Pavel Rodl v. Sanas.AI

Case No. 26CV493338 Petition to Compel Arbitration

I. BACKGROUND Plaintiff Pavel Rodl (“Plaintiff”) was an employee of Defendant Sanas. AI (“Defendant”) from January 6, 2025 until his alleged wrongful termination on December 17, 2025. (Complaint at ¶¶ 9, 26). In January 2025, Plaintiff worked on what became “the Verizon opportunity” valued at over $4 million. (Id. at ¶ 11). Plaintiff led more than 40 customer meetings and coordinated the account in connection with the Verizon opportunity. (Ibid.).

Plaintiff alleges that in August 2025, Defendant’s Chief Sales Officer Anant Singh (“Singh”) “unilaterally inserted himself into pricing negotiations.” (Complaint at ¶ 12). At a November 15, 2025 meeting, Singh told Plaintiff that he would not be receiving any commissions on the Verizon opportunity because Plaintiff had lost the deal and the per-license price was too low. (Id. at ¶ 14). Singh further allegedly stated Plaintiff “did not ‘deserve’ any commissions because he was ‘white’, ‘handsome’, ‘well dressed’, and ‘in good shape.’” (Id. at ¶ 18).

Plaintiff complained to Human Resources on December 15, 2025. (Complaint at ¶ 22). Plaintiff alleges that the Vice President of People Saralynn Pizano (Pizano) acknowledged Singh’s behavior as harassment. (Id. at ¶ 24). However, Pizano never conducted any investigation into Plaintiff’s complaints. (Id. at ¶ 25). Two days later, on December 17, 2025, Pizano notified Plaintiff that he was being terminated for “performance reasons.” (Id. at ¶ 26). The Verizon opportunity was reassigned to Singh and closed while Plaintiff was still employed. (Id. at ¶ 27).

Plaintiff filed suit on May 6, 2026. Plaintiff alleges twelve causes of action for: (1) failure to pay wages due under Labor Code section 200 et seq; (2) wage complaint retaliation under Labor Code section 98.6; (3) whistleblower retaliation under Labor Code section 1102.5; (4) racial discrimination under the Fair Employment and Housing Act (“FEHA”); (5) unlawful retaliation under FEHA; (6) failure to investigate discrimination under FEHA; (7) wrongful termination; (8) failure to pay wages at term under Labor Code section 203; (9) failure to produce pay records under Labor Code section 226; (10) failure to produce personnel file under Labor Code section 1198.5; (11) failure to reimburse business expenses under Labor Code section 2802; and (12) unfair competition under Business & Professions Code section 17200.

Defendant now moves to compel arbitration pursuant to the arbitration provision contained in Plaintiff’s offer letter (“the Agreement”). Having considered the Agreement and the circumstances of its execution, the Court will grant the motion and stay this action.

II. LEGAL STANDARD The Federal Arbitration Act (“FAA”) governs the Agreement. The Agreement states, “[t]o the fullest extent permitted by law, you and the Company agree to submit to mandatory binding arbitration, governed by the Federal Arbitration Act (the ‘FAA’)”. (Declaration of Saralynn Pizano, Ex. B at SANAS 000002, emphasis in original). In any event, “[e]mployment contracts, except for those covering workers engaged in transportation, are covered by the FAA.” (EEOC v. Waffle House, Inc. (2002) 534 U.S. 279, 289).

Under the FAA, the court’s role is limited to determining “(1) whether a valid agreement to arbitrate exists, and if it does (2) whether the agreement encompasses the dispute at issue.” (Chiron Corp. v. Ortho Diagnostic Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130). To determine “whether a valid contract to arbitrate exists,” courts apply “ordinary state law principles that govern contract formation.” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1093 [citations omitted]; see also Ingle v. Circuit City Stores, Inc. (9th Cir. 2003) 328 F.3d 1165, 1170). 22

Alternatively, Code of Civil Procedure section 1281.2 provides: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate such controversy, the court shall order the petitioner and respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] The right to compel arbitration has been waived by the petitioner; or [¶] (b) Grounds exist for rescission of the agreement.”

