Filed 1/19/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
LEROY IYERE et al.,
Plaintiffs and Respondents,
A163967
v.
WISE AUTO GROUP, (Marin County
Super. Ct. No. CIV2101151)
Defendant and Appellant.
Wise Auto Group, doing business as Infiniti of Marin (hereafter Wise),
appeals an order denying its motion to compel Leroy Iyere, Phillip Derbigny,
and Michael Worlow (collectively plaintiffs) to arbitrate their employment-
related claims. Plaintiffs asserted that they did not recall signing the
arbitration agreement bearing their purported handwritten signatures and
that the asserted agreement is unconscionable. The court concluded that Wise
had not borne its burden of proving the authenticity of the signatures and,
alternatively, that the agreement is unconscionable. We shall reverse.
FACTUAL AND PROCEDURAL HISTORY
Plaintiffs began working for Wise on separate dates in 2018 and 2019.
Worlow and Derbigny were sales consultants; Iyere was a sales manager.
With its motion to compel arbitration, Wise submitted, among other things,
copies of a binding arbitration agreement (the agreement) with the purported
1
handwritten signature of each plaintiff, hand-dated on their respective start
dates.1
The copies of the agreement bearing the signatures of Iyere and Worlow
state that “any claim, dispute, and/or controversy arising from, or relating in
any way to, Employee’s employment relationship . . . with the Company,
including without limitation, any claim or controversy brought on behalf of or
against the Company or [related entities] which would otherwise be brought
in court . . . shall be submitted to, and . . . resolved through, final and binding
arbitration before an arbitrator selected in accordance with the procedures of
the arbitration service selected by the party against whom the claim is brought
from among the following: Alternative Dispute Resolution Services, Judicial
Arbitration and Mediation Services, or such other service to which the parties
agree.” The agreement states that it is “governed by the Federal Arbitration
Act (9 U.S.C. § 1, et seq.) (‘FAA’) and to the extent not inconsistent with the
FAA, the procedures set forth in . . . Code of Civil Procedure [section] 1280, et
seq.,” and that it is “controlled by the [FAA], in conformity with the
procedures of the California Arbitration Act (Code Civ. Proc. §§ 1280 et seq
including section 1283.05 and all of the Act’s other mandatory and permissive
rights to discovery).” The agreement covers “all claims, allegations and
1 Wise also offered copies of compensation agreements, one for sales
consultants and one for sales managers, that each contain an arbitration
clause and bear plaintiffs’ apparent handwritten signatures, as well as copies
of an “Employee Acknowledgment and Agreement” that has an arbitration
clause and bears Iyere’s apparent physical signature and employment
applications that contain arbitration clauses and which Worlow and Derbigny
allegedly signed electronically. No single one of those documents was signed
by all three plaintiffs. Wise’s motion relied almost entirely on the binding
arbitration agreement, with one reference to the compensation programs and
a footnote citing the other agreements. We limit our discussion to the binding
arbitration agreement.
2
charges of violation of federal[,] state or local law[,] statute[,] ordinance[,] rule
or regulation (e.g., claims of discrimination . . . , breach of . . . contract[,] tort
claims, wage payment claims, violation of public policy claims, or any other
alleged violation of statutory, contractual or common-law rights.”2 It bans
class arbitration, waives the employees’ right to join class litigation, and sets
forth in capitalized letters that the parties waive the right to a jury trial of
any covered claim, noting that such right “is of value” and that the employee
“may wish to consult with an attorney prior to signing this agreement.”
The agreement ends with admonitions that a decision to agree to
arbitration is important and is the employee’s to make, and that he or she
should conduct research and consult with others including an attorney about
its consequences. There follows an acknowledgement that the employee has
read the agreement carefully and understands that it is voluntary and that
he or she “can choose not to sign this agreement and still become or remain
employed by the company,” without retaliation.
The copy of the agreement bearing Derbigny’s signature differs in some
respects,3 but none material to resolution of this appeal.
