Flores v. Nature's Best Distribution, LLC
7 Cal. App. 5th 1
| Cal. Ct. App. | 2016Background
- Flores sued Nature’s Best and affiliated entities for FEHA claims and wrongful termination after her termination while on medical leave.
- Defendants petitioned to compel arbitration based on a 2001 "Agreement for Alternative Dispute Resolution" allegedly signed by Flores.
- The Agreement required AAA mediation/arbitration for "all employee disputes" except those covered by a collective bargaining agreement (CBA); employer signature block was blank.
- Defendants submitted HR declarations (Bonin) authenticating the Agreement and later produced or referenced CBAs (Teamsters Local 692 and Local 848) and various AAA rules in reply/errata.
- Flores denied recalling or being shown the ADR Agreement and challenged its authentication, scope, and unconscionability; she also argued defendants failed to follow the Agreement’s mediation prerequisite.
- The trial court denied the petition, finding ambiguity about (1) with which employer Flores contracted, (2) which disputes fell under the Agreement versus a CBA, and (3) which AAA rules governed; the court therefore found no mutual agreement to arbitrate and did not reach unconscionability analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Flores agreed to submit her claims to binding arbitration | Flores says she does not recall signing or being shown the ADR Agreement and disputes authentication | Defendants say Flores signed the 2001 ADR Agreement and produced HR records and signatures to prove it | No enforceable agreement shown; ambiguity about parties and terms means no mutual meeting of the minds on arbitration |
| Whether the Agreement clearly defines which disputes are subject to AAA arbitration vs. CBA grievance/arbitration | Agreement ambiguous; Flores contends CBA procedures may apply to her claims | Defendants rely on the standalone ADR Agreement and later-presented CBAs to argue arbitration applies | Agreement ambiguous as to which disputes are covered and defendants failed to analyze or identify which CBA (if any) controlled; ambiguity defeats enforcement |
| Whether the Agreement unambiguously identified applicable AAA rules | Flores notes AAA has many different rule sets and the Agreement didn’t specify or provide rules | Defendants later relied on different AAA rule sets (Labor Rules; Employment Arbitration Rules) and filed errata attaching rules | Agreement failed to specify which AAA rules applied and defendants didn’t prove which rules governed at signing; ambiguity supports denial |
| Whether arbitration provision was unconscionable and severable | Flores argued procedural and substantive unconscionability (take‑it‑or‑leave‑it, cost-sharing, waiver of appeal) | Defendants argued unconscionability could be severed and costs limited | Court did not reach unconscionability in depth because it found no valid agreement; denial affirmed on formation/ambiguity grounds |
Key Cases Cited
- Rosenthal v. Great Western Fin. Securities Corp., 14 Cal.4th 394 (1996) (petitioner bears preponderance burden to prove existence of arbitration agreement)
- Mitri v. Arnel Management Co., 157 Cal.App.4th 1164 (2007) (contract interpretation principles; read contract as whole)
- Serafin v. Balco Properties Ltd., LLC, 235 Cal.App.4th 165 (2015) (discusses severability and unconscionability issues in arbitration agreements)
- Nguyen v. Applied Medical Resources Corp., 4 Cal.App.5th 232 (2016) (addressed unconscionability and severance but did not resolve formation/meeting‑of‑minds issues)
- Baltazar v. Forever 21, Inc., 62 Cal.4th 1237 (2016) (California Supreme Court guidance on unconscionability review of arbitration agreements)