Farraj vs. LBC Limited Partnership

Superior Court of the State of California County of Orange

DEPT C13 TENTATIVE RULINGS

The Honorable Nico A. Dourbetas

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Date: September 4, 2026

1 Farraj vs. LBC Limited Motion to Compel Arbitration Partnership

2025-01518015 Defendants LBC Limited Partnership, LLC, Josh Hillsberg, Bobby Huq, and Christine Tran’s Motion to Compel Arbitration is GRANTED.

Defendants move to compel Plaintiff Farah Farraj to arbitration based on an arbitration agreement she signed at the start of her employment as a Sales Associate with LBC

Limited Partnership, LLC (“LBC”) dba Mathis Brothers Furniture.

The parties do not dispute the FAA governs the arbitration agreements.

“Under the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.), a written agreement to arbitrate ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract ....’ (9 U.S.C. § 2.) Unless an exception applies, if the matter is arbitrable, the court “shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement ....” (9 U.S.C. § 3.) [I]n ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute.

General principles of California contract law guide the court in making this determination. The party seeking arbitration bears the burden of proving the existence of an 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. (Little v. Pullman (2013) 219 Cal.App.4th 558, 565.)

Existence of Arbitration Agreement

Under Code of Civ. Proc. §1281.2, the first thing the Court must decide is whether there was an agreement to arbitrate, a meeting of the minds. (Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164, 1169.) This analysis is no different under the Federal Arbitration Act (“FAA”) – there must be an agreement in writing to submit a controversy to arbitration. (9 U.S.C.A. § 2.)

“In determining the existence of an agreement to arbitrate, the trial court must employ a three-step burden shifting process. The party seeking to compel arbitration bears an initial burden to show an agreement to arbitrate; that burden can be met by providing a copy of the alleged agreement. If that initial burden is met, the burden shifts to

the party opposing arbitration to identify a factual dispute as to the agreement's existence, thereby shifting the burden back to the arbitration proponent. At that point, and “[b]ecause the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence.” (Garcia v. Stoneledge Furniture LLC (2024) 102 Cal.App.5th 41, 51 [cleaned-up].)

Defendants have attached a “Mutual Agreement to Arbitrate Claim” executed by Plaintiff on December 7, 2021 (the “Agreement”). Thus, Defendants have met their initial burden to show an agreement to arbitrate. The burden now shifts to Plaintiff to identify a factual dispute as to the agreement’s existence.

In Opposition, Plaintiff contends the Agreement is unenforceable because while she was initially hired by LBC in December 2021, her employment ended around early 2023 as she was unable to return to work following her FMLA leave. (Farraj Decl., ¶¶ 2, 3.) Plaintiff was subsequently rehired around April 2023, and she did not sign another arbitration agreement. (Farraj Decl., ¶ 3.) The alleged wrongful conduct occurred after she was promoted to Sales Manager in April 2024. (Complaint, ¶¶ 11-14.) Thus, there is no arbitration agreement that covers Plaintiff’s claims.

In Vasquez v. SaniSure (2024) 101 Cal.App.5th 139, the court found that an employee’s revoked her agreement to arbitrate by terminating her employment with the defendant. (Id. at 144.) The plaintiff did not sign a second set of arbitration agreements during her second stint of employment. The court found that for the plaintiff’s claims to be subject to arbitration, the defendant must show that the parties agreed that the agreements the plaintiff signed during her first stint of employment would apply to her second, e.g. a subsequent agreement that her getting rehired was

contingent on agreement to arbitration. (Id. at 144-145.)

Here, Plaintiff contends there was no mention of an arbitration agreement when she was rehired or any statement by Defendants indicating that the previous arbitration agreement was to apply to her second employment stint. (Farraj Decl., ¶ 4.)

