B334775
Cal. Ct. App.Apr 14, 2025Background
- Adolfo Agundez sued his former employer, Do & Co Los Angeles, Inc., for disability discrimination and related claims under the California Fair Employment and Housing Act (FEHA), plus a Labor Code retaliation claim.
- Do & Co moved to compel arbitration, asserting Agundez had signed a mandatory arbitration agreement required for employment.
- Agundez challenged the enforceability of the arbitration agreement, arguing it was both procedurally and substantively unconscionable, noting his limited English proficiency and lack of recollection signing.
- The trial court found the agreement procedurally unconscionable (take-it-or-leave-it, mandatory as a condition of employment, in English only) and substantively unconscionable (limited discovery, mandatory informal resolution, fee-shifting).
- The court found severance infeasible due to pervasive unconscionability and denied Do & Co’s motion to compel arbitration.
- On appeal, Do & Co argued for the first time that the agreement’s delegation clause required arbitrability issues (including unconscionability) to be decided by an arbitrator, not the court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides unconscionability: court or arbitrator? | Court should decide, unconscionability apparent | Arbitrator should decide under delegation clause | Court properly decided; Do & Co forfeited delegation argument |
| Procedural unconscionability | Agreement was take-it-or-leave-it, limited English | Agreement satisfied legal requirements | Agreement was procedurally unconscionable |
| Substantive unconscionability | Unfair discovery limits, fees, and mandatory steps | No substantive unconscionability, any issues severable | Agreement was substantively unconscionable |
| Severability | Unconscionability pervasive, can't sever | Sever any unenforceable provisions | Severance infeasible, agreement permeated by unconscionability |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (Cal. 2000) (establishes requirements for enforceable mandatory employment arbitration agreements)
- Nielsen Contracting, Inc. v. Applied Underwriters, Inc., 22 Cal.App.5th 1096 (Cal. App. 2018) (delegation of threshold enforceability questions to arbitrator must be clear and unmistakable)
- Mendoza v. Trans Valley Transport, 75 Cal.App.5th 748 (Cal. App. 2022) (delegation argument forfeited if not properly raised at trial court)
- Gilman v. Dalby, 61 Cal.App.5th 923 (Cal. App. 2021) (issues not raised in trial briefs but at hearing are forfeited for appeal)