Edmiston, individually, and on behalf of other similarly situated employees v. Weatherford Motors, Inc.

If the opposing party meets the burden of producing sufficient evidence, the third step requires the party seeking arbitration to prove by a preponderance of the evidence that the parties formed a valid contract to arbitrate their dispute.” (Ibid. [citations omitted].) 25CV144036: EDMISTON, INDIVIDUALLY, AND ON BEHALF OF OTHER SIMILARLY SITUATED EMPLOYEES vs WEATHERFORD MOTORS, INC. 05/29/2026 Hearing on Motion to Compel Arbitration filed by WEATHERFORD MOTORS, INC. (Defendant) CRS# 043404420899 in Department 18

DISCUSSION

Existence of an Agreement to Arbitrate

Defendant produced arbitration agreements bearing Plaintiff’s signature from April 2021, when he was hired, and May 2024, when Defendant revised its arbitration agreement. (Notice Errata, Quiocho Decl., Exs. A, B.) The more recent agreement supersedes the first. (Id., Ex. B, ¶ 15.) The signature at issue unambiguously applies to the arbitration agreement; it is not a mere acknowledgement of receipt of Defendant’s Employee Handbook. (Id., Ex. B.) The signature line is immediately preceded by bold, capitalized text confirming that the signatory understands the terms of the arbitration agreement. (Cf. Mendoza v. Trans Valley Transp. (2022) 75 Cal.App.5th 748, 786 [“At a minimum, there should be a specific reference to the duty to arbitrate ... in the acknowledgment of receipt form signed by the employee”].) Plaintiff does not dispute that he signed. (Edmiston Decl., ¶ 10.)

On reply, Defendant produced a third arbitration agreement, bearing an electronic signature from December 2024. (Supp. Quiocho Decl., Ex. A.) This agreement contains the same integration clause as the others and therefore, if the parties agreed to it, it would supersede. (Id., Ex. A, ¶ 15.) Defendant disclaims any intent to rely on the most recent agreement, see Reply, p. 6, and fails to adequately authenticate the agreement, see Supp. Quiocho Decl., ¶ 8. California courts require meaningful, fact-specific evidence, usually a detailed declaration from a qualified witness on how a system verifies identity, to establish that only the purported signatory could have placed the electronic signature on the agreement; a printed name and conclusory assertion that Plaintiff put it there are insufficient. (See, e.g., Garcia v. Stoneledge Furniture LLC (2024) 102 Cal.App.5th 41, 53.)

Under the circumstances, it seems both parties advocate for analysis of the May 2024 agreement, and the court will accommodate. The court notes that the same unconscionability analysis appears to apply to the April 2021 and December 2024 agreements.

Unconscionability

Unconscionability includes both a procedural and a substantiative element. (Penilla v. Westmont Corp. (2016) 3 Cal.App.5th 205, 213-14.) Where an agreement is more substantively unconscionable, less evidence of procedural unconscionability is required to determine that the agreement is unenforceable, and vice versa. (Ibid. [quoting Pinnacle Museum Tower Ass’n v. Pinnacle Market Development (US) LLC (2012) 55 Cal.4th 223, 247].) Considering the significant levels of both procedural and substantive unconscionability, the court finds the agreement unenforceable.

1. The agreement is characterized by significant procedural unconscionability.

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV144036: EDMISTON, INDIVIDUALLY, AND ON BEHALF OF OTHER SIMILARLY SITUATED EMPLOYEES vs WEATHERFORD MOTORS, INC. 05/29/2026 Hearing on Motion to Compel Arbitration filed by WEATHERFORD MOTORS, INC. (Defendant) CRS# 043404420899 in Department 18

Defendant acknowledges that the arbitration agreement was a contract of adhesion, which, by itself, presents only a “low” degree of procedural unconscionability in the employment context. (Lange v. Monster Energy Company (2020) 46 Cal.App.5th 436, 446; Davis v. Kozak (2020) 53 Cal.App.5th 897, 907.) “A greater degree of procedural unconscionability is present when the circumstances of a contract’s formation evince ‘oppression’ or ‘surprise’ beyond that usually present in a contract of adhesion.” (Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93, 104.)

Plaintiff provides additional evidence of oppression. Plaintiff states that his direct supervisor, Steven Li, approached him while he was “actively engaged in performing my job duties,” handed him a clipboard containing a document, and told him he needed to sign. (Edmiston Decl., ¶ 8.) Plaintiff further states that Mr. Li presented the agreement in connection with the receipt of Plaintiff’s paper paycheck, disclaimed any knowledge of its contents, and stated that he could not give it to Plaintiff unless he signed: “Because I understood my paycheck to be contingent on signing, and because I was in the middle of working and could not stop to review the document without possible disciplinary consequences, I signed the document.” (Id., ¶¶ 9, 10.)