2
The agreement adds that it covers claims under specified federal
antidiscrimination statutes and under the Fair Employment and Housing Act
(FEHA) (Gov. Code, § 12900 et seq.), while excluding only claims under the
National Labor Relations Act or Private Attorneys’ General Act (Lab. Code,
§ 2698 et seq.), claims for unemployment compensation or workers’
compensation, claims within the jurisdiction of a small claims court, and
claims that cannot by law be subject to mandatory arbitration.
3
Rather than state that the parties will use “an arbitrator selected in
accordance with the procedures of the arbitration service selected,”
Derbigny’s copy states, “in addition to requirements imposed by law, any
arbitrator herein shall be a retired California Superior Court Judge and shall
be subject to disqualification on the same grounds as would apply to a judge
of such court.” Derbigny’s copy also specifies that “[a]wards shall include the
3
Wise fired plaintiffs in 2019. In 2021, they filed a joint complaint
asserting 25 causes of action against Wise and its employee Dino Ricci,
including claims for discrimination, harassment, retaliation, breach of
contract, torts, violation of statutory rights, and wrongful termination in
violation of public policy. Wise filed a motion to sever the complaints and
compel each plaintiff to submit his claims to individual arbitration pursuant
to the agreement (see p. 1 & fn. 1, ante).4 Accompanying the motion, Wise
submitted a declaration from George Allen, its HR director and custodian of
personnel records since January 2020, authenticating the documents,
including the agreement bearing the purported handwritten signature of
each plaintiff.
In opposition, each plaintiff signed a materially identical declaration
alleging that, on his first day of work, he “met with a female [Wise] employee
who handed me a large stack of documents to fill out”; he “was not given any
time to review the documents because the [m]anager of [Wise] rushed me to
get to work . . . [and] specifically told [me] to quickly sign the documents so I
could get to work”; and he “signed the stack of documents immediately and
returned them.” Each plaintiff alleged that Wise never gave him a copy of the
documents he signed and that he first saw the agreement when his lawyer
showed him the declaration of Allen, whom he had never met. Each plaintiff
added, “In fact, I do not recall ever reading or signing any document entitled
arbitrator’s written reasoned opinion” and that if Code of Civil Procedure
section 1284.2 “conflicts with other substantive statutory provisions or
controlling case law, the allocation of costs and arbitrator fees shall be
governed by said statutory provisions or controlling case law.”
4Although Wise asked the court to compel arbitration of the claims
against both itself and its employee Ricci, Wise alone filed the motion, and
only Wise has appealed its denial.
4
Binding Arbitration Agreement or Employment Acknowledgment. I do not
know how my signature was placed on [either document].”
Each declaration alleged that the plaintiff believed that, in order to
work for Wise, he had “no choice but to sign the documents presented to me”
and “no power to negotiate or modify the terms of [the agreement].” When he
first read the agreement in the course of this action, he found it “confusing”
and his lawyer explained that it bars him from suing Wise. “This is the first
time I was made aware of this. If I had known I was giving up my rights to file
a lawsuit against [Wise,] I would have refused to sign the document. I would
never agree to waive my rights to file a lawsuit against [Wise] or participate
in this consolidated action with [my co-plaintiffs].”
The declarations continue, “[N]o one ever told me or explained to me
what I was signing and that I was agreeing to arbitrate any disputes with
[Wise] and . . . giving up my rights to file a lawsuit against them in court. . . .
[¶] . . . I do not have any legal training, so I do not understand what [the
agreement] means because it is complicated and [cites] laws and codes that I
have never heard of. [¶] . . . No one . . . afforded me the opportunity to opt-out
of [the agreement] or [said] that I had the right to [do so]. If I had known that
I could opt-out, I would have definitely opted-out. Instead, I was told to hurry
up and sign a large stack of documents on my first day of work.”
Plaintiffs also contended that the agreement is procedurally and
substantively unconscionable. They based the latter claim on its failure to
specify that the arbitration will afford them various rights. They also
contended that, because the agreement states that it is governed by the FAA,
it violates Labor Code section 925 (section 925), which bars contractual terms
that require employees who live and work in California to waive, as a
condition of employment, the substantive protections of California law.
