Shandrell Codling and Jonathan Blackwell v. DO & CO Los Angeles, Inc.

(Spring Street Courthouse: Dept. 1) August 24, 2026 DEPARTMENT 1 LAW AND MOTION RULINGS Case Number: 25STCV32365 Hearing Date: August 24, 2026 Dept: 1 MOTION TO COMPEL ARBITRATION Moving Party: Defendant DO & CO Los Angeles, Inc. (Jackson Lewis PC) Responding Party: Plaintiffs Shandrell Codling and Jonathan Blackwell (Wilshire Law Firm) Ruling: Motion to compel arbitration is DENIED. This is a wage and hour putative class action. Plaintiffs Shandrell Codling and Jonathan Blackwell (Plaintiffs) allege that they and others were employed by defendant DO & CO Los Angeles, Inc. (Defendant), during which employment Defendant committed various violations of labor law.

Defendant moves to compel Plaintiffs' claims to arbitration pursuant to an arbitration agreement (the Arbitration Agreement, or simply Agreement) they purportedly signed. LEGAL STANDARDS Code of Civil Procedure section 1281.2 states, in relevant part:¿ On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists....¿ "There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate." (Engineers & Architects Assn. v.

Community Development Dept. ¿(1994) 30 Cal.App.4th 644, 653.) On the other hand, once an enforceable arbitration agreement has been found, "[d]oubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of arbitration[,]" and the law favors such agreements. (Vianna v. Doctors' Management Co. ¿(1994) 27 Cal.App.4th 1186, 1189; see also People v. Maplebear Inc. (2022) 81 Cal.App.5 th 923, 930-931.)¿ ¿¿ "The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.

In these summary proceedings, 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." (Giuliano v. Inland Empire Personnel, Inc. ¿(2007) 149 Cal.App.4th 1276, 1284.)¿¿The movant may bear its initial burden "by attaching a copy of the arbitration agreement purportedly bearing the opposing party's signature." (Iyere v. Wise Auto Group (2023) 87 Cal.App.5 th 747, 755 (Iyere); Espejo v.

Southern California Permanente Medical Group (2016) 246 Cal.App.4 th 1047, 1060.) "At

this step, a movant need not 'follow the normal procedures of document authentication' and need only 'allege the existence of an agreement and support the allegation as provided in [Rules of Court, Rule 3.1330].'" (Iyere, supra, 87 Cal.App.5 th at 755; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4 th 215, 219 (Condee).) "The party opposing arbitration has the burden of demonstrating that an arbitration clause cannot be interpreted to require arbitration of the dispute. Nonetheless, this policy does not override ordinary principles of contract interpretation.

The contractual terms themselves must be carefully examined before the parties to the contract can be ordered to arbitration: Although [t]he law favors contracts for arbitration of disputes between parties, there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate." (Rice v. Downs ¿(2016) 247 Cal.App.4th 1213, 1223, citations and quotations omitted.)¿¿¿ "A party seeking to enforce an arbitration agreement has the burden of showing FAA preemption." (Lane v.

Francis Capital Management, LLC (2014) 224 Cal.App.4th 676, 687; see also Nixon v. AmeriHome Mortgage Company, LLC (2021) 67 Cal.App.5 th 934, 946 ["The party seeking to enforce the arbitration agreement also bears the burden of establishing the FAA applies and preempts otherwise governing provisions of state law or the parties' agreement."].) DISCUSSION Plaintiffs do not dispute that they signed the Agreement, or that if enforceable the Agreement would apply to all their claims in this litigation.

They contend instead that the FAA does not apply, and under the CAA the Agreement may not be enforced, or alternatively, that the Agreement is unconscionable. Because the unconscionability argument would void the entire Agreement and moot the FAA issue if successful, the Court will address it first. I. UNCONSCIONABILITY Unconscionability is a valid defense to a petition to compel arbitration. (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1143 (Sonic-Calabasas A).) State law governs the unconscionability defense. (Doctor's Assocs., Inc. v.

Casarotto (1996) 517 US 681, 687.) The core concern of the unconscionability doctrine is the "absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party." (Sonic-Calabasas A, Inc., 57 Cal.4th at 1145.) The unconscionability doctrine ensures that contracts--particularly contracts of adhesion--do not impose terms that have been variously described as overly harsh, unduly oppressive, so one-sided as to shock the conscience, or unfairly one-sided. (Id.)

