and battery, or defamation.

Such disputes also include claims that the Company might bring against me such as, for example, theft of money or trade secrets, breach of a confidentiality agreement, or breach of a contract. I and the Company each specifically waive our respective rights to bring such claims against the other in a court of law and to have a trial by jury. By signing below, I expressly waive the right to bring a class, collective, representative or PAGA claim (unless such waiver is prohibited by controlling law) seeking any relief on behalf of others. ... "My agreement to arbitrate claims against the Company includes claims I might bring against the Company's parent, subsidiaries, affiliates, customers, or client entities as well as against owners, directors, officers, managers, employees, agents, contractors, attorneys, benefit plan administrators, and insurers of the Company or of its parent, subsidiaries, affiliates, customers, or client entities.

I also agree to arbitrate claims pursuant to the terms of this Agreement against any person or entity I allege to be a joint employer with the Company as well as claims brought against staffing companies, employee leasing companies, professional employer organization or payroll processing vendors that the Company has utilized. ... "Any arbitration proceeding under this agreement shall proceed under and be interstate commerce. To the extent they are not contrary to the FAA, the procedures of the California Arbitration Act ("Act") shall also apply.

The Act is found at California Code of Civil Procedure section 1280 and the following sections. Section 1283.05 and all of the Act's other mandatory and permissive rights to discovery shall also apply, and the arbitrator shall have the same authority as a state or federal court would have to issue subpoenas to third parties for production of documents and for depositions, in addition to subpoenas to appear at any arbitration hearing. In any arbitration proceeding under this agreement, all California rules of pleading (including the right of demurrer), all rules of evidence, all rights to resolution of the dispute by means of motions for summary judgment, judgment on the pleadings, and judgment under Code of Civil Procedure Section 631.8 shall apply and be observed, unless I and the Company agree otherwise.

The arbitrator shall have the immunity of a judicial officer from civil liability when acting in the capacity of an arbitrator, which immunity supplements any other existing immunity. . . . ... "If any term or provision or any portion of this agreement is deemed invalid or unenforceable, it shall be severed and the remainder of this agreement shall be enforceable. Under no circumstances shall this agreement be construed to allow the joinder of claims in arbitration or arbitration on a class, collective, representative, or other similar basis.

I acknowledge that this Agreement is not intended to interfere with my rights to collectively bargain, to engage in protected, concerted activity, or to exercise other rights protected under the National Labor Relations Act. "I confirm that I have had time to read this agreement and ask the Company's representative any questions I had about the agreement prior to signing this agreement "MY SIGNATURE BELOW CONFIRMS THE FACT THAT I HAVE READ, UNDERSTAND, AND VOLUNTARILY AGREE TO BE LEGALLY BOUND TO ALL OF THE ABOVE TERMS.

I FURTHER UNDERSTAND THAT THIS AGREEMENT REQUIRES THE COMPANY AND ME TO ARBITRATE ANY AND ALL DISPUTES THAT ARISE OUT OF MY APPLICATION FOR EMPLOYMENT AND EMPLOYMENT EXCEPT AS EXPRESSLY EXCLUDED HEREIN, AND THAT I AND THE COMPANY ARE GIVING UP OUR RIGHTS TO A TRIAL BY JURY." (Hein decl., P. 10 & Exh. B-1.)

The electronic signature of plaintiff is affixed to the document and is dated June 25, 2024. On October 6, 2024, there is an identical agreement electronically signed by plaintiff. (Hein decl., P. 10 & Exh. B-1.) By way of the opposition, plaintiff's counsel argues that: "Mr. Salas unequivocally denies executing the Agreements . . .." (Opp., p. 5, ll. 9-10.) This is a misrepresentation of what plaintiff states. Plaintiff declares: "I do not recall seeing or reading the Dispute Resolution Agreements at the time of my hiring by Defendants in June 2024 or October 2024, or at any time during my employment with Defendants. Nor do I recall electronically signing the Dispute Resolution Agreements at the time of my hiring by Defendants." (Salas decl., P. 3, italics added.) Stating that he does not recall signing documents is much different than "unequivocally" denying that he signed them.

"(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. "(b) The effect of an electronic record or electronic signature attributed to a person under subdivision (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law." (Civ.

Code Sec. 1633.9.) "Civil Code section 1633.9, subdivision (a), governs the authentication of electronic signatures. It provides that an electronic signature may be attributed to a person if " 'it was the act of the person.' " (Civ. Code, Sec. 1633.9, subd. (a).) Further, " '[t]he act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.' " (Ibid.)