5
The trial court ultimately denied the motion.5 It held that Wise failed to
bear its burden of proving the authenticity of the signatures, and that the
agreement is procedurally and substantively unconscionable. The court based
the latter ruling on its determination that the agreement violates section 925
by stating it is governed by the FAA, and that its provision allowing the party
against whom the claim is made to choose between two arbitration providers
unfairly favors Wise, which is more likely to be that party. Wise timely
appealed the order.
DISCUSSION
1. Standard of Review
If a party to a civil action asks the court to compel arbitration of the
pending claim, the court must determine in a summary proceeding whether an
“agreement to arbitrate the controversy exists.” (Code Civ. Proc., §§ 1281.2,
1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th
394, 412–413 (Rosenthal).) “Because 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. If the
party opposing the petition raises a defense to enforcement . . . that party
5 The court issued a tentative ruling denying the motion and granting
plaintiffs’ request for attorney fees pursuant to section 925, based on the
agreement’s purported violation of that statute. At an initial hearing on the
motion, Wise asked the court to delay ruling until Wise could depose
plaintiffs about the allegations in their declaration, or to make any denial of
the motion without prejudice to renewal after such discovery. Wise also noted
the lack of authority for a fee award, and the court set a further hearing and
requested supplemental briefs on that issue, while stating that it would adopt
its tentative ruling as to all other issues. After a second hearing, the court
made its denial of the motion without prejudice to renewal if Wise develops
evidence controverting plaintiffs’ declarations, and it awarded plaintiffs fees.
Wise’s appeal also challenges that award, but our conclusion that the order
must be reversed on the merits moots that issue.
6
bears the burden of producing evidence of, and proving by a preponderance of
the evidence, any fact necessary to the defense.” (Rosenthal, supra, at p. 413.)
The parties here dispute both the existence of an agreement (i.e., the
authenticity of plaintiffs’ signatures) and a defense to its enforcement (i.e.,
plaintiffs’ claim that it is unconscionable (Fisher v. MoneyGram International,
Inc. (2022) 66 Cal.App.5th 1084, 1094 [“unconscionability is a defense to
enforcement of a contract”] (Fisher)). On the defense of unconscionability,
plaintiffs bore the burden of proof. (Ibid.) As to the existence of an agreement,
Wise bore the ultimate burden of proof, but the court was obliged to resolve
the dispute using a three-step burden-shifting process. (Espejo v. Southern
California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1056
(Espejo).)
The arbitration proponent must first recite verbatim, or provide a copy
of, the alleged agreement. (Cal. Rules of Court,6 rule 3.1330; Condee v.
Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.) A movant can
bear this initial burden “by attaching a copy of the arbitration agreement
purportedly bearing the opposing party’s signature.” (Espejo, supra,
246 Cal.App.4th at p. 1060.) At this step, a movant need not “follow the
normal procedures of document authentication” and need only “allege the
existence of an agreement and support the allegation as provided in
rule [3.1330].” (Condee, supra, at pp. 218–219.)
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—in this instance, by disputing the authenticity of their signatures.
To bear this burden, the arbitration opponent must offer admissible evidence
creating a factual dispute as to the authenticity of their signatures. The
6 All undesignated rules citations are to the California Rules of Court.
7
opponent need not prove that his or her purported signature is not authentic,
but must submit sufficient evidence to create a factual dispute and shift the
burden back to the arbitration proponent, who retains the ultimate burden of
proving, by a preponderance of the evidence, the authenticity of the
signature. (Espejo, supra, 246 Cal.App.4th at p. 1060.)7
On appeal, we review orders denying motions to compel arbitration for
abuse of discretion unless the matter presents a pure question of law, which
we review de novo. (Espejo, supra, 246 Cal.App.4th at pp. 1056–1057.) Each
question in this appeal is one of law. As to the existence of an agreement, we
review de novo the trial court’s ruling that plaintiffs’ evidence was sufficient
to create a factual dispute shifting the burden of production back to Wise. As
to the unconscionability defense, the terms of the agreement are undisputed,
so we review de novo whether they are unconscionable. (Fisher, supra,
66 Cal.App.5th at p. 1094 [“ultimate determination of unconscionability . . . is
an issue of law, not fact”].)