On reply LBC argues “Plaintiff’s personnel file confirms Plaintiff executed a second Mutual Agreement to Arbitrate Claims on April 7, 2023.” (Reply at p.2:6-10.) But Defendants did not submit as evidence the alleged April 7, 2023, agreement with their moving papers, nor did they argue the existence of such an agreement. Defendants only produced the April 2023 agreement when they filed their reply papers.

The motion was continued to allow Plaintiff the opportunity to respond to the April 2023 agreement, which the Court has agreed to consider.

Plaintiff argues the internal date format creates a factual dispute regarding when the 2023 agreement was signed. The 2021 agreement’s signature page is dated 12/7/21, which is read as December 7, 2021 – a MM/DD/YYYY format. On the other hand, the 2023 agreement indicates it was executed on 7/4/23 using a DD/MM/YYYY format, to arrive at April 7, 2023, which aligns with Plaintiff’s rehire date. If the MM/DD/YYYY format is used, the date would actually read 7/4/23, which is a federal holiday when no onboarding would occur. Plaintiff’s declaration states that when she writes a date she writes it in the format of MM/DD/YYYY as the first arbitration agreement reads.

Plaintiff argues that Defendants’ failure to address this discrepancy fatally undermines the authenticity of the 2023 agreement and when it was actually executed.

In response to Plaintiff’s argument, Defendants argue the date format does not

create a genuine authenticity dispute. The date was placed on the agreement by Plaintiff. However whether, the date is interpreted – 7/4/23 or 4/7/23 – it does not affect the year, the authenticity of Plaintiff’s signature, the existence of the agreement, or the fact that it covers the claims brought by Plaintiff. In Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, the court held that “[i]f a party confronted with his or her handwritten signature on an arbitration agreement is unable to allege that the signature is inauthentic or forged, the fact that the person does not recall signing the agreement neither creates a factual dispute as to the signature’s authenticity nor affords an independent basis to find that a contract was not formed.” (Id. at 758.)

Although Plaintiff initially declared that she did not sign another arbitration agreement when she was rehired in April 2023, when presented with the 2023 agreement and the opportunity to challenge the authenticity of it, she does not deny signing it. Plaintiff does not deny the signature or the handwritten date on the 2023 agreement is in her handwriting. As stated in Iyere, an individual normally can recognize or disavow a handwritten signature that purports to be her own. (Ibid.) If Plaintiff did not sign the 2023 agreement, she had ample opportunity to disavow the signature. But she has not.

Although Plaintiff contends she has not been able to conduct discovery to challenge the authenticity of the 2023 agreement, such argument is without merit. If Plaintiff believes the signature on the 2023 agreement was forged, then she should have stated that in her declaration.

Plaintiff next argues that the declaration of Charles Folkner constructs an elaborate employment narrative—a leave of absence beginning January 1, 2023, exhaustion of FMLA/CFRA benefits, a voluntary resignation on February 14, 2023, and a rehire on April 7, 2023—yet not a single one of these

assertions is corroborated by any contemporaneous business record.

Again, such argument is without merit. Plaintiff’s declaration filed in opposition to the motion attests as follows: “I was initially hired in December 2021 and subsequently in around early 2023, my employment ended as I was unable to return to work following her [sic] FMLA leave. I was subsequently rehired in or around April 2023 and I did not sign any arbitration agreement when I was rehired.” (Farraj Decl., ¶¶ 2,3.) Thus, Plaintiff’s claim of some made up narrative is contradicted by her own declaration which confirms she was unable to return to work following her leave and then rehired in April 2023.

Based on the foregoing, the Court finds that Plaintiff has failed to identify a factual dispute as to the April 2023 arbitration agreement. Therefore, Defendants have sustained their burden in demonstrating an agreement to arbitrate.

EFAA

Plaintiff opposes the motion on the grounds that (1) the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) prohibits compelling arbitration, and (2) the arbitration agreement is unconscionable.

The EFAA states in part at 9 U.S.C. § 402(a), “at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute. . . no predispute arbitration agreement or predispute jointaction waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.”

