ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION
INTRODUCTION
Gloria Lara brings this lawsuit against Defendant Onsite Health, Inc. alleging a retaliatory discharge based on her opposition to Onsite’s violations of minimum wage and overtime laws. Compl. ¶ 1, Dkt. No. 1. Pending before the Court is Onsite’s Motion to Compel Arbitration. Dkt. No. 5. Pursuant to Civil Local Rule 7~l(b), the Court finds this matter suitable for disposition without oral argument and VACATES the September 20, 2012 hearing. After consideration of the parties’ briefs, and controlling authorities, the Court GRANTS Onsite’s Motion.
BACKGROUND
The following factual background is taken from Lara’s Complaint. Onsite provides mobile dental and medical services to governmental and private entities. Compl. ¶ 5. Lara began working for Onsite in 2008 as a part-time hourly wage employee doing registered dental assistant work, earning $28.00 per hour. Id. ¶¶ 5, 6. Starting in July 2010, Lara began working full-time for Onsite, earning $2,427.09 twice a month. Id. ¶ 6. As part of her employment, Lara signed the following Binding Arbitration Agreement on July 30, 2010:
To aid in the rapid and economical resolution of any disputes which may arise under this offer letter agreement, you and Onsite Health, Inc. (the Company) agree that any and all claims, disputes or controversies of any nature whatsoever arising from or regarding the interpretation, performance, negotiation, execution, enforcement or breach of this offer letter agreement, your employment, or the termination of your employment, shall be resolved, to the greatest extent permitted by applicable law, by confidential, final and binding arbitration conducted before a single arbitrator with JAMS, Inc ... or ... the American Arbitration Association (“AAA”).... You and the company acknowledge that by agreeing to this arbitration procedure, we each waive the right to resolve any such dispute through a jury by trial, judge or administrative proceeding. You will have the right to be represented by legal counsel at any arbitration proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be available under applicable law in a court proceeding; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based. The Company shall bear JAMS’ arbitration fees and administrative costs.Nothing in this Agreement shall prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.
Ritz Deck, Ex. 1, Dkt. No. 6-2 (emphasis in original).
As a full-time employee, Lara alleges that she was a non-exempt employee, but she regularly worked overtime, often working 10 hours per day. Id.
On April 20, 2011, Lara notified Onsite that she needed to be out for a disability leave. Id. ¶ 7. Onsite approved the leave for seven days. Id. At the same time, Lara also notified Onsite that she believed it was wrong to not pay her overtime. Id. ¶ 8. Onsite responded that Lara was a full-time salaried employee and was therefore not entitled to overtime compensation. Id. ¶ 9.
Lara’s disability leave was subsequently extended by her treating health care provider until June 1, 2011, with a return to work date of June 2. Id. ¶ 11. Lara emailed Laurie Mann (her immediate supervisor) and Paula Ritz (Onsite’s Director of Human Resources) on May 25 and 31, 2011, stating that she intended to return to work on June 2 and asking for a schedule. Id. ¶¶ 12, 13. However, on June 1, 2011, Lara received an email from Ritz stating that her position with Onsite had been eliminated due to organizational restructuring and a lack of business. Id. ¶¶ 12, 14.
Lara filed the present Complaint on June 28, 2012. She alleges retaliatory discharge under 29 U.S.C. § 216, wrongful discharge, failure to grant a reasonable accommodation for her disability, violation of California Labor Code section 2699, and claims under the California Fair Employment and Housing Act (“FEHA”).
On August 9, 2012, Onsite filed the present Motion to Compel Arbitration. Dkt. No. 5-1. In its motion, Onsite argues that Lara is bound by the July 30 Arbitration Agreement. Def.’s Mot. at 2. Specifically, Onsite argues that there is a valid Arbitration Agreement, neither party has waived the right to arbitrate, and no grounds exist for invalidating the provision. Id. at 2, 3, 5. Onsite also seeks an order under 9 U.S.C. § 3 staying the pending litigation. Id. In response, Lara argues that the Arbitration Agreement is both proeedurally and substantively unconscionable, and it is therefore invalid and unenforceable. Pl.’s Opp’n at 1, Dkt. No. 6.