7 In Condee v. Longwood Management Corp., supra, 88 Cal.App.4th
215, the Fourth Appellate District stated, “Once the petitioners had alleged
that the agreement exists, the burden shifted to respondents to prove the
falsity of the purported agreement.” (Id. at p. 219, italics added.)
Subsequently, in Toal v. Tardiff (2009) 178 Cal.App.4th 1208, the same court
quoted the discussion of the parties’ respective burdens in Rosenthal, supra,
14 Cal.4th 394, quoted the above passage from Condee, and stated, “To the
extent Condee conflicts with Rosenthal, our Supreme Court’s decision is
controlling.” (Toal, supra, at p. 1219, fn. 8.) The correct rule is thus that if an
arbitration proponent makes an adequate initial showing that an agreement
exists, it shifts to the opposing party not the ultimate burden of proof but
only a burden of production of evidence creating a dispute as to their
signature’s authenticity; the ultimate burden of proof remains with the
arbitration proponent.
8
2. Plaintiffs Offered No Admissible Evidence Creating a
Dispute As to the Authenticity of their Physical Signatures.
Wise submitted copies of the agreement bearing plaintiffs’ apparent
handwritten signatures. In response, no plaintiff declared that he had not
signed the agreement, or that his physical signature was forged or
inauthentic. To the contrary, each plaintiff declared that on his first day of
work he was given a stack of documents, was told “to quickly sign the
documents so I could get to work,” and “signed the stack of documents
immediately and returned them” (italics added). Each added, “I do not recall
ever reading or signing any document entitled Binding Arbitration
Agreement . . . . I do not know how my signature was placed on [the
document].” Each plaintiff stated further that if he had understood that the
agreement waived his right to sue Wise, he would not have signed it.
That evidence does not create a factual dispute as to whether plaintiffs
signed the agreement. The declarations explicitly acknowledge that plaintiffs
signed a “stack of documents” and do not deny that the stack included the
agreement. Although the plaintiffs state they do not recall signing the
agreement, there is no conflict between their having signed a document on
which their handwritten signature appears and, two years later, being
unable to recall doing so. In the absence of any evidence that their purported
signatures were not their own, there was no evidence that plaintiffs did not in
fact sign the agreement.
In holding that plaintiffs’ declarations shifted the burden back to Wise,
the court cited two distinguishable cases involving electronic signatures:
Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541 (Bannister)
and Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836 (Ruiz). In
Ruiz, the court denied enforcement of an arbitration agreement purportedly
signed electronically by Ruiz, an employee. Ruiz declared that he “did not
9
recall signing any arbitration agreement,” and if he had been given such an
agreement, he would not have signed it. (Id. at p. 840.) The employer offered a
declaration that explained how it disseminated the agreement and how
employees electronically executed it, yet “did not indicate whether or if so how
[the employer] ascertained that Ruiz electronically signed, or was the person
who electronically signed, . . . the 2011 agreement.” (Id. at p. 841.) Applying
the Uniform Electronic Transactions Act (Civ. Code, § 1633.1 et seq.), the
Fourth Appellate District held that the employer had not borne its burden of
proving that the electronic signature was “the act of” the employee. (Ruiz,
supra, 232 Cal.App.4th at pp. 842–845, citing Civ. Code, § 1633.9, subd. (a).)
The other case the trial court cited, Bannister, supra, 64 Cal.App.5th
541, also involved an electronic signature and facts very different from those
here.8 Neither case has any bearing on the situation in the present case. An
individual cannot confirm or deny the authenticity of an electronic signature
by viewing a computer printout of the person’s printed name followed by the
words “(Electronic Signature).” In such a case, the individual’s inability to
recall signing electronically may reasonably be regarded as evidence that the
person did not do so. However, an individual is capable of recognizing his or
8
The employer in Bannister acquired a company where Bannister
worked. (Bannister, supra, 64 Cal.App.5th at p. 544.) The employer’s HR
manager, Matson, declared that she visited the site, sat next to Bannister,
and watched her complete an onboarding process on a computer, during
which Bannister electronically executed the arbitration agreement. (Id. at
p. 546.) But Bannister declared that the onboarding was rushed, and that she
watched Matson herself onboard 20 employees in one day, including
Bannister herself, by entering their information into Matson’s laptop; that
Matson orally elicited identifying information from Bannister without ever
showing her what she was typing; and that Bannister never touched the
keyboard or saw any of the documents she allegedly electronically signed. (Id.
at pp. 546–547.)