For example, a party may establish that the electronic signature was " 'the act of the person' " by presenting evidence that a unique login and password known only to that person was required to affix the electronic signature, along with evidence detailing the procedures the person had to follow to electronically sign the document and the accompanying security precautions. [Citations.]" (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 545.)

By way of declaration, Endo Fitness Goleta's Director of Human Resources, Laurinda Hein, sets forth all of the necessary information regarding her experience in on-boarding employees, the procedures followed relating to hiring procedures and on-boarding new employees, maintenance and storage of personnel records, and, importantly, the manner in which new employees are required to complete on-boarding documents. The declaration leaves little doubt that plaintiff executed the agreements. "[T]he law effectively presumes that everyone who signs a contract has read it thoroughly, whether or not that is true." (Roldan v.

Callahan & Blaine (2013) 219 Cal.App.4th 87, 93) "Of course the mere fact that a contract term is not read or understood by the non-drafting party or that the drafting party occupies a superior bargaining position will not authorize a court to refuse to enforce the contract." (A & M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 486.) "An arbitration clause within a contract may be binding on a party even if the party never actually read the clause." (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

Plaintiff's arguments regarding not remembering signing the agreement, not intending to waive legal rights, and not having the agreement explained to him, are of no consequence in ruling on this motion. Plaintiff signed the agreements and is presumed to know their terms and consequences of doing so. Defendants have met their burden of establishing the existence of an agreement to arbitrate plaintiff's individual claims.

Unconscionability Plaintiff's next argument is that the agreement is procedurally and substantively unconscionable. "The party seeking arbitration bears the initial burden of demonstrating the existence of an arbitration agreement. Once the moving party has satisfied its burden, the litigant opposing arbitration must demonstrate grounds which require that the agreement to arbitration not be enforced." (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 380-381.) "The burden of proving unconscionability rests upon the party asserting it." (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.) "Unconscionable arbitration agreements are not enforceable." (Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242, 1245.) "To be voided on this ground, the agreement must be both procedurally and substantively unconscionable." (Ibid.)

Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power: substantive unconscionability on overly harsh or one-sided results. (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal. 4th 1109.) "But they need not be present to the same degree." (Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at p. 114.) Rather, the court invokes a "sliding scale" to determine unconscionability: "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, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.) Unconscionability is a question of law. (Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1562.)

Most employment related arbitration agreements are procedurally unconscionable because they are presented on a "take-it-or-leave-it" basis. " 'The term [contract of adhesion] signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.' " [Citation.] " 'Arbitration contracts imposed as a condition of employment are typically adhesive.' " [Citation.]" (Davis v.

Kozak (2020) 53 Cal.App.5th 897, 906, disapproved on another ground in Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 505.) "When arbitration is a condition of employment, there is inherently economic pressure on the employee to accept arbitration. This alone is a fairly low level of procedural unconscionability." (Alvarez v. Altamed Health Services Corp. (2021) 60 Cal.App.5th 572, 591.) Thus, plaintiff has shown a low level of procedural unconscionability.

Reviewing the terms of the agreement, the court does not find any substantive unconscionability. The agreement is clear, mutual, and is not overbroad. To the extent that the agreement purports to improperly prohibit plaintiff from bringing a representative PAGA action, those prohibitions are, pursuant to the severability provision, severed. The motion to compel arbitration will be granted.

Remaining PAGA Representative Action An order compelling arbitration of individual claims does not strip plaintiff of standing to litigate non-individual PAGA claims. "Our Supreme Court explained that the representative PAGA claims may be stayed while the individual claims are arbitrated." (Rodriguez v. Lawrence Equipment, Inc. (2024) 106 Cal.App.5th 645, 653, fn. 9.) "T]he existence of an individual PAGA claim in every PAGA action means this claim often may be separately compelled to arbitration where the FAA applies [citation], which may trigger a stay of the litigation of the representative PAGA claim [citation] . . .. (Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001, 1010.) The representative PAGA claims will be stayed pending completion of arbitration.

Class Action Claims Unlike non-individual PAGA claims, under the FAA class action claims are subject to dismissal when individual claims are compelled to arbitration. (see AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333; Epic Systems Corp. v. Lewis (2018) 584 U.S. 497; Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639.) The Class claims will be dismissed.

Tentative Ruling: Simran Khalsa et al vs Michael Humphrey et al Tentative Ruling: Simran Khalsa et al vs Michael Humphrey et al