The prevailing view is that procedural and substantive unconscionability must both be present for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz).) But they

need not be present to the same degree; the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to conclude that the term is unenforceable, and vice versa. (Id.) However, when there is no other indication of procedural oppression other than the adhesive aspect of an agreement, the degree of procedural unconscionability is low. (Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704 (Serpa).) A. Procedural Unconscionability "A procedural unconscionability analysis 'begins with an inquiry into whether the contract is one of adhesion.' [Citation.]

An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power 'on a take-it-or-leave-it basis.'" (OTO, LLC v. Kho (2019) 8 Cal.5th 111, 126 (OTO).) "Arbitration contracts imposed as a condition of employment are typically adhesive[.] The pertinent question, then, is whether circumstances of the contract's formation created such oppression or surprise that closer scrutiny of its overall fairness is required." (Ibid. [Citations omitted].) "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." (Ibid. [Citations omitted].) "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." (OTO, supra, 8 Cal.5 th at 127 [Citation omitted].) "[I]n the case of preemployment arbitration contracts, 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." (Armendariz, supra, 24 Cal.4 th at 115.)

Plaintiffs contend that the Agreement is procedurally unconscionable because it was a contract of adhesion, and indeed a mandatory condition of employment. (See Avalos Decl., Ex. A, p. 2 ["DO & CO requires all applicants and all new employees to sign a separate arbitration agreement, including a class action waiver. Before any application is considered, and again before any offer of employment is made, DO & CO will verify that a current arbitration agreement is on file. Please review and accept the arbitration agreement provided with this application.

Please do not submit this application without the signed arbitration agreement; it will not be considered. "]) On reply, Defendant does not refute these facts but simply notes that the Agreement was clearly labeled and not confusingly worded. The adhesive nature of the Agreement and that it was a mandatory condition to obtain employment all establish some procedural unconscionability. (See OTO, supra, 8 Cal.5 th at 126; Armendariz,

supra, 24 Cal.4 th at 115.) B. Substantive Unconscionability Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create an overly harsh or one-sided result. (Armendariz, supra, 24 Cal.4th at 114.) Where provisions of the arbitration contract are unconscionable, courts may sever or restrict the operation of those provisions. (Id. at 124.) Where the "central purpose of the contract is tainted with illegality," then severance is not appropriate, and the contract should be voided. (Ibid.)

Where "multiple defects indicate a systematic effort to impose arbitration on an employee not simply as an alternative to litigation, but as an inferior forum that works to the employer's advantage[,]" voiding the contract rather than severing the unconscionable provisions is appropriate. (Ibid.) "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.'" (OTO, supra, 8 Cal.5 th at 130.)

Plaintiffs contend the Agreement is substantively unconscionable because it lacks mutuality, in that it obligates Plaintiffs to arbitrate against a number of third parties; the accompanying confidentiality agreement non-mutually permits Defendant, but not Plaintiffs, to seek relief in Court; the Agreement contains an unlawful non-compete clause; and the Agreement contains a blanket representative action (i.e. PAGA) waiver.

1. Lack of Mutuality in Covered Parties The Agreement provides: 4 SCOPE (4.1) Claims Covered: This Agreement to submit to individual, binding arbitration: (i) Includes all claims within the scope of Section (2.1), whether made against you, against DO & CO, or against any of the following third-party beneficiaries of this Agreement: (a) DO & CO's parent, subsidiary, or affiliated entities; or (b} DO & CO's individual agents, officers or directors (in an official or personal capacity); or (c) any insurer of any of the parties in (a) and (b), to the extent such insurer is insuring or defending a claim subject to this Agreement. (See Avalos Decl., Ex. A, p. 4.) Plaintiff contends that this is overbroad in the same fashion as in Cook v. University of Southern California (2024) 102 Cal.App.5th 312 (Cook). There, the agreement required the arbitration of all claims, whether or not arising out

of Employee's University employment, remuneration or termination, that Employee may have against the University or any of its related entities, including but not limited to faculty practice plans, or its or their officers, trustees, administrators, employees or agents, in their capacity as such or otherwise; and all claims that the University may have against Employee. (Id. at 321.) The Court of Appeal found that the broad scope of this clause could be justified "if there is a legitimate commercial need for doing so" but "unless the 'business realities' that give rise to that special need are explained in the contract itself" or "factually established" in the motion to compel arbitration, such an agreement could be substantively unconscionable. (Id. at 324-325.)

On reply, Defendant correctly notes that overbreadth of the Agreement at bar is not as significant as in Cook, where the agreement was additionally not limited to employment claims and so could lead to all sorts of absurdities. (See Cook, supra, 102 Cal.App.5 th at 321.) That said, it is still a one-sided provision allowing third parties affiliated with Defendant to benefit under the Agreement despite not providing Plaintiff any consideration of their own. This furnishes a small amount of substantive unconscionability.