10
her own personal signature. If the individual does not deny that the
handwritten personal signature is his or her own, that person’s failure to
remember signing is of little or no significance.
Plaintiffs cite no decision applying the decision in Ruiz to a
handwritten signature, but we acknowledge that one recent case has done so:
Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158. The
employer in Gamboa relied on a copy of an arbitration agreement that bore
Gamboa’s handwritten signature. (Id. at pp. 163, 168.) Gamboa filed a
declaration stating that “she reviewed the arbitration agreement . . . but does
‘not remember these documents at all’ ”; that “before this case, no one had
ever told her about an arbitration agreement or explained what it was”; and
that “if she had known about the arbitration agreement and had been told
about its provisions, she would not have signed it.” (Id. at p. 163.) The Second
Appellate District held that Gamboa bore “her burden on the second step [of
the burden-shifting process] by filing an opposing declaration, saying she did
not recall the agreement and would not have signed it if she had been aware
of it.” (Gamboa, supra, 72 Cal.App.5th at p. 167.) The court likened her
showing to that in Ruiz. (Id. at pp. 167–168.) The court regarded the fact that
Gamboa’s signature was handwritten, while the purported signature in Ruiz
was electronic, as “a distinction without a legal difference” because “electronic
and handwritten signatures have the same legal effect and are equally
enforceable.” (Id. at p. 168, citing Civ. Code, § 1633.7.)9
9 The court concluded its analysis of the second step as follows: “[W]e
need not decide whether Gamboa challenged the authenticity of her
purported signature on the arbitration agreement. It was enough that she
challenged the authenticity of the agreement by saying under penalty of
perjury that she did not remember it.” (Gamboa v. Northeast Community
Clinic, supra, 72 Cal.App.5th at p. 168.) We question how the “authenticity of
11
With all respect, we disagree. While handwritten and electronic
signatures once authenticated have the same legal effect, there is a
considerable difference between the evidence needed to authenticate the two.
Authenticating an electronic signature if challenged can be quite daunting.
(See, e.g., Espejo, supra, 246 Cal.App.4th at pp. 1061–1062.) An individual
cannot affirm or disavow an electronic signature from the face of a computer
printout, but an individual normally can recognize or disavow a handwritten
signature that purports to be his or her own. (See, e.g., Arkwright Mutual
Ins. Co. v. State Street Bank & Trust Co. (Mass. 1998) 703 N.E.2d 217, 220
[time limit for claim against bank based on forged check “ ‘recognizes that
there is little excuse for a customer not detecting an alteration of his own
check or a forgery of his own signature’ ”], quoting Official Cmt. to Uniform
Com. Code, § 4406(4), 2B West’s U.Laws Ann. 400–401 (Master ed. 1991).) If
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 that 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.
Even if plaintiffs’ assertion that they did not recall signing the
agreement were considered sufficient to meet their burden of producing
evidence to return the burden to Wise, the record contains the declaration of
George Allen, Wise’s custodian of records, identifying the agreement. Based
on lack of personal knowledge, plaintiffs objected to the admissibility of
Allen’s statements in the declaration that each plaintiff signed the
agreement. However, plaintiffs did not object to Allen’s attestation that the
the agreement” can be challenged without challenging the authenticity of the
plaintiff’s signature on that agreement.
12
document attached to his declaration was a true and correct copy of the
agreement, nor did they object to the receipt of the agreement in evidence.
