MacIas v. Excel Building Services LLC
767 F. Supp. 2d 1002
N.D. Cal.2011Background
- Macias began working for Excel in 2004 as a janitor, later promoted to janitorial supervisor.
- She alleges she performed both janitorial and supervisory duties and was unpaid for overtime.
- Macias became pregnant in 2009 and was hospitalized for pregnancy-related issues in August 2009.
- Doctors advised a three-week break, lighter duties, and more breaks; Excel allegedly denied accommodate requests.
- In December 2009, Macias and Guerrero created a written maternity/ bonding leave plan; Macias began leave Jan 31, 2010 and gave birth Feb 9, 2010.
- Macias alleges a March 31, 2010 meeting terminated her employment with a claim that women do not work well after birth; she declined papers including a waiver/settlement offer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Excel arbitration agreement is procedurally unconscionable | Macias argues adhesion, take-it-or-leave-it form. | No meaningful negotiation or surprise; terms were clear. | Procedurally unconscionable |
| Whether the Excel arbitration agreement is substantively unconscionable | Agreement is one-sided with lack of mutuality and unilateral term changes. | Some bilaterality and business justifications exist. | Substantively unconscionable |
| Whether the agreement's lack of mutuality is sufficient to render it unconscionable | Arbitration covers termination/discrimination claims, not employee benefits; employer claims not similarly constrained. | Arbitration applies to disputes arising from employment as a whole; some claims excluded are acceptable. | Lack of mutuality supports unconscionability |
| Whether Excel's unilateral power to modify the Handbook/ADRP renders the agreement unconscionable | Excel may change terms without notice, undermining voluntariness. | Changes require written notice and Board approval; implied terms can fill gaps. | Unconscionable due to unilateral modification power |
| Whether unconscionable terms can be severed or require invalidation of the entire agreement | Some terms could be severed to preserve arbitration. | Severing would gut the agreement; court should not rewrite it. | Unconscionable in entirety; cannot sever |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (Cal. 2000) (five factors for enforceable arbitration in employment agreements)
- Ingle v. Circuit City Stores, Inc., 328 F.3d 1165 (9th Cir. 2003) (mutuality and business realities affect unconscionability)
- Stirlen v. Supercuts, Inc., 51 Cal.App.4th 1519 (Cal. App. 4th Dist. 1997) (adhesive employment contracts raise procedural unconscionability)
- Davis v. O’Melveny & Myers, 485 F.3d 1066 (9th Cir. 2007) (adhesion contract factors and bargaining power analysis)
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (Cal. 2000) (recognizes bilateral concerns and Armendariz framework)
- Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (federal policy favoring arbitration)
- Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469 (9th Cir. 1991) (scope of arbitrability and limits of FAA review)