COOPER COY vs SWICKARD TOG, LLC

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC 06/08/2026 in Department 44 Motion to Compel Arbitration and Stay Proceedings

Effective January 5, 2026, Judge Charmaine H. Buehner and all cases previously assigned to Department J4 at the Juvenile Justice Center in Oxnard transferred to Department 44, located at the Hall of Justice, 800 South Victoria Avenue, Ventura, California 93009.

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Motion: Defendant’s Motion to Compel Arbitration and Stay Proceedings

Tentative Ruling:

Defendant’s Motion to Compel Arbitration and Stay Proceedings is GRANTED with the severance of the unconscionable terms in paragraphs 3 and 5 of the Arbitration Agreement, and paragraph 13 of the Confidentiality Agreement, as set forth below, and the Court exercises its discretion to stay the representative PAGA claims pending resolution of the arbitrated claims.

The Court’s ruling on this Motion MOOTS the pending hearing on Plaintiff’s motion for “corrective action” scheduled for June 9, 2026, and that hearing is taken off calendar.

The Court sets a status conference regarding arbitration on June 8, 2027 at 8:30 a.m. The parties are ordered to file a joint status report at least 10 court days prior to the status conference.

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

I. Defendant’s Objections to the Declaration of Cooper Coy

Objection 1 is overruled.

Objection 2 is sustained as to the language “that crossed state lines” in line 20. Objection 2 is also sustained as to the entire sentence beginning with “I even worked on . . . .” that begins on line 21 and concludes with “Canada” on line 22. Objection 2 is overruled as to the remainder of the language in Paragraph 6.

Objections 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 are overruled.

Objections 13 and 14 are sustained.

II. Relevant Background

This is a wage-and-hour action arising out of Defendant’s alleged violation of various Labor Code provisions. The Complaint was filed as a class action on November 5, 2025, alleging claims for (1) failure to pay all wages owed; (2) failure to pay all overtime wages; (3) meal period violations; (4) rest period violations; (5) paid sick leave violations; (6) unpaid vacation wages; (7) untimely payment of wages; (8) wage statement violations; and (9) waiting time penalties. There is also a tenth derivative cause of action for violation of the Unfair Competition law. The operative FAC was filed on January 7, 2026, and added a PAGA claim.

On April 22, 2026, Defendant filed the instant motion to compel arbitration. Plaintiff filed an opposition on May 26, 2026. Defendant filed a reply memorandum on June 1, 2026.

III.

Discussion

A. Legal Framework: Motions to Compel Arbitration

“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., § 1281.)

“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 that 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, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2.)

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

B. Application

1. Existence of An Arbitration Agreement

“[I]n ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute. [citations] General principles of California contract law guide the court in making this determination.” (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541; Ford Motor Warranty Cases (2025) 17 Cal.5th 1122, 1128 [quoting Mendez].)”

“The party seeking arbitration bears the burden of proving the existence of an arbitration agreement[.]” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.) “A party’s acceptance of an agreement to arbitrate may be express, as where a party signs the agreement. A signed agreement is not necessary, however, and a party's acceptance may be implied in fact[.]” (Id.)

“Although the party seeking arbitration bears the ultimate burden of proof as to the existence of an arbitration agreement, the burden of producing evidence on the issue may shift pursuant to a three-step process recognized by California courts.” (Ramirez v. Golden Queen Mining Co., LLC (2024) 102 Cal.App.5th 821, 830.) “The first step requires the party seeking arbitration to carry the initial burden of presenting prima facie evidence of a written agreement to arbitrate the controversy. [citations] If that initial burden is met, the second step requires the party opposing arbitration to carry the burden of producing evidence to challenge the authenticity of the agreement. [citation] 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].)

“The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the respondent's signature.” (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543-544; see also Cal. Rules of Court, rule 3.1330.) “[E]lectronic and handwritten signatures have the same legal effect and are equally enforceable.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 168 [citing Civ. Code, § 1633.7, subds. (a)-(b).) “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.” (Civ. Code, § 1633.9, subd. (a).) “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.” (Id., subd. (b).)