2. Lack of Mutuality in the Confidentiality Agreement Plaintiff presents a Confidentiality Agreement which provides: Because any violation of this Letter-Agreement could cause injury to the Employer and/or others, which cannot be adequately compensated by money damages and/or could cause damages that are incapable of adequate of adequate calculation, if the employer believes that I have breached this agreement, then it may seek temporary and/or permanent equitable relief from a Court, including an injunction, in addition to any other available relief. (Bils Decl., Ex. 2 [Confidentiality Agreement], p. 2.)

Plaintiff contends that the Confidentiality Agreement is properly read with the Arbitration Agreement, such that unconscionable terms in the former count against the enforceability of the latter. Plaintiffs rely on Alberto v. Cambrian Homecare (2023) 91 Cal.App.5 th 482, which provides: "'Under Civil Code section 1642, it is the general rule that several papers relating to the same subject matter and executed as parts of substantially one transaction, are to be construed together as one contract [citation].' " [Citation.]

According to that rule, documents executed as part of a single transaction are construed together, even if they do not expressly refer to one another. [Citations.] Here, we have no difficulty concluding that the Arbitration Agreement and the Confidentiality Agreement should be read together. They were executed on the same day. They were both separate aspects of a single primary transaction--Alberto's hiring. They both governed, ultimately, the same issue--how to resolve disputes arising between

Alberto and Cambrian arising from Alberto's employment. Failing to read them together artificially segments the parties' contractual relationship. Treating them separately fails to account for the overall dispute resolution process the parties agreed upon. (Id. at 490-491.) Plaintiff Blackwell signed the Arbitration Agreement and Confidentiality Agreement on the same day, while plaintiff Codling signed the Arbitration Agreement first, and then the Confidentiality Agreement nearly three weeks later. (See Bils Decl., Ex. 2, p. 2 [12/20/2023 Codling Signature]; Ex. 3 [5/15/24 Blackwell Signature]; Avalos Decl., Ex.

B, p. 6 [5/6/24 Blackwell Signature]; Ex. C, p. 11 [11/30/2023 Codling Signature].) Although there was a significant delay between plaintiff Codling's signatures, it appears based on plaintiff Blackwell's same-day signatures and the lack of any counterargument that the two documents were part of the same transaction as to both Plaintiffs. In Alberto, the Court of Appeal found substantive unconscionability where a simultaneously executed confidentiality agreement allowed the employer to obtain an "immediate" injunction outside of arbitration for a breach of confidentiality requirements, including an agreement to consent to such an injunction and a waiver of the bond requirement. (Alberto, supra, 91 Cal.App.5 th at 492.)

The Court found that these provisions exceeded the "legitimate 'margin of safety' for the employer and are not mutual." (Ibid.) The Confidentiality Agreement here is non-mutual, in that it allows Defendant to go to court to "seek temporary and/or permanent equitable relief..., including an injunction, in addition to any other available relief" if Defendant believes Plaintiffs have breached it. (See Bils Decl., Ex. B, p. 2.) Defendant's reply rejects the clear holding of Alberto that one-sided provisions in a separate agreement that is part of the same transaction may create substantive unconscionability, and incorrectly states that "the cases Plaintiffs rely upon involved provisions that were within the arbitration agreement itself [.]" (Reply, p. 7, emphasis added.)

This is simply incorrect: Alberto involved, as here, a separate confidentiality agreement read together with the arbitration agreement. (See Alberto, supra, 91 Cal.App.5 th at 486.) That said, the Confidentiality Agreement at bar does not contain the other troublesome characteristics of the Alberto agreement, such as requiring Plaintiffs to consent to an injunction or waiving Defendant's obligation to post an injunction bond. Plaintiff has shown a small amount of substantive unconscionability on this point.

3. Non-Compete/Non-Solicitation Clause in Confidentiality Agreement The Confidentiality Agreement provides: While I am employed by the Employer, and for a period of one year thereafter, I will not, directly or indirectly, for my own or any third party's benefit, induce, solicit or attempt induce or

solicit (a) any customer or supplier of the company to cease doing business with it, or to limit the amount of business that it is doing or will do with it; (b) any employee of the Employer to leave such employment or to become employed by me or any third party. (Bils Decl., Ex. 2, p. 2.) Plaintiffs contend that this clause violates Bus. & Prof. Code Sec. 16600, which it plainly does. (See Edwards v. Arthur Andersen LLP (2008) 44 Cal.4 th 937, 948 [agreement forbidding plaintiff from soliciting clients of the employer for a year after termination was invalid as a matter of law].)