“The term ‘sexual assault dispute’ means a dispute involving a nonconsensual sexual act or sexual contact.” (9 U.S.C. § 401(3).) “The term ‘sexual harassment dispute’ means a dispute relating to conduct that is alleged to constitute sexual harassment under

applicable Federal, Tribal, or State law.” (9 U.S.C. § 401(4).)

Under the EFAA, when a plaintiff’s lawsuit contains at least one claim that fits within the scope of the act, the arbitration agreement is unenforceable as to all claims asserted in the lawsuit. (Liu v. Miniso Depot CA, Inc. (2024) 105 Cal.App.5th 791, 800.)

There are no allegations of a “sexual assault dispute” in the Complaint. Thus, the inquiry is whether Plaintiff’s Complaint has stated a valid “sexual harassment dispute” under applicable Federal, Tribal or State Law.

Under California’s Fair Employment and Housing Act (“FEHA”) a hostile work environment sexual harassment requires a plaintiff employee to show: (1) he or she was subjected to unwelcome sexual advances, conduct or comments; (2) the harassment was based on sex; and (3) the harassment was sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment. (Lyle v. Warner Brothers (2006) 38 Cal.4th 264, 279.)

“[C]laims for sexual discrimination and sexual harassment are distinct causes of action, each arising from different provisions of the FEHA.” (Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 705; Miller v. Dep't of Corr. (2005) 36 Cal.4th 446, 460 n.5.) While the two theories may “overlap as an evidentiary matter,” (Id. at 709), FEHA differentiates them in substance: Discrimination refers to bias in the exercise of official actions on behalf of the employer [e.g., assignments, discipline, scheduling, management decisions], and harassment refers to bias that is expressed or communicated through interpersonal relations in the workplace [i.e., hostile or abusive conduct that targets an employee because of sex]. (Id. at 707.)

The allegations of alleged harassment in paragraph 16 of the Complaint, predominantly describe assignments, discipline, and management decisions, not

interpersonal hostility “because of sex.” Plaintiff does not allege any sexualized conduct of the kind required to state a sexual harassment claim such as unwelcome sexual advances, requests for sexual favors, and other verbal, physical, or visual conduct of a sexual nature.

Plaintiff cites to Roby v. McKesson (2010) 47 Cal.4th 686, arguing that sexual harassment may be inferred through subtle discrimination. In Roby, the plaintiff offered evidence that her supervisor would announce to the office that she was “absent again,” ignore her at staff meetings, and make demeaning comments, gestures and facial expressions in response to the plaintiff’s body odor and arm sores which were caused by a medical condition. The court found that such evidence was sufficient to support the jury’s conclusion that the supervisor harassed the plaintiff in violation of the FEHA.

Here, there is no single actor involved in the alleged misconduct or any pattern of hostile interactions in the workplace. The comments cited by Plaintiff were made by both male and female co-workers, and most had nothing to do with Plaintiff’s sex, but comments about her competency and/or interpersonal disputes. While she alleges employees would undermine her authority and one called her “weak” and stated “she doesn’t know what she is doing,” these examples demonstrate at most rude behavior but do not indicate they were motivated by some discriminatory animus.

Similarly, a female’s employee’s statement that she could not “handle working with a woman manager” and could not “take that my manager is a woman,” while offensive, do not establish some discriminatory animus versus the musings of another employee. “[A]nnoying or ‘merely offensive’ comments in the workplace are not actionable...” (Lyle, supra, 38 Cal.4th at 283.) The mere fact that words may have sexual content or connotations, or discuss sex is not sufficient to establish sexual harassment. (Id. at 279-280.)