“Alternatively, the moving party can meet its burden by setting forth the agreement's provisions in the motion.” (Gamboa, supra, 72 Cal.App.5th at p. 165.) “For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication.” (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218; Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 [quoting Condee]; see also People v. Skiles (2011) 51

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

Cal.4th 1178, 1187 [“The means of authenticating a writing are not limited to those specified in the Evidence Code.” (citing Evid. Code, § 1410)].] and ibid. [“For example, a writing can be authenticated by circumstantial evidence and by its contents.”].)

Here, Defendant has provided a copy of the agreement with evidence that it and several other onboarding documents were electronically signed by Plaintiff on January 23, 2025, in Paylocity, a human resources software application that Defendant has used since approximately February 2020. (Lennard Decl., ¶ 1-12, Exhs. A and B; Boyack Decl., ¶¶ 1-25, Exh. A.) Defendant has thus met its initial burden. (Ramirez, supra, 102 Cal.App.5th at p. 830; Bannister, supra, (2021) 64 Cal.App.5th at pp. 543-544Gamboa, supra, 72 Cal.App.5th at p. 168.)

“If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa, supra, 72 Cal.App.5th at p. 165; see also Iyere, supra, 87 Cal.App.5th at p. 755 [“If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement's existence [.]”].) “The opposing party can do this in several ways. For example, the opposing party may testify under oath or declare under penalty of perjury that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement.” (Gamboa, supra, 72 Cal.App.5th at p. 165.)

Here, Plaintiff does not argue in his brief that he did not sign the arbitration agreement. (See generally Opposition.) He does submit a declaration in which he asserts that he “does not recall signing electronically or otherwise the purported Arbitration Agreement,” and because he cannot “recall the specifics,” he “cannot vouch for the authenticity of the purported Arbitration Agreement offered by Defendant.” (Coy Decl., ¶¶ 10-11.). But he also concedes that he did participate in an onboarding process in which he viewed documents on his iPhone. (Id., ¶¶ 9-10.) Moreover, he states that it was his understanding that “signing every document in the onboarding process was required” and that “completing these forms expeditiously was required and that my employment depended on their completion.” (Id., ¶ 12.)

The evidence before the Court is sufficient to supporting a finding that Plaintiff electronically signed the agreement to arbitrate on January 23, 2025.

2. Scope of the Agreement

“The scope of arbitration is a matter of agreement between the parties[.]” (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 763.) “The party opposing arbitration has the burden to show the arbitration provision cannot be interpreted to cover the claims in the complaint.” (Id. at p. 764.) Plaintiff has the burden to show that the provision does not cover the claims alleged. (Id.) “[N]o dispute may be ordered to arbitration unless it is within the scope of the arbitration agreement.” (Titolo v.

Cano (2007) 157 Cal.App.4th 310, 317.) “In determining the scope of an arbitration clause, ‘[t]he court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made [citation].’” (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744 [internal quotation marks omitted].) “[T]he terms of the

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

specific arbitration clause under consideration must reasonably cover the dispute as to which arbitration is requested.” (Bono v. David (2007) 147 Cal.App.4th 1055, 1063.) “[T]he decision as to whether a contractual arbitration clause covers a particular dispute rests substantially on whether the clause in question is ‘broad’ or ‘narrow.’” (Id. at p. 1067.) “A ‘broad’ clause includes those using language such as ‘any claim arising from or related to this agreement’.” (Ibid.)

Here, the scope of the agreement is set forth in Paragraph 1, which states as follows: I and Swickard TOG, LLC dba Swickard Chevrolet, Buick, GMC, Cadillac of Thousand Oaks (“the Dealership”) 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 Dealership. Such disputes include, but are not limited to, claims I might bring against the Dealership 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 Dealership 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 Dealership 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. (Boyack Decl., Exh. 1 [¶ 1].)

The provision is very broad but also specifically references wage-and-hour violations and individual claims under PAGA. Plaintiff does not argue otherwise. Accordingly, the Court finds that the agreement covers the claims alleged in the operative FAC.