In determining the threshold question of whether an arbitration agreement exists between the parties, the court employs a three-step burden shifting analysis. (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere); Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060). The party seeking to compel arbitration bears the initial burden of showing an agreement to arbitrate. If that burden is met, the burden shifts to the opposing party to show a factual dispute regarding the agreement’s existence. If the opposing party does so, then the burden shifts back to the proponent of arbitration to show the existence of a valid agreement by a preponderance of the evidence. (Iyere, supra, 87 Cal.App.5th at p. 755).

III. ANALYSIS As an initial matter, Appendix A concerning the Multistate Arbitration Chart does not apply under these circumstances. Appendix A is not referenced in the offer letter. Unlike Appendix B, Appendix A is unsigned and there is no space for the parties’ signatures. Furthermore, it does not appear that Plaintiff received a multistate offer letter and this case does not concern multistate litigation for Appendix A to apply. Defendant maintains Appendix A was likely sent to Plaintiff in error. (Motion to Compel Arbitration at p. 11, fn. 1). The arbitration provision in the offer letter is, therefore, the only agreement at issue. For the reasons stated below, the Court concludes the parties have entered into a valid agreement to arbitrate.

Defendant has attached a copy of the Arbitration Agreement electronically signed by Plaintiff on December 15, 2024. (Declaration of Pizano, Ex. B). (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 [noting that it is a moving party’s burden to produce prima facie evidence of an agreement to arbitrate by attaching the agreement to the motion or setting forth its terms verbatim]). Plaintiff’s electronic signature has the same legal effect as a handwritten signature and is express acceptance of an agreement to arbitrate. (Espejo v.

Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060; Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 777). Defendant has set forth the procedures undertaken to authenticate Plaintiff’s signature in the Declaration of Saralynn Pizano. Plaintiff does not dispute that he signed the Agreement. To the extent Plaintiff argues he did not understand the legal significance of the Agreement when he signed it, “[a]n 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, 226). The general rule is that “one who assents to a contract is bound by its provisions and cannot complaint of unfamiliarity with the language.” (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 383).

Additionally, the scope of the Agreement covers Plaintiff’s claims. The Agreement applies to “any and all claims arising out of or related to your employment with the Company and the termination thereof, including but not limited to claims for unpaid wages, wrongful termination, torts, stock or stock options or other ownership interest in the Company, discrimination and/or harassment based upon any federal, state, or local ordinance, statute, regulation or constitutional provision . . . ”. (Declaration of Pizano, Ex.

B at SANAS 000002-000003, ¶ 11). Plaintiff has sued Defendant for violations of the Labor Code including the failure to pay wages and the failure to produce pay records and personnel file. Plaintiff has further sued Defendant for race discrimination and retaliation in violation of FEHA. Plaintiff’s claims arise out of his employment with Defendant and concern the harassing behavior he was subjected to as well as his separation from employment. Thus, Plaintiff’s claims expressly fall within the scope of the Agreement.

Plaintiff does not truly dispute that he signed the Agreement or that the scope of the Agreement covers his claims. Instead, he challenges the enforceability of the agreement by arguing that it is unconscionable.

A. UNCONSCIONABILITY Plaintiff maintains the Arbitration Agreement is unenforceable because it is both procedurally and substantively unconscionable. The party challenging a contractual arbitration provision bears the burden of proving that it is both procedurally and substantively unconscionable. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126 (OTO)). This may be done on a sliding scale, where the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required, and vice versa. (Id. at pp. 125-126).

Nevertheless, both must be shown. Procedural unconscionability focuses on oppression or surprise to the “weaker” party based on unequal bargaining power, whereas substantive unconscionability focuses on the terms of the agreement and whether they are overly harsh or one-sided. (OTO, supra, 8 Cal.5th at pp. 125-129). The Court thus proceeds to consider whether the Agreement is procedurally and substantively unconscionable.

B. PROCEDURAL UNCONSCIONABILITY The circumstances that the court examines to determine whether there was “oppression” in the signing of an agreement generally include: “ ‘(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 [quoting (Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1348]).

The offer letter is a nine-page document with a separate carve out provision for arbitration. (Declaration of Pizano, Ex. B at SANAS 000002-000009). The Agreement is found at paragraph 11 of the offer letter and includes in capitalized letters that “THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.” (Id., Ex. B at 000003, ¶ 11). The end of the offer letter further includes the following disclaimer before the signature line in bold: “I further acknowledge that I have received and read, or have had the opportunity to read, the arbitration agreement herein.