These circumstances “constitute significant oppression.” (Fuentes, supra, 19 Cal.5th at p. 104; see also Ali v. Daylight Transp., LLC (2020) 59 Cal.App.5th 462, 474–75 [short deadlines and lack of opportunity to negotiate can constitute “significant oppression” where the agreement is a “precondition” to work].)

Defendant attempts to rebut Plaintiff’s account via a declaration from Steven Li. Li acknowledges that he was Plaintiff’s supervisor at the time but states that he does not recall presenting Plaintiff with the December 2024 arbitration agreement and that he never made the statements the he was “not sure” what the document was, that it was “some legal document from higher up,” or that he could not give Plaintiff his paycheck unless he signed. (Li Decl., ¶¶ 3–5.) Li avers that he never conditioned wages on the execution of any document. (Id., ¶¶ 4–5.) Defendant does not, however, provide evidence of the circumstances under which Plaintiff was presented with the agreement or otherwise identify the person who would have presented Plaintiff with the December 2024 agreement. The court credits Plaintiff’s declaration.

Plaintiff also establishes some level of surprise. The agreement comes at the end of Defendant’s Employee Handbook, which is over 70 pages long, and states that the Handbook contains “only a summary of the employee benefits, personnel policies, and employment regulations in effect at the time of publication” and “should not be construed as creating any kind of ‘employment contract’ as the Company may add, change, or delete all terms and conditions of employment as it deems appropriate in its sole discretion.” (Quadrel Decl., Ex. C.) The arbitration agreement itself is clearly marked and not particularly difficult to read, but its placement deep within the Employee Handbook poses at least some obstacle to a layperson’s understanding. (See Fuentes, supra, 19 Cal.5th at p. 105.)

2. The agreement is characterized by significant substantive unconscionability.

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV144036: EDMISTON, INDIVIDUALLY, AND ON BEHALF OF OTHER SIMILARLY SITUATED EMPLOYEES vs WEATHERFORD MOTORS, INC. 05/29/2026 Hearing on Motion to Compel Arbitration filed by WEATHERFORD MOTORS, INC. (Defendant) CRS# 043404420899 in Department 18

The agreement is overbroad and indefinite because it covers “any and all claims which arise out of the employment context or any other interaction/relationship we had, have or may have in the future.” (See Cook v. Univ. of S. California (2024) 102 Cal.App.5th 312, 324.) The Cook court rejected an argument that an agreement should be construed to apply only to disputes arising from a plaintiff’s employment “regardless of the agreement’s express language to the contrary.” (Cook, supra, at p. 321.)

The agreement also lacks mutuality because it provides “a significant benefit” to Defendant’s related entities “without any reciprocal benefit” to Plaintiff. (Cook, supra, 102 Cal.App.5th at p. 328.) The agreement is mutual in that both parties agree to pursue claims against any third-party beneficiaries through arbitration. But third-party beneficiaries are defined to “include the Company’s owners, directors, officers, managers, employees, agents, partners, attorneys, sistercompanies, subsidiaries, parent companies, joint-venturers, affiliated persons/entities, independent contractors, and parties affiliated with its employee benefit and health plans,” and the agreement does not require third-party beneficiaries to arbitrate any claims against Plaintiff. (Quadrel Decl., Ex. ¶ 5.) This arrangement is one-sided under Cook, and Defendant has not justified the lack of mutuality.

The court is not persuaded that the agreement is unconscionable because it eliminates a right to appeal from a decision of the Labor Commissioner. Plaintiff fails to establish that the agreement eliminates “the substantive basis” for any statutory claims. (Pinela v. Neiman Marcus Grp., Inc. (2015) 238 Cal.App.4th 227, 251.) An agreement to arbitrate Labor Code claims, i.e., resolve disputes in a particular forum, is not per se unconscionable. But the overbreadth and lack of mutuality are sufficient to establish a significant level of substantive unconscionability.

3. The court declines to sever the unconscionable provisions.

When “the central purpose of the contract is tainted with illegality,” it cannot be enforced. (Ramirez, 16 Cal.5th at p. 516–17.) But if the illegality is collateral and “the offending provision can be severed or limited,” then the court must determine if “enforcing the balance of the contract would be in the interests of justice.” (Ibid.) The lack of mutuality and indefinite nature of this agreement suggest “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.” (Jenkins v. Dermatology Mgmt., LLC (2024) 107 Cal.App.5th 633, 650; see also Martinez v. Master Prot. Corp. (2004) 118 Cal.App.4th 107, 119.)

ORDER

Defendant’s motion to compel arbitration is DENIED.