*117Here, we again consider the enforceability of an agreement requiring arbitration of wage disputes.
*118Sonic-Calabasas A, Inc. v. Moreno (2011)
We originally granted review in this case to decide whether an arbitral scheme resembling civil litigation can constitute a sufficiently accessible and affordable process. Because the facts here involve an unusually high degree of procedural unconscionability, however, a definitive resolution of that specific question is unnecessary. Even if a litigation-like arbitration procedure may be an acceptable substitute for the Berman process in other circumstances, an employee may not be coerced or misled into accepting this trade. Considering the oppressive circumstances present here, we conclude the agreement was unconscionable, rendering it unenforceable.
I. BACKGROUND
The relevant facts are not in dispute. Ken Kho was hired as a service technician *720for One Toyota of Oakland (One Toyota) in January 2010.
The contract's arbitration clause is contained in a dense, single-spaced paragraph, written in a very small typeface that fills almost an entire page.
Kho's employment ended in April 2014. Several months later, he filed a complaint with the Labor Commissioner for unpaid wages. At a settlement conference before a deputy labor commissioner, One Toyota was represented by counsel; Kho appeared *721in propria persona. One Toyota contends its attorney demanded arbitration at the conference, presenting Kho with a copy of the signed arbitration agreement, but Kho and the Labor Commissioner *120dispute this account. Kho rejected One Toyota's settlement offer and requested a Berman hearing. The hearing was set in August 2015, some nine months later.
On the Friday before the Monday Berman hearing, One Toyota filed a petition to compel arbitration and stay the administrative proceedings. It did not serve these papers on Kho. On the morning of the hearing, One Toyota's attorney notified the Labor Commissioner by fax of its petition and asked that the hearing be taken off calendar. The hearing officer refused. One Toyota's attorney appeared at the scheduled time but left after serving Kho for the first time with the petition to compel. Proceeding without One Toyota, the hearing officer awarded Kho $102,912 in unpaid wages and $55,634 in liquidated damages, interest, and penalties. One Toyota sought to vacate the award. The Labor Commissioner intervened on Kho's behalf and opposed the motions to compel and vacate. One Toyota posted the required bond to permit de novo review of the award under Labor Code section 98.2. (See post , 251 Cal.Rptr.3d at pp. 722-723, 447 P.3d at p. 687.)
The trial court vacated the Labor Commissioner's award, concluding the hearing should not have proceeded in One Toyota's absence. The court did not compel arbitration, however. It found a high degree of procedural unconscionability attended the agreement's execution, which "created oppression or surprise due to unequal bargaining power." The court also found the agreement substantively unconscionable under Sonic II because it "fails to provide a speedy, informal and affordable method of resolving wage claims and has virtually none of the benefits afforded by the Berman hearing procedure." The court observed, "Contrary to the assumption that arbitration is intended to provide an inexpensive, efficient procedure to vindicate rights, the agreement in this case seeks, in large part, to restore the procedural rules and procedures that create expense and delay in civil litigation." In light of this ruling, the court declined to address the Labor Commissioner's argument that One Toyota waived its right to arbitrate by waiting too long to claim it.
The Court of Appeal reversed. Although it noted an "extraordinarily high" degree of procedural unconscionability in the agreement's execution, it concluded the agreement was not substantively unconscionable. The agreement had no objectionable terms and could be considered " 'harsh or one-sided' only in comparison to the various features of the Labor Code that seek to level the playing field for wage claimants." The arbitration would be sufficiently affordable under Sonic II because laws external to the agreement require that employers pay both the costs of arbitration (see Armendariz v. Foundation Health Psychcare Service, Inc. (2000)
II. DISCUSSION
A. The Berman Process
Before addressing Kho's unconscionability defense, we review the statutory procedures **687he waived by agreeing to arbitration. We also consider the significance of that waiver in light of Sonic I and Sonic II .
1. Statutory Procedures Available to Wage Claimants
The Labor Code provides an administrative procedure for recovery of unpaid wages. When an employer does not pay wages as required, the employee may either: (1) file a civil action in court, or (2) file a wage claim with the Labor Commissioner under sections 98 to 98.8. The administrative option was added in 1976 (see Stats. 1976, ch. 1190, §§ 4-11, pp. 5368-5371) and is commonly known as a "Berman" hearing.
If an employee files an administrative complaint, the Labor Commissioner may either accept the matter and conduct a Berman hearing ( § 98, subd. (a) ); prosecute a civil action on the employee's behalf (§ 98.3); or take "no further action ... on the complaint" ( § 98, subd. (a) ). The commissioner's staff may try to settle the complaint before holding a hearing or filing suit. (Dept. of Industrial Relations, Div. of Labor Stds. Enforcement (DLSE), Policies and Procedures for Wage Claim Processing (2012 rev.) p. 2.) Subject to extensions of time, Berman hearings must generally be held within 90 days after a matter is accepted. ( § 98, subd. (a).)
A Berman hearing is conducted by a deputy commissioner, who may issue subpoenas. ( Cal. Code Regs., tit. 8, §§ 13502, 13506.) The procedure "is designed to provide a speedy, informal, and affordable method of resolving wage claims." ( *122Cuadra v. Millan (1998)
Either party may appeal the decision to the superior court, which reviews the claim de novo. ( § 98.2, subd. (a).) An employer who appeals must post an undertaking in the amount of the award. (Id ., subd. (b).) On appeal, the Labor Commissioner may represent claimants "financially unable to afford counsel" and must represent any indigent claimant attempting to uphold the award while objecting to no part of it. (§ 98.4.) An unappealed decision is a final judgment, enforceable immediately. ( § 98.2, subds. (d), (e).) The commissioner is responsible for enforcement (id ., subd. (i)), which is entitled to court priority (id. , subd. (e)).
If an employer's appeal fails, the court determines costs and reasonable attorney *723fees incurred by the successful employee and orders payment by the losing appellant. ( § 98.2, subd. (c).) Claimants represented by the commissioner may still recover fees, consistent with the statute's goal of discouraging unmeritorious appeals. ( Lolley v. Campbell (2002)
2. The Sonic I and Sonic II Decisions
Sonic I and Sonic II addressed the validity of predispute agreements requiring wage claim arbitration. Sonic I held that it is against public policy for an employer to require employees to waive their Berman rights as a condition of employment, and that an arbitration agreement effectively waiving Berman rights is substantively unconscionable as a matter of law. ( Sonic I , supra , 51 Cal.4th at pp. 684-687,
Sonic I 's holdings were short-lived. Two months later, on a related question, Concepcion , supra ,
On remand, we acknowledged the Supreme Court's admonition that states "cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons." ( Concepcion , supra