Moreover, the allegations in the Complaint do not demonstrate the behavior complained of was pervasive. “With respect to the pervasiveness of harassment, courts have held an employee generally cannot recover for harassment that is occasional, isolated, sporadic, or trivial; rather, the employee must show a concerted pattern of harassment of a repeated, routine, or a generalized nature.” (Lyle v. Warner Bros. Television Prod. (2006) 38 Cal.4th 264, 283-284.) In this case, Plaintiff has not alleged a repeated pattern of harassment as occurred in Roby. Nothing more is alleged than a few off hand comments and incidents, not an ongoing pattern of comments or shunning.

Therefore, Plaintiff has not stated a claim for sexual harassment and the EFAA does not preclude compelling this case to arbitration.

Unconscionability

Procedural and substantive unconscionability “must both be present in order 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 Servs., Inc. (2000) 24 Cal. 4th 83, 114, 6 P.3d 669, 690.) However, they need not be present in the same degree. (Ibid.) A sliding scale approach is used and the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required. (Ibid.) “The party resisting arbitration bears the burden of proving unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Mkt. Dev. (US), LLC (2012) 55 Cal. 4th 223, 247.)

a. Procedural Unconscionability

“Procedural unconscionability focuses on the elements of oppression and surprise.” (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal. App. 4th 165, 177.) “Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice. Surprise involves the extent to which the terms of the

bargain are hidden in a prolix printed form drafted by a party in a superior bargaining position.” (Ibid.) “[A] finding of procedural unconscionability does not mean that a contract will not be enforced, but rather that courts will scrutinize the substantive terms of the contract to ensure they are not manifestly unfair or one-sided.” (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244.)

Plaintiff argues the arbitration agreement is procedurally unconscionable because it was exclusively drafted by Defendant and Plaintiff lacks sophistication to understand and appreciate the terms of the contract terms.

Plaintiff, however, was not a low level employee. She was a Sales Manager for Defendant, which suggest some level knowledge, including the ability to read. If Plaintiff did not understand what an arbitration agreement meant, the agreement states in bold print “EMPLOYEE FURTHER ACKNOWLEDGES THAT EMPLOYEE HAS BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH LEGAL COUNSEL OF HIS/HER OWN CHOOSING AND HAS AVAILED HIMSELF/HERSELF OF THAT OPPORTUNITY TO THE EXTENT EMPLOYEE WISHES TO DO SO.”

Thus, the degree of procedurally unconscionability is low and only due to the fact that it was drafted by Defendant, not Plaintiff’s purported lack of sophistication.

b. Substantive Unconscionability

“Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create ‘overly harsh’ or ‘onesided’ results.’” (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 177.) “A contract term is not substantively unconscionable when it merely gives one side a greater benefit; rather, the term must be ‘so one-sided as to ‘shock the conscience.’” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 246.)

Plaintiff cites to Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, wherein the California Supreme Court allegedly stated “it appears the real purpose of the agreement is to subject the employee to arbitration as a means of maximizing employer advantage. (Id. at 495; see Opp., p. 13.)

A reading of Ramirez, however, does not reveal such a statement. Rather, the full quote is as follows: “If the arbitration system established by the employer is indeed fair, then the employer as well as the employee should be willing to submit claims to arbitration. Without reasonable justification for this lack of mutuality, arbitration appears less as a forum for neutral dispute resolution and more as a means of maximizing employer advantage. Arbitration was not intended for this purpose.” (Ibid.)

Plaintiff does not argue the arbitration agreement lacks mutuality. In fact, the agreement states: “The Parties mutually consent to the resolution by arbitration of all claims or controversies (claims), past, present or future, relating to or arising out of the Employee s employment, remuneration or termination, that Employee may have against the Company or any of its related entities, or its owners, directors, officers, managers, employees, or agents; and all claims that the Company may have against Employee.” Therefore, the agreement is not substantively unconscionable.

Based on the foregoing, the Court finds the 2023 arbitration agreement is not unconscionable.

Accordingly, the motion to compel arbitration is GRANTED and the action is stayed pending completion of the arbitration.

***ADR Status Review set for August 2, 2027 at 9 AM.

Moving Parties shall give notice of all the above.