I understand that this arbitration agreement requires that disputes that involve the matters subject to the agreement be submitted to arbitration pursuant to the arbitration agreement rather than to a judge and jury in court.” (Id., Ex. B at SANAS 000004). The Agreement, therefore, draws the relevant terms to Plaintiff’s attention by using bold and capitalized font and is not procedurally unconscionable in this regard. (See cf. Higgens v. Superior Court (2006) 140 Cal.App.4th 1238, 1250-1251 [noting that procedural unconscionability has been found where the presence of an arbitration provision has not been distinguished through bold letting, larger font, or capitalization]).

The Agreement was nevertheless a contract of adhesion offered on a take-it-or-leave-it basis. However, while Plaintiff was required to sign the Agreement as a condition of employment, “the cases uniformly agree that a compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment or offered on a ‘take it or leave it’ basis.” (Lagatree v. Luce (1999) 74 Cal.App.4th 1105, 1127). This type of contract of adhesion in the employment context adds a modest amount of procedural unconscionability and, the amount of procedural unconscionability is increased when the fact of an adhesion contract is combined with other issues. (See Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232, 248).

While Appendix A is not the operative agreement at issue, its inclusion in the onboarding documents is confusing to a layperson. Appendix A includes terms that contradict the Agreement.2 For example, Appendix A provides the

2 Plaintiff argues the following term within the Agreement itself is contradictory: “This agreement to arbitrate does not restrict your right to file administrative claims you may bring before any government agency where, as a 24

arbitration will be held in Palo Alto, California; whereas, the Agreement provides arbitration shall be held in San Francisco, California. (Declaration of Pizano, Ex. B at SANAS 000003,¶ 11; SANAS 000005). As Plaintiff notes, Appendix A also references Labor Code section 432.6. (Id., Ex. B at SANAS 000005). Labor Code section 432.6, subdivision (a) provides “A person shall not, as a condition of employment, continued employment or the receipt of any employment-related benefit, require any applicant for employment to waive any right, forum, or procedural for a violation of any provision of the California Fair Employment and Housing Act . . . or this code.”

However, the Ninth Circuit Court of Appeals has held that the “FAA preempts AB 513 as a whole to the extent it applies to arbitration agreements.” (Chamber of Commerce of the United States v. Bonta (2023) 62 F.4th 473, 490). Thus, Appendix A includes an irrelevant statutory reference, the inclusion of which only causes further confusion for Plaintiff in determining which arbitration provisions apply. The Court does not seek to enforce Appendix A but merely addresses it to note that its inclusion acts as an element of surprise and adds to the Agreement’s procedural unconscionability.

Lastly, Plaintiff argues the execution of the offer letter containing the Agreement was oppressive. Defendant maintains Plaintiff had ample opportunity to review the Agreement and could spend as much time as needed to review its terms. (Declaration of Pizano, at ¶ 11). However, the offer letter expressly states that the offer was sent on December 12, 2024, and was set to expire on December 16, 2024. (Id., Ex. B at SANAS 000001-000004). Thus, Plaintiff had four days to review and sign the offer letter.

On December 14, 2024, Plaintiff’s hiring manager messaged him to check whether he had signed the offer letter yet. (Declaration of Pavel Rodl at ¶ 7, Ex. 2). Plaintiff eventually signed the Agreement on December 15, 2024. (Declaration of Pizano, Ex. A). Plaintiff maintains he had no opportunity to negotiate and wanted to sign quickly to not jeopardize his start date. (Declaration of Rodl, at ¶ 10). However, Plaintiff was a sophisticated Enterprise Account Executive and received the documents electronically rather than in person.

The offer letter invited Plaintiff to “call” with any questions, which he did not do. (Declaration of Pizano, Ex. B at SANAS 000004, ¶ 15). Plaintiff, therefore, had an opportunity to negotiate but chose not to do so.4 The Court does not find these circumstances oppressive.

While a contract of adhesion may render a low degree of procedural unconscionability, the confusion around Appendix A yields a moderate degree of procedural unconscionability.