3. Applicability of the FAA

“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract or as otherwise provided in chapter 4.” (9 U.S.C.A. § 2 (West).) “[T]he word ‘involving’ is broad and is indeed the functional equivalent of ‘affecting.’ ” (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 273-274].)

“Section 2 of the FAA, the basic coverage provision of the FAA, makes the law applicable to contracts evidencing a transaction ‘involving commerce’ (9 U.S.C. § 2), which language reflects that Congress intended the law’s coverage to extend to the full reach of its commerce clause power.” (Nieto v. Fresno Beverage Co., Inc. (2019) 33 Cal.App.5th 274, 279.)

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

“Generally, the first step in reviewing an arbitration dispute is to determine whether the question presented is subject to the FAA or the CAA because different rules apply under the two acts, which in some cases leads to federal preemption.” (Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52 Cal.App.5th 360, 391, disapproved on other grounds by Vo v. Technology Credit Union (2025) 108 Cal.App.5th 632.) “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.) “For example, a petitioner seeking an order to compel arbitration must show that the subject matter of the agreement involves interstate commerce.” (Id. at pp. 687-688.)

Here, the arbitration expressly provides as follows: “Any arbitration proceeding under this agreement shall proceed under and be governed by the Federal Arbitration Act (“FAA”) because both I and the Dealership are engaged in interstate commerce.” (Boyack Decl., Exh. 1 [¶ 7].) An agreement that the FAA applies, without more, is sufficient to find that the FAA applies. (Tuufuli v. West Coast Dental Administrative Services, LLC (2026) 117 Cal.App.5th 1048, 1054, and cases cited therein.) Defendant also provides evidence that it “purchases supplies and materials from out-of-state businesses” and “sells to and buys cars from out-of-state residents and manufacturers.” (Lennard Decl., ¶ 12.) The Court finds that the FAA governs the agreement unless an exemption applies.

“Section 1 of the FAA provides a limited exemption from the law’s coverage to ‘contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.’ (9 U.S.C. § 1.)” (Nieto, supra, at p. 279.) To avoid applicability of the FAA, Plaintiff asserts that in his job as a service technician he is a “transportation worker.”

The test for determining whether the exemption applies is not whether the employer is engaged in interstate commerce, but rather whether the employee belongs to a class of workers that is engaged in interstate commerce in their day-to-day work. (Southwest Airlines Co. v. Saxon (2022) 596 U.S. 450, 455-456; see also id. at pp. 458-459 [airline worker who loaded cargo onto planes bound for interstate transit a transportation worker exempt from FAA’s scope].)

Here, Plaintiff asserts that he is a service technician for Defendant; that his job duties include inspecting, diagnosing, and repairing vehicles. In the performance of his duties, he test drives the vehicles he repairs. (Coy Decl., ¶ 5.) He performs these duties “[a]t Defendant’s dealership.” (Id., ¶ 6.) In the course of performing his duties, he has worked on vehicles that have “out-of-state license plates from a variety of states across the United States.” Some vehicles on which he had worked have a “DOT insignia” on them. (Id., ¶ 6.) Although Defendant attempts to assert that some of the vehicles he has worked on have “crossed state lines” and on one vehicle that “was “manufactured in and was from Canada,” the Court has sustained objections to that language and does not consider it because no basis for Plaintiff’s assertions were offered in support of those conclusions.

In the recently-decided Vela v. Harbor Rail Services of California, Inc. (2026) 120 Cal.App.5th 353, ___ Cal.Rptr.3d ___, 2026 WL 1194526, the Second Appellate District held that a rail freight car repairman was not an exempt transportation worker because his class of workers

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

inspected and repaired railcars that had been taken out of service, and the railcars were returned to transportation only after the repair work was complete. The court concluded that such repair work was too far removed from the actual movement of goods in interstate commerce. (Id. at *1, *5 - *8.)