The court sustained plaintiffs’ objections without explanation, presumably on
the ground advanced by plaintiffs, that Allen was not yet employed by Wise,
or present, on the date each plaintiff allegedly signed the agreement, so could
not confirm that they did so. But the custodian of a document need not have
been present or employed when the document was created or signed to
authenticate a document in a company’s files (see Estate of O'Connor (2017)
16 Cal.App.5th 159, 170 [any qualified witness knowledgeable about
documents may lay foundation for business records]; Ramos v. Westlake
Services LLC (2015) 242 Cal.App.4th 674, 684 [“no strict requirement as to
how a party authenticates a writing”], citing Evid. Code, § 1410), as plaintiffs
implicitly acknowledged by not objecting to the exhibits.
Moreover, as indicated above, plaintiffs acknowledged that although
they did not read the papers, they did sign those included in the “stack of
documents” with which they were presented. It is hornbook law that failing
to read an agreement before signing it does not prevent formation of a
contract. (Upton v. Tribilcock (1875) 91 U.S. 45, 50 [“It will not do for a
[person] to enter into a contract and when called upon to respond to its
obligations, to say that [they] did not read it when [they] signed it, or did not
know what it contained.”]; Hawkins v. Hawkins (1875) 50 Cal. 558, 560
[similar]; 1 Williston on Contracts § 4:19 (4th ed. 2007).) That settled rule
cannot be evaded by adding, “. . . and if I had read the contract, I wouldn’t’ve
signed it.” Plaintiffs’ allegation as to why they did not read the contract
before signing it—i.e., that they were pressured to sign it quickly and not
given time to read it—is material only to whether enforcement of the
agreement is barred by the defense of unconscionability, to which we now turn.
13
3. Plaintiffs Did Not Prove the Agreement Is Unconscionable.
Unconscionability entails “ ‘ “ ‘an absence of meaningful choice on the
part of one of the parties together with contract terms which are unreasonably
favorable to the other party.’ ” ’ ” (Fisher, supra, 66 Cal.App.5th at p. 1093.) It
has “both a procedural and a substantive element, the former focusing on
oppression or surprise due to unequal bargaining power, the latter on overly
harsh or one-sided results.” (Ibid.) Both elements must be present, but courts
assess them on a sliding scale: “the more substantively oppressive the
contract terms, the less evidence of procedural unconscionability is required
to conclude the terms are unenforceable, and vice versa.” (Ibid.)
On appeal, Wise essentially acknowledges that plaintiffs’ declaration
offers substantial evidence that the agreement was procedurally
unconscionable. We may assume as much, but plaintiffs have not shown any
element of substantive unconscionability. While the scale is sliding, there
must be some weight on each side. (Fisher, supra, 66 Cal.App.5th at p. 1093.)
The trial court based its finding of substantive unconscionability on two
factors.10 One is that the agreement states that it is governed by the FAA. In
the view of the trial court, this provision violates section 925, which forbids
an employer to “require an employee who primarily resides and works in
California, as a condition of employment, to agree to a provision that would
. . . [¶] . . . [d]eprive the employee of the substantive protection of California
10In the “substantive unconscionability” section of its order, the court
added that some of the arbitration provisions cited by Wise are “hidden” in
separate documents. We need not address that part of the ruling, both
because it concerns procedural rather than substantive unconscionability and
because we base our analysis solely on the terms of the agreement itself.
14
law with respect to a controversy arising in California.” (§ 925, subd. (a).11) We
disagree.
The FAA does not prescribe substantive rules of law for resolving
disputes. It does not displace the substantive law of California (or of any
other state) that applies to the resolution of disputes subject to arbitration
under an agreement covered by the FAA. “ ‘ “[B]y agreeing to arbitrate a
statutory claim, a party does not forgo the substantive rights afforded by the
statute; it only submits to their resolution in an arbitral, rather than a
judicial, forum.” ’ ” (Circuit City Stores, Inc. v. Adams (2001) 532 U.S. 105,
123.) That is surely why, as Wise points out, no published opinion holds that
a contract violates section 925 by invoking the FAA; decisions applying
section 925 involve contracts requiring California employees to litigate claims
in, or under the substantive law of, another state.12 Plaintiffs cite no other
authority.
The trial court’s second basis for finding the agreement substantively
unconscionable was “the seemingly neutral, but practically one-sided language
which gives the choice of the arbitration forum to the party against whom the
11 Section 925, subdivision (a)(1) also bars contract terms requiring
California employees to agree “to adjudicate outside California a claim
arising in California.” Plaintiffs do not claim any violation of that provision.