LEGAL STANDARD
Under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the revocation of a contract.” 9 U.S.C. § 2; see AT & T Mobility, LLC v. Concepcion, — U.S.-, -,
The FAA reflects “both a ‘liberal federal policy favoring arbitration,’ and the ‘fundamental principle that arbitration is a matter of contract.’ ” Concepcion,
DISCUSSION
A. Whether a Valid Arbitration Agreement Exists
The first task is to determine whether there is an agreement between the parties to arbitrate. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
In California, the elements for a viable contract are (1) parties capable of contracting; (2) their consent; (3) a lawful object; and (4) sufficient cause or consideration. United States ex rel. Oliver v. Parsons Co.,
B. Whether Onsite May Enforce the Arbitration Agreement
The FAA “imposes certain rules of fundamental importance, including the ba
Here, both Onsite and Lara have tendered the Arbitration Agreement. Ritz Decl., Ex. 1; Lara Deck, Ex. 2. Further, Lara acknowledges having signed the agreement. Lara Deck ¶¶ 4-5. The agreement explicitly provides that Lara and Onsite agree that any and all claims shall be resolved by final and binding arbitration. Ritz Deck, Ex. 1; Lara Deck, Ex. 2. Accordingly, the Court finds that Onsite may enforce the Arbitration Agreement.
C. Whether the Arbitration Agreement Is Unconscionable
Even if a valid Arbitration Agreement exists and Onsite is able to enforce it, Lara argues that it is unenforceable because it is unconscionable. Pb’s Opp’n at 2-18. Because Lara is the party opposing enforcement of the otherwise valid Arbitration Agreement, she bears the burden to prove this defense. Engalla v. Permanente Medical Group, Inc.,
“General contract defenses such as fraud, duress or uneonscionability, grounded in state contract law, may operate to invalidate arbitration agreements.” Circuit City Stores v. Adams,
Uneonscionability has both a procedural and a substantive component. Armendariz v. Found. Health Psychcare Servs.,
1. Procedural Uneonscionability
“The procedural element of the uneonscionability analysis concerns the manner in which the contract was negotiated and the circumstances of the parties at that time.” Gatton v. T-Mobile USA, Inc.,
Here, Lara argues that the Arbitration Agreement is procedurally unconscionable because there was both oppression and surprise. First, Lara contends that the agreement was oppressive because it was drafted by Onsite, the stronger party, and presented to her on a “take-it-or-leave it basis” without explanation. PI.’s Opp’n at 4. Lara further contends that it was hidden in a “bunch of other new hire papers given to her in a packet to sign without sufficient time to consider them or seek advice about them.” PL’s Opp’n at 1. Lara states that she was given only three days to review the documents and had no choice but to sign them if she wanted her new full-time job. Lara Decl. ¶ 9. Second, Lara argues that the agreement has the element of unfair surprise. PL’s Opp’n at 4. Specifically, Lara contends that the agreement was “buried in a bunch of other ‘new employee paperwork,’ ” yet no one from HR was present to answer questions and no one told her that an Arbitration Agreement was included in the paperwork. Id. at 4-5. Lara also argues that she signed an incomplete document because the agreement references rules of JAMS, but does not attach or explain the rules. Id. at 6.
In its Reply, Onsite appears to concede that the Arbitration Agreement can be considered procedurally unconscionable, focusing entirely on Lara’s substantive unconscionability arguments. Def.’s Reply at 2-8.
Here, it is not clear that the agreement has the element of unfair surprise. As part of her Declaration, Lara has included Onsite’s “New Hire Packet,” which includes a two-page letter from Paula Ritz and 22 pages of documents. Lara Decl., Ex. 1. A cursory review of these documents shows that the Arbitration Agreement is on a separate page, in normal-sized print, with the heading “BINDING Arbitration Agreement,” and requires that the employee sign directly under the terms of the agreement. Further, the Agreement explicitly states, in bold font: “You and the company acknowledge that by agreeing to this arbitration procedure, we each waive the right to resolve any such dispute through a jury by trial, judge or administrative proceeding. You will have the right to be represented by legal counsel at any arbitration proceeding.” Lara Decl., Ex. 2. The Arbitration Agreement provisions are not buried, as Lara contends, and thus, there was no unfair surprise about the terms to the agreement.
However, Onsite does not deny that the Arbitration Agreement was a condition of employment, and that it was presented on a take-it-or-leave-it basis. A contract is the product of oppression if it is a contract of adhesion, one in which there was an inequality of bargaining power denying the weaker party the opportunity to negotiate the terms of the contract. Armendariz, supra,
Onsite’s failure to attach the applicable JAMS rules to the arbitration provision, while not dispositive, also adds to the agreement’s procedural unconscionability. Samaniego v. Empire Today LLC,
Based on this analysis, the Court finds that Lara has met her burden of establishing procedural unconscionability.
2. Substantive Unconscionability
Substantive unconscionability concerns the terms of the Arbitration Agreement and whether those terms are overly harsh or one-sided. Armendariz,
Lara raises several arguments in support of her position that the Arbitration Agreement is substantively unconscionable. Pl.’s Opp’n at 7-18. The Court shall consider each in turn.
a. Proprietary Information, Inventions, and Nonr-Solicitation Agreement
Lara’s first argument concerns Onsite’s Proprietary Information Agreement, which she signed at or about the same time as the Arbitration Agreement. Lara Decl. ¶ 7; Ex. 3. Lara contends that under the Proprietary Information Agreement, Onsite can file a lawsuit in court for breach of the agreement, but the same right is not given to employees. PL’s Opp’n at 7. In response, Onsite argues that Lara mischaracterizes the scope of the Proprietary Information Agreement, which does not permit Onsite to file legal claims for damages, but instead allows it to file for injunctive relief. Def.’s Reply at 3. As this right to injunctive relief is consistent with the Arbitration Agreement, Onsite
Upon review of the Proprietary Information Agreement, the Court finds that Lara’s argument is without merit. Although Lara argues generally that the agreement permits Onsite to file a “lawsuit in court ... and does not give that same right to employees,” this argument mischaracterizes the scope of the agreement. Section 9.1 of the agreement provides:
I agree that it may be impossible to assess the damages caused by my violation of this Agreement or any of its terms. I agree that any threatened or actual violation of this Agreement or any of its terms will constitute immediate and irreparable injury to the Company and the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company may have for a breach or threatened breach of this Agreement.
Lara Decl., Ex. 3, § 9.1 (emphasis added). This right to injunctive relief is consistent with the Arbitration Agreement, which expressly states that “[njothing in this Agreement shall prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.” Lara Decl., Ex. 2. Thus, the Proprietary Information Agreement merely confirms the right to injunctive relief contained in the Arbitration Agreement.
Moreover, Lara cites to no provision in the Proprietary Information Agreement which prohibits an employee from seeking injunctive relief as provided in the Arbitration Agreement. In fact, the Court has reviewed the agreement in its entirety and finds no such provision. Instead, the evidence before the Court shows that the parties entered into an Arbitration Agreement that requires both parties to resolve any disputes by binding arbitration, with the exception of injunctive relief. Lara Deck, Ex. 2.
In her Opposition, Lara cites to three cases in support of her argument, all of which are inapplicable here. First, Lara cites to Stirlen v. Supercuts, in which the court held an arbitration clause unenforceable because, in part, it was unconscionably one-sided; specifically, the employer could use the court system for certain claims, but the employee was required to use arbitration for all his.
b. Injunctive Relief Provision
Lara’s second argument focuses on the injunctive relief provision in the Arbitration Agreement, which provides that, “Nothing in this Agreement shall prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.” Lara Decl., Ex. 2. Lara argues that, although this provision sounds mutual in nature, the practical effect is that it is one-sided in nature because employers are more likely to seek injunctive relief. PL’s Opp’n at 11. “An agreement may be unfairly one-sided if it compels arbitration of the claims more likely to be brought by the weaker party but exempts from arbitration the types of claims that are more likely to be brought by the stronger party.” Fitz,
Here, as to the mandatory fee award, there is no such mandatory fee-shifting agreement in this case. In fact, the Arbitration Agreement here provides that “[Onsite] shall bear JAMS’ arbitration fees and administrative costs.” Lara Deck, Ex. 2. Accordingly, this is inapplicable. However, as to the injunctive relief provision, the Trivedi court noted that “allowing the parties access to the courts only for injunctive relief favors [the employer], because it is more likely that ... the employer would seek injunctive relief.” Trivedi,
c. Onsite Did Not Sign the Arbitration Agreement
Lara’s third argument is that the Arbitration Agreement is non-mutual because Onsite did not sign it. Pl.’s Opp’n at 11-12. In response, Onsite argues that its intent to be bound is evidenced by the fact that the Agreement is printed on its company letterhead. Def.’s Reply at 6.
The signature of a party to be bound by a contract “need not be manually affixed, but may in some cases be printed, stamped or typewritten.” Marks v. Walter G. McCarty Corp.,
Here, the Court finds that Onsite intended to be bound by the Arbitration Agreement. First, Onsite’s intent is evidenced by the fact that the Agreement is printed on its company letterhead and, because Onsite submitted its offer of employment in this manner, the Court finds that Onsite intended to authenticate its name as a signature. Lara Decl., Ex. 2. Second, Onsite’s intent to be bound is further evidenced by the fact that it presented the Agreement to Lara as part of its New Hire packet, with a letter explaining that Lara must complete and sign all documents to be processed. Id. Third, the Agreement itself binds both parties to arbitration, repeatedly referring to “you and Onsite Health, Inc.,” or “you and the Company.” Id. This language establishes that both parties are bound to arbitrate any disputes, with the exception of injunctive relief. Thus, the Agreement is written in terms of both parties’ obligations and evidences Onsite’s intent to be bound. See Armendariz,
Lara’s fourth argument is that the Arbitration Agreement is substantively unconscionable because Onsite gives itself authority to modify it. Pl.’s Opp’n at 14. Specifically, Lara directs the Court’s attention to Onsite’s offer letter to her, which states: “No term or provision of this letter may be amended, waived, released, discharged or modified except in writing, except that [Onsite] may, in its sole discretion, adjust ... policies, procedures, etc.” Lara Deel., Ex. 4. Lara argues that the Arbitration Agreement specifically refers to arbitration as a “procedure,” and that the offer letter therefore gives Onsite unilateral discretion to alter it. Pl.’s Opp’n at 15.
In response, Onsite argues that the Arbitration Agreement itself contains no provision allowing it to unilaterally modify it. Def.’s Reply at 6-7. Onsite argues that the Court should look at the actual Agreement itself, not outside documents, to determine its enforceability. Id. at 7.
The Court agrees with Onsite. First, in terms of Onsite’s ability to unilaterally modify the Arbitration Agreement, no such provision can be found in the Agreement. Lara cites to several cases in support of her argument, (Pl.’s Opp’n at 15-16), but the Court need not consider these cases individually as they are all distinguishable for the same reason — they involve cases in which the arbitration agreements contained a unilateral modification clause that allowed the employer to modify any or all of the agreement. The Arbitration Agreement at issue here contains no such provision. Second, as discussed above, a challenge to the validity of an agreement to arbitrate is to be decided without reference to the larger contract within which it is contained. Rent-A-Center,
e. Judicial Review of the Arbitrator’s Decision
Lara’s fifth argument is that the Arbitration Agreement is substantively unconscionable because it does not provide for any judicial review of the arbitrator’s decision. PL’s Opp’n at 16. In response, Onsite argues that, so long as an arbitration agreement provides for a written decision and does not expressly preclude judicial review, the agreement must be interpreted to provide for judicial review. Def.’s Reply at 7-8.
In Armendariz, the court held that an arbitration agreement must provide, among other things, a requirement that award decision be written to enable judicial review.
The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be available under applicable law in a court proceeding; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim andthe relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based.
Lara Deck, Ex. 2. While the Agreement does not specifically state that the arbitrator’s decision is subject to judicial review, it is enough that the decision requires the arbitrator’s essential findings and conclusions. Armendariz,
f. Administrative Proceedings
Finally, Lara argues that the Arbitration Agreement is substantively unconscionable because it prohibits employees from initiating and participating in any administrative proceedings to resolve an employment dispute. Pl.’s Opp’n at 17. Specifically, the Arbitration Agreement provides: ‘You and the Company acknowledge that by agreeing to this arbitration procedure, we each waive the right to resolve any such dispute through a trial by jury, judge, or administrative proceeding.” Lara Deck, Ex. 2.
An arbitration agreement is substantively unconscionable if “it requires the employee to relinquish his or her relevant administrative and judicial rights under federal and state statutes.” Sparks v. Vista Del Mar Child and Family Serv.,
Here, the Agreement refers generally to the right to resolve disputes through a trial by jury, judge, or administrative proceeding, and does not specifically reference whether this refers to adjudicator of claims or a prosecutor of claims. When an arbitration provision is ambiguous, it must be interpreted, if reasonable,
3. Summary
Taken together, the Court finds that Lara has sufficiently demonstrated that the Arbitration Agreement is both procedurally and substantively unconscionable. The Agreement was drafted by Onsite, the stronger party, presented to Lara on a “take-it-or-leave it basis,” and it referred to but did not include JAMS’ rules. These all act to make the Agreement procedurally unconscionable. Further, the Agreement is substantively unconscionable because it contains an injunctive relief provision, which is unilateral in that it is more likely to be invoked by employers.
D. Severability
Once the Court determines that there is both procedural and substantive unconscionability, it must determine whether it is able to sever the unconscionable terms and enforce the remainder of the Agreement. Armendariz,
In Armendariz, the California Supreme Court found that two factors weighed against severance: (1) multiple unlawful provisions, indicating a systematic effort to impose arbitration as an inferior forum that works to one party’s advantage; and (2) the fact that the court would have to reform the contract by augmenting it with additional terms after striking the multiple unlawful provisions. Id. at 124-25, 99 Cal.
Here, striking the entire arbitration provision is not appropriate because Lara has not shown that the Arbitration Agreement is permeated with unconscionability. Most provisions contain the essential bilaterality of an arbitration agreement between an employer and an employee. In fact, as discussed above, only the injunctive relief provision is substantively unconscionable. And, because this provision is “collateral to the main purpose of the contract,” it is easily severable. Armendariz,
CONCLUSION
Based on the analysis above, the Court hereby GRANTS Defendant’s Motion to Compel Arbitration, but SEVERS the injunctive relief provision. As part of its motion, Onsite has also requested that the Court stay this case pending arbitration. Section 3 of the FAA requires a court to stay litigation of arbitral claims until such arbitration “has been had according to the terms of the agreement.” 9 U.S.C. § 3. Therefore, the Court STAYS this action pursuant to 9 U.S.C. § 3 pending completion of the required arbitration. All pending case management deadlines are VACATED.
IT IS SO ORDERED.
Notes
. Lara cites to two cases in support of her argument that Onsite’s failure to sign the Agreement renders it substantively unconscionable. Although both cases involved agreements in which only one party signed the agreement, these cases are both distinguishable in that they lacked mutuality — only one side was required to arbitrate. In Higgins v. Superior Court of Los Angeles Cnty.,
. In support of her argument, Lara cites to Sullenberger v. Titan Health Corp.,