Vela is closely analogous to the facts here and compels the same conclusion. In his position as an service technician, Plaintiff he repairs vehicles. He does not transport goods or passengers across state lines, load or unload goods, supervise shipments, or otherwise play a direct and necessary role in the continuous interstate movement of goods. His connection to interstate commerce, like the rail freight car repairman in Vela, is therefore too attenuated to bring him within section 1’s transportation worker exemption.

For the reasons stated herein, the Court finds that the FAA governs the arbitration agreement.

4. Defenses to Arbitration: Unconscionability

“Once an agreement to arbitrate has been proved, the burden shifts to the party opposing arbitration to establish a defense to the enforcement of the agreement, including the burden of demonstrating that the exemption [from arbitration] applies.” (Nixon v. AmeriHome Mortgage Co., LLC, supra, 67 Cal.App.5th at p. 946 [internal quotation marks and citation omitted].)

“Unconscionability in a contract is one reason a court may decline enforcement.” (Lange v. Monster Energy Co. (2020) 46 Cal.App.5th 436, 445.) “If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.” (Civ. Code, § 1670.5, subd. (a); see also Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 505]“[A]n unconscionability assessment focuses on circumstances known at the time the agreement was made.”].)

“The general principles of unconscionability are well established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125.)

“Unconscionability consists of both procedural and substantive elements. The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 246.) “Both procedural unconscionability and substantive unconscionability must be shown, but they need not be present in the same degree and are evaluated on a sliding scale.” (Id. at p. 247 [quoting in part Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th at p. 83, 114 (internal quotation marks omitted)].) “In other words, 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.” (Armendariz, supra, at p. 114.)

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

“The party resisting arbitration bears the burden of proving unconscionability.” (Pinnacle Museum Tower, supra, at p. 247.)

a. Procedural Unconscionability

“Unconscionability analysis begins with an inquiry into whether the contract is one of adhesion.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113.) “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, L.L.C. v. Kho, supra, 8 Cal.5th at p. 126 [quoting Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245].) The contract here meets the description of an adhesive contract.

First, it was a preprinted form. (Boyack Decl., Exh. 1.) Further, the Boyack declaration provides evidence that employees could not begin employment until all assigned onboarding tasks were completed and identifies the Arbitration Agreement as one of those onboarding documents. (Boyack Decl., ¶¶ 8, 21, 23, 25.) Thus, the Court should find that the arbitration agreement was a contract of adhesion. But “absent unusual circumstances, use of a contract of adhesion establishes a minimal degree of procedural unconscionability[.]” (Gatton v.

T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 585.)

“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.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 247.) “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.” (Grand Prospect Partners, L.P. v.

Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1348, as modified on denial of reh'g (Feb. 9, 2015).)

Here, the record supports a finding of some procedural unconscionability due to the adhesive nature of the contract and because it was required as a condition of employment. The Boyack declaration states that employees, including Plaintiff, could not begin employment until all assigned onboarding tasks were completed through Paylocity, and the Arbitration Agreement was one of the assigned onboarding documents. (Boyack Decl., ¶¶ 8, 21, 23, 25 & Exh. 1.) The Boyack declaration supports an inference that the agreement was presented on a take-it-or-leave-it basis as part of the onboarding process, with no negotiation or meaningful choice.

Boyack states that Plaintiff electronically signed the agreement during onboarding through Paylocity, and the agreement itself is a standalone document, not a provision buried in a lengthy handbook or unrelated document. (Boyack Decl., Exh. 1.) The agreement also states that Plaintiff had time to read the agreement and ask the Dealership’s representative any questions before signing. (Boyack Decl., Exh. 1 [¶ 10].)

As to surprise, the arbitration requirement was not hidden within a prolix printed form; the document is separately titled “Dispute Resolution Agreement” and uses boldface type and all caps to draw attention to it. Further, the final acknowledgment states in capital letters that the agreement requires arbitration of disputes arising out of Plaintiff’s application for employment

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

and employment, except as expressly excluded. (Boyack Decl., Exh. 1.) Plaintiff states that the onboarding documents were presented through an electronic signing portal and were difficult to view on his iPhone, but that fact does not substantially assist him on surprise because the difficulty appears to have resulted, at least in part, from his chosen viewing device rather than from any concealment of the arbitration terms by Defendant. (Coy Decl., ¶¶ 9-10.)