Defendant does not deny this, but as with the injunctive relief clause, simply contends that the clause is not in the Arbitration Agreement itself, but the Confidentiality Agreement. Since Defendant does not dispute that Alberto requires these documents to be read together, this is a meaningless point. Defendant's contention that the clause may be severed does not establish it is valid, and on the contrary, suggests it is indeed not valid. This adds some substantive unconscionability.

4. PAGA Waiver The Arbitration Agreement provides: 3 CLASS-ACTION WAIVER (3.1) Arbitration will proceed on an individual basis, and only individual relief can be awarded. Neither Party shall have the right to participate in, or to receive money, or receive any other relief, from any class, collective, or representative proceeding based on claims covered by this Agreement. (Avalos Decl., Ex. A, p. 4; Ex. B, p. 2.) By providing that Plaintiffs may not participate in any representative action "based on claims covered by this Agreement," which includes claims "arising out of, or relating to your employment relationship with [Defendant]," this waiver necessarily includes any claims under the Private Attorneys General Act (PAGA), all of which are representative (as they are prosecuted by individuals merely as proxies for the State of California). (See Kim v.

Reins International California, Inc. (2020) 9 Cal.5 th 73, 87 (Kim).) Defendant's response to this is again a red herring, stating that the FAA requires enforcement of agreements to arbitrate individual PAGA claims. While it may be that employers may compel "individual PAGA claims" to arbitration so long as those claims fall within the arbitrability clause of the agreement, neither Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639 (Viking River) nor any other law provides that it is lawful or conscionable to require waiver of all representative claims, including any PAGA claims. "Both before and after Viking River Cruises, blanket waivers of PAGA claims are unconscionable." (Alberto, supra, 91 Cal.App.5 th at 495.)

Defendant's suggestion that "Plaintiffs' individual PAGA claims, if any, may be compelled to arbitration" ignores the fact that the Agreement forecloses them from bringing any representative claims at all. There is no way to

interpret the waiver of representative claims in such a way that would allow Plaintiffs to prosecute individual PAGA claims in arbitration, let alone maintain non-individual PAGA claims in court, because all of these claims are representative claims. The PAGA waiver is unconscionable. C. Unconscionability Summary Plaintiff has shown some procedural unconscionability and oppression stemming from the mandatory and adhesive nature of the Agreement and its employment context. Plaintiff has shown a significant amount of substantive unconscionability arising from numerous defects, namely the breadth of Defendant-affiliated parties given a non-mutual benefit under the Agreement, the carve-out in the Confidentiality Agreement allowing Defendant to bring confidentiality claims against Plaintiffs in court, the unlawful non-solicitation clause in the Confidentiality Agreement, and the waiver of all participation in representative actions.

While a court "may liberally sever any unconscionable portion of a contract and enforce the rest" where it would be in the interests of justice to do so (see Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5 th 478, 517), that is not the case here, as these numerous defects bespeak an effort to impose arbitration "as an inferior forum that works to the employer's advantage." (Armendariz, supra, 24 Cal.4th at 124.) The Court will not enforce the Agreement. CONCLUSION For the foregoing reasons, the motion is DENIED.

Plaintiffs to give notice. Case Number: JCCP5252 Hearing Date: August 24, 2026 Dept: 1 Final Approval of Class Action Settlement Department SSC-1 Hon. Theresa M. Traber Sunwest Wage and Hour Cases Case No.: JCCP5252 Hearing Date: August 24, 2026 TENTATIVE RULING The Court hereby GRANTS final approval and awards/approves the following: (1) $400,000 (33 1/3%) for attorney fees to Class Counsel, The Nourmand Law Firm, APC, Lavi & Ebrahimian, LLP, and Lawyers for Justice, PC; (2) $ 77,396.69 for attorney costs to Class Counsel; (3) enhancement payments of $ 10,000 each to the class representatives, Juan Soto, Marvin Harris and Anthony Cruz; (4) $75,000 (75% of $100,000 PAGA penalty) to the LWDA; and (5) $14,500 for settlement administration costs to CPT Group, Inc.

Plaintiffs' counsel shall file a proposed Order and Judgment, consistent with this ruling containing all requisite terms, including the class definition, release language, and a statement that no class members requested exclusion. The Court orders class counsel to file a final report summarizing