C. SUBSTANTIVE UNCONSCIONABILITY Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results. (Armendariz Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz)). The court assesses whether the agreement reallocates risks in an objectively unreasonable or unexpected matter. (Jones v. Wells Fargo Bank 112 Cal.App.4th 1527, 1539). “In assessing substantive unconscionability, the paramount consideration is mutuality.” (Pinela v. Neiman Marcus Group, Inc. (2015) 238

matter of law, the parties may not restrict the employee’s ability to file such claims (including, but not limited to, the National Labor Relations Board, the Equal Employment Opportunity Comision and the Department of Labor). However, the parties agree that, to the fullest extent permitted by law, arbitration shall be the exclusive remedy for the subject matter of such administrative claims.” (Declaration of Pizano, Ex. B at SANAS 000003). The Court does not find this term contradictory because claims that have completed the requisite review process must be subsequently brought in arbitration rather than in court. 3 Assembly Bill 51 is codified as Labor Code section 432.6. 4 Plaintiff cites Ali v.

Daylight Transport, LLC (2020) 59 Cal.App.5th 462 for the notion that oppression has been found where an employee has been given between one to four days to sign an arbitration agreement. However, the court’s conclusion there was drawn upon conflicting deposition testimony where the chief financial officer stated he did not know any of the circumstances surrounding the signing of the Agreement. (Id. at p. 475). This supported the evidence that the plaintiffs there were pressured to sign the documents without the opportunity to consult an attorney or negotiate the terms of the agreement. (Ibid.).

The same circumstances are not present here. 25

Cal.App.4th 227, 241 [internal citation and quotation marks omitted]). Arbitration agreements are substantively unconscionable where they lack a “modicum of bilaterality,” “without at least some reasonable justification for such onesidedness based on ‘business realities.’” (Armendariz, supra, 24 Cal.4th at p. 117).

Armendariz instructs that there are “five minimum requirements for the lawful arbitration of such rights pursuant to a mandatory employment arbitration agreement. Such an arbitration agreement is lawful if it ‘(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum. Thus, an employee who is made to use arbitration as a condition of employment “effectively may vindicate [his or her] statutory cause of action in the arbitral forum.” ’ ” (Armendariz, supra, 24 Cal.4th at p. 102).

The Agreement satisfies most of these factors. As Defendant notes, the Agreement adopts and incorporates the JAMS employment arbitration rules (“JAMS Rules”). (Declaration of Pizano, Ex. B at SANAS 000003, ¶ 11). The Agreement provides that arbitration shall be held through JAMS before a single neutral arbitrator. (Ibid.) Discovery is permitted under Rule 17 of the JAMS Rules, which provides, “[t]he Parties shall cooperate in good faith in the voluntary and informal exchange of all non-privileged documents and other information (including electronically stored information (‘ESI’)) relevant to the dispute or claim immediately after commencement of the Arbitration.” (Declaration of Richard D.

Lambert, Ex. B: Rule 17). The Agreement requires the arbitrator to issue a “written decision that contains the essential findings and conclusions on which the decision is based.” (Declaration of Pizano, Ex. B at SANAS 000003, ¶ 11). The Agreement is silent as to the distribution of costs between the parties. However, Defendant does not seem to object to bearing the costs of arbitration. “Thus, in cases where an employer requires an employee to arbitrate his or her claims including statutory claims, the agreement must be interpreted (in the absence of any express terms to the contrary) to require the employer to pay any usual costs associated with arbitration, such as the arbitrator’s fees.” (Fittante v.

Palm Spring Motors, Inc. (2003) 105 Cal.App.4th 708, 719). Accordingly, Defendant shall bear the costs associated with arbitration.

Plaintiff, however, argues the Agreement is substantively unconscionable for lack of mutuality. Plaintiff argues he is required to submit his claims to arbitration, but claims such as non-solicitation, non-competition, and misappropriation of trade secret or confidential information are claims more likely to be brought by Defendant and can be brought in court. (Declaration of Pizano, Ex. B at SANAS 000003, ¶ 11). Plaintiff notes that this is manifested in the Agreement itself as well as in the Mutual Non-Disclosure Agreement signed by Plaintiff as part of his onboarding. (Declaration of Rodl, Ex. 1). “[C]ourts repeatedly have found an employer-imposed arbitration agreement to be substantively unconscionable when it requires the employee to arbitrate the claim her she is most likely to bring, but allows the employer to go to court to pursue the claims it is most likely to bring.” (Carbajal v.