In sum, the Cout finds a low degree of procedural unconscionability due to the adhesive nature of the contract. Accordingly, Plaintiff must make a strong showing of substantive unconscionability to render the agreement enforceable. (Gatton, supra, 152 Cal.App.4th at p. 586 [requiring strong showing of substantive unconscionability in case where plaintiffs “showed a minimal degree of procedural unconscionability arising from the adhesive nature of the agreement” in light of “sliding scale approach”].)

b. Substantive Unconscionability

“A court should consider substantive unconscionability only after procedural unconscionability has been established. A ‘conclusion that a contract contains no element of procedural unconscionability is tantamount to saying that, no matter how one-sided the contract terms, a court will not disturb the contract because of its confidence that the contract was negotiated or chosen freely, that the party subject to a seemingly one-sided term is presumed to have obtained some advantage from conceding the term or that, if one party negotiated poorly, it is not the court's place to rectify these kinds of errors or asymmetries.’” (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 494 [quoting Gentry v. Superior Court (2007) 42 Cal.4th 443, 470].)

“Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC, supra, 55 Cal.4th at p. 246.) “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.” (Ibid. [internal quotation marks and citation omitted].)

Plaintiff argues that the agreement is substantively unconscionable because it: (1) lacks mutuality; (2) contains an impermissible wholesale PAGA waiver; and (3) provides for one-sided injunctive relief.

a. Mutuality

The agreement provides as follows: My agreement to arbitrate claims against the Dealership includes claims I might bring against the Dealership’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 Dealership 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 Dealership as well as

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

claims brought against staffing companies, employee leasing companies, professional employer organization or payroll processing vendors that the Dealership has utilized. (Boyack Decl., Exh. 1 [¶ 3].)

In Cook v. University of Southern California (2024) 102 Cal.App.5th 312, the Court of Appeal held that a similar provision was substantively for lack of mutuality. (Id. at p. 326-328.) The Court reaches the same conclusion here.

b. PAGA Waiver

The agreement provides as follows: Both I and the Dealership agree that any claims under PAGA must be pursued in my individual capacity in arbitration. This agreement shall not be construed to allow or permit the consolidation or joinder of PAGA claims of other claimants. No arbitrator shall have the authority under this agreement to order any such collective action or joinder of claims. Any dispute regarding the validity, scope or enforceability of this provision, or concerning the arbitrability of a PAGA claim, shall be resolved by a court, not by the arbitrator.

To the full extent permissible under the law, I agree to waive any substantive or procedural rights that I may have to bring or participate in a PAGA action brought on a collective or non-individual basis. I acknowledge that nothing herein precludes me from pursuing my individual PAGA claim in arbitration. I further acknowledge that upon my execution of this Agreement, I lack standing to pursue, litigate, or act as a representative for any non-individual PAGA claims in a court of law. If any term, provision, or portion of this paragraph is deemed invalid or unenforceable, it shall be severed and the remainder shall remain enforceable in arbitration. (Boyack Decl., Exh. 1 [¶ 5] (emphasis added).)

The FAA preempts the “rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.” (Viking River Cruises, Inc., v. Moriana (2022) 596 U.S. 639, 662.) In Viking River Cruises, the arbitration agreement at issue “contained a ‘Class Action Waiver’ providing that in any arbitral proceeding, the parties could not bring any dispute as a class, collective, or representative PAGA action. It also contained a severability clause specifying that if the waiver was found invalid, any class, collective, representative, or PAGA action would presumptively be litigated in court.

But under that severability clause, if any ‘portion’ of the waiver remained valid, it would be ‘enforced in arbitration.’ ” (Id. at p. 647.) The Supreme Court expressly held that the employer could compel an employee to arbitrate the employee’s individual claims. (Id. at p 662.) But it also held that an agreement that contained a waiver of non-individual claims would be contrary to the FAA and therefore invalid. (Ibid.) Based on the severability clause, which allowed for the employee’s individual PAGA claims to be arbitrated, the court held that the defendant could compel arbitration of the plaintiff’s individual claims. (Ibid.)