12
See LGCY Power, LLC v. Superior Court (2022) 75 Cal.App.5th 844,
852 [clause requiring litigation in Utah under Utah law]; Midwest Motor
Supply Co. v. Superior Court (2020) 56 Cal.App.5th 702, 707 [clause
requiring litigation in Ohio]; cf. Ryze Claim Solutions LLC v. Superior Court
(2019) 33 Cal.App.5th 1066, 1068 [clause requiring litigation in Indiana]; see
also Zhang v. Superior Court (2022) 85 Cal.App.5th 167, 171–172, 175
[section 925 did not strip New York court of jurisdiction to enforce delegation
clause in arbitration agreement stating that arbitrator is to decide whether
plaintiff qualified as “employee” entitled by section 925 to void forum-
selection clause and require that arbitration occur in California].)
15
claim is made”—which the court assumed was likely to be Wise. We need not
question that assumption, but we do not agree that the ability to choose
between the two arbitration providers affords Wise a significant advantage
rendering the agreement unconscionable. Both providers are well recognized
and respected alternative resolution firms. Neither plaintiffs nor the court
articulate any reason why the ability to choose between the two gives the
defendant an advantage—for example, evidence that arbitrators associated
with one service tend to rule in favor of employers, either generally or in
particular types of cases.
On appeal, plaintiffs contend the agreement is unconscionable for a
third reason that they raised without success below. Plaintiffs argue that the
agreement does not expressly state that the arbitration will comply with the
minimal requirements for the mandatory arbitration of FEHA claims
articulated in Armendariz v. Foundation Health Psychcare Services, Inc. (2000)
24 Cal.4th 83, 90–91, 113. The agreement does not specify that the arbitrator
will be neutral, issue a written award subject to limited judicial review and
award all remedies available in court, or that Wise will pay all costs unique
to arbitration. (Id. at pp. 103–104, 106–107, 110–111.) But neither does the
agreement expressly withhold or negate any of those elements. Wise concedes
that the terms are required and submitted proposed orders recognizing
them.13 If an arbitration agreement covers FEHA claims and is silent as to
the minimal elements of fairness required by Armendariz, courts will infer
13 Plaintiffs contend that an employer cannot “ ‘ “resuscitate a legally
defective contract merely by offering to change it,” ’ ” citing O’Hare v.
Municipal Resource Consultants (2003) 107 Cal.App.4th 267, 280.) But the
contract there had an express term contrary to one required by Armendariz.
(Id. at pp. 279–280.) Here, the court need only infer terms consistent with
Armendariz on issues as to which the contract is silent.
16
those terms. (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1075, fn. 1,
1080–1082 [agreement’s silence as to judicial review, scope of remedies, and
allocation of costs did not bar enforcement; court could infer requisite terms];
Armendariz, supra, 24 Cal.4th at p. 113.)
Thus, there is no basis to conclude that the arbitration agreement
suffers from substantive unconscionability, and the court erred in refusing to
compel arbitration on this alternative ground.
DISPOSITION
The order denying defendant Wise Auto Group’s motion to sever the
complaints of plaintiffs Leroy Iyere, Phillip Derbigny, and Michael Worlow,
and to compel each plaintiff individually to submit his claims to arbitration,
and awarding plaintiffs attorney fees incurred to oppose the motion is
reversed, and the matter is remanded with directions to enter an order
granting defendant’s motion to compel arbitration in accord with the binding
arbitration agreement.
POLLAK, J.*
WE CONCUR:
BROWN, Acting P. J.
GOLDMAN, J.
*
Retired Presiding Justice of the Court of Appeal, First Appellate District,
Division Four, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
17
Trial court: Marin County Superior Court
Trial judge: Honorable James Chou
Counsel for plaintiffs and J. WRIGHT LAW GROUP, P.C.
respondents: Jamie Wright, Esq.
Counsel for defendant and appellant: Laurie E. Sherwood
Mary Watson Fisher
18