CWPSC, Inc. (2016) 245 Cal.App.4th 227, 248).

However, the injunctive relief carve-out Plaintiff complains of is mutual. The Agreement provide: “[E]ach party may, at its, his or her option, seek injunctive relief in court related to violations of your non-competition and/or non-solicitation obligations in any agreements between you and the Company, if applicable, and/or non-solicitation obligations in any agreements between you and the Company, if applicable, and/or the improper use, disclosure, or misappropriation of a party’s private proprietary, confidential or trade secret information[.]” (Declaration of Pizano, Ex.

B at SANAS 000003, ¶ 11). To the extent Plaintiff argues these are claims Defendant is more likely to bring, “a contract can provide a ‘margin of safety’ that provides the party with superior bargaining strength a type of extra protection for which it has a legitimate commercial need without being unconscionable. [Citation.]” (Armendariz, supra, 24 Cal.4th at p. 117; Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482 [“provisions that allow employers to seek a preliminary injunction outside of arbitration for breach of a confidentiality agreement are not, by themselves unconscionable, simply because they primarily benefit employers”]).

Courts

have found that the protection of valuable trade secrets and proprietary and confidential information from public disclosure is a legitimate commercial need. (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1250). Like the agreement upheld in Santana v. Studebaker Health Care Center LLC (2026) 120 Cal.App.5th 1, 22, the Agreement here does not require Plaintiff to concede irreparable harm, does not waive the bond requirement, and does not relieve either party of the burden to prove the elements of an injunction. In the absence of these additional factors and given the legitimate commercial need expressed by Defendant, the Court does not find this provision of the Agreement to be substantively unconscionable for lack of mutuality.

D. SEVERABILITY “[W]hether to sever is within the trial court’s discretion.” (Navas v. Fresh Venture Foods, LLC (2002) 85 Cal.App.5th 626, 636-637).

“ ‘In deciding whether to sever terms rather than to preclude enforcement of the provision altogether, the overarching inquiry is whether the interests of justice would be furthered by severance; the strong preference is to sever unless the agreement is “permeated” by unconscionability.’ [Citation]. [¶] An agreement to arbitrate is considered ‘permeated’ by unconscionability where it contains more than one unconscionable provision. [Citation]. ‘Such multiple defects indicate a systemic effort to impose arbitration on [the nondrafting party] not simply as an alternative to litigation, but as an inferior forum that works to the [drafting party’s] advantage.’ [Citation].

An arbitration agreement is also deemed ‘permeated’ by unconscionability if ‘there is no single provision a court can strike or restrict in order to remove the unconscionable taint from the agreement.’ [Citation]. If ‘the court would have to in effect, reform the contract, not through severance or restriction, but by augmenting it with additional terms,’ the court must void the entire agreement.” (Mango v. The College Network, Inc. (2016) 1 Cal.App.5th 277, 292). (De Leon v. Pinnacle Property Management Services, LLC (2021) 72 Cal.App.5th 476, 492-493).

The offer letter contains a severability clause: “The provisions of this offer letter are severable, and if any part of it is found to be invalid or unenforceable, including, but not limited to, the arbitration provision above, the other parts shall remain fully valid and enforceable.” (Declaration of Pizano, Ex. B at SANAS 000004, ¶ 14). “[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). The Court has found Appendix A to be the single indicia of unconscionability. The Court may, without doubt, sever Appendix A from the entirety of the Agreement to avoid confusion concerning the Agreement’s applicability. In so doing, the Court would not be augmenting the Agreement by adding new terms. The purpose of the Agreement is for the parties to arbitrate disputes arising out of their employment relationship, while permitting injunctive relief related to certain claims for which Defendant has expressed a legitimate commercial need.

The severance of Appendix A will not frustrate this purpose. Accordingly, the Court severs Appendix A from the offer letter, such that paragraph 11 of the offer letter remains the only valid agreement to arbitrate.

For these reasons, the motion to compel arbitration is GRANTED. This action is STAYED in its entirety pending the outcome of arbitration. (Code Civ. Proc. § 1281.4; 9 U.S.C. § 3).

IV. CONCLUSION Based on the foregoing, the motion to compel arbitration is GRANTED. This action is STAYED in its entirety pending the outcome of arbitration.

The Court will prepare the formal order.

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