The Supreme Court also expressly held that Iskanian’s holding still applied if the waiver is construed as a wholesale waiver. (Ibid.)

2025CUOE053852: COOPER COY vs SWICKARD TOG, LLC

In Nickson v. Shemran, Inc. (2023) 90 Cal.App.5th 121, a PAGA case, the arbitration agreement contained the following waiver: “All claims that are covered by this Agreement can only be brought ... on an individual basis. ... I agree to waive any right to join or consolidate claims with others, or to make any claims as representative of a class, a member of a class, or in a private attorney general capacity.” (Id. at p. 127.) The trial court had denied the defendant’s motion to compel arbitration, relying on Iskanian. (Id.)

But then the U.S. Supreme Court decided Viking River. After reviewing Viking, the Court of Appeal reversed the denial of the motion, finding that the plaintiff’s individual claims could be arbitrated, while his non-individual claims could not be arbitrated, based on the fact that the agreement at issue contained a severability clause. That clause stated as follows: “If any provision of this Agreement is determined to be void or otherwise unenforceable, such determination shall not affect the validity of the remainder of the Agreement.” (Id. at p. 130.)

Because the FAA governs the agreement, and because the agreement contains severability clauses in Paragraphs 5 and 9, the Court finds that Plaintiff’s individual PAGA claims may be arbitrated, to the extent that he has alleged any.

c. One-Sided Injunctive Relief

Plaintiff argues that a non-disclosure agreement he signed contemporaneously with the arbitration agreement provides for one-sided injunctive relief and that because it must be taken together with the arbitration agreement pursuant to Civil Code section 1642, the arbitration agreement is substantively unconscionable. Section 1642 states as follows: “Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.” (Civ. Code, § 1642.)

Plaintiff cites Alberto v. Cambrian Healthcare (2023) 91 Cal.App.5th 482 in support of his position. In that case, the Court of Appeal, citing section 1642, stated that “documents executed as part of a single transaction are construed together, even if they do not expressly refer to one another.” (Id. at p. 490.) Further, the court held that unconscionability in one document “can, and does, affect whether” and arbitration agreement is also unconscionable because to hold otherwise would permit an employer to impose unconscionable terms but avoid a finding of unconscionability “because it put the objectionable terms in a (formally) separate document.

That is contrary to Civil Code section 1642.” (Id. at pp. 490-491.) In Alberto, the court held that a confidentiality agreement’s injunction provision was not mutual because it allowed the employer to obtain, outside of arbitration, an immediate injunction for the employee’s breach of the confidentiality provision. (Id. at p. 492.) Further, the confidentiality agreement also permitted the employer to obtain attorney fees if it prevailed on an injunction. The terms thus exclusively benefitted the employer, as a result of which the court found the injunction provision unconscionable. (Id. at pp. 492-493; see also generally Gurganus v.

IGS Solutions LLC (2025) 115 Cal.App.5th 327 [lack of mutuality in several provisions was substantively unconscionable].)

Here, the non-disclosure agreement presented by Plaintiff provides that Defendant may seek injunctive relief without posting a bond. (Katseanes Decl., ¶ 3, Exh. 1 [¶ 13].) Plaintiff argues that such provisions have been found to be substantively unconscionable. He is correct.

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(Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 247-253 [moderate level of unconscionability]; Lange v. Monster Energy Co. (2020) 46 Cal.App.5th 436, 451.) Accordingly, for purposes of the unconscionability analysis, the Court considers the non-disclosure agreement together with the Arbitration Agreement under Civil Code section 1642 and finds Paragraph 13 of the non-disclosure agreement to be substantively unconscionable.

C. Severability

“If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.” (Civ. Code, § 1670.5, subd. (a).) “[N] no bright line rule requires a court to refuse enforcement if a contract has more than one unconscionable term.” (Ramirez v.

Charter Communications, Inc. (2024) 16 Cal.5th 478, 516.) “[C]ourts may liberally sever any unconscionable portion of a contract and enforce the rest when: the illegality is collateral to the contract’s main purpose; it is possible to cure the illegality by means of severance; and enforcing the balance of the contract would be in the interests of justice.” (Id. at p. 517.)

Here, the Court finds that the unconscionable provisions—Paragraph 3 of the arbitration agreement and Paragraph 13 of the non-disclosure agreement—are collateral to the contract’s main purpose. The Court exercises its discretion to sever those provisions. The Court will also sever the following language from Paragraph 5 of the arbitration agreement: “To the full extent permissible under the law, I agree to waive any substantive or procedural rights that I may have to bring or participate in a PAGA action brought on a collective or non-individual basis. . . . .

I further acknowledge that upon my execution of this Agreement, I lack standing to pursue, litigate, or act as a representative for any non-individual PAGA claims in a court of law.” The Court finds that severing these provisions will cure the illegalities in the agreement and that enforcing the balance of the arbitration will be in consistent with the state and federal policies favoring arbitration, as well as be in the interests of justice.

9. Stay of Non-Individual PAGA Claims

“[W]here a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court.” (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1123.) “Nothing in PAGA or any other relevant statute suggests that arbitrating individual claims effects a severance. When a case includes arbitrable and nonarbitrable issues, the issues may be adjudicated in different forums while remaining part of the same action.” (Id. at p. 1124.)

“[C]ase law establishes that a stay of proceedings as to any inarbitrable claims is appropriate until arbitration of any arbitrable claims is concluded.” (McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 966.)

Plaintiff alleges in the FAC that the PAGA claim is “brought exclusively as a representative action and does not include arbitrable claims.” (FAC, ¶ 15.) Elsewhere he alleges that he brings

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the PAGA claim “as a proxy for the State of California on behalf of” the described collection of aggrieved employees. (Id., ¶ 92.) Defendant argues that despite these allegations, the Court should follow the split of appellate authority that holds that every PAGA action necessarily includes an individual component, citing the language of Labor Code section 2699 and Leeper, which is currently pending before the Supreme Court to resolve this issue.

Labor Code section 2699, subdivision (a), provides as follows: Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of the employee and other current or former employees against whom a violation of the same provision was committed pursuant to the procedures specified in Section 2699.3. (Lab. Code, § 2699, subd. (a).)

Subdivision (c) defines “aggrieved employee,” in relevant part, as “any person who was employed by the alleged violator and personally suffered each of the violations alleged during the period prescribed[.]” (Lab. Code, § 2699, subd. (c)(1).)

The parties do not dispute that there is a split of authority among the Courts of Appeal, some of which hold that “headless” PAGA claims are valid and others of which are invalid. This is true even within the Second Appellate District. (Cf. Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001, 1009 [Division 1, holding that “based on the unambiguous language in section 2699, subdivision (a), any PAGA action necessarily includes both an individual PAGA claim and a representative PAGA claim.”] with Balderas v.

Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, 536 [Division 6, holding “that an employee who does not bring an individual claim against her employer may nevertheless bring a PAGA action for herself and other employees of the company.”] and id. at p. 537 [“The inability for an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action.”].)

The Court finds consistent with Balderas v. Fresh Start Harvesting, Inc., reading subdivisions (a) and (c) together, numerous interpretations are possible, two of which are that a plaintiff may only recover penalties for Labor Code violations the plaintiff suffered, as Defendant argues, and that a plaintiff may proceed in a representative-only capacity, even without pursuing individual penalties, as Plaintiff argues that he has done in the FAC.

Given that the Court has discretion to stay the proceedings pending the outcome of arbitration, the Court exercises its discretion and stays the non-individual claims. (Code Civ. Proc., § 1281.4.)

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IV.

Disposition

For the reasons stated herein, the Court grants the motion to compel arbitration and the requested stay of proceedings.

Counsel for Defendant is ordered to give notice of the Court’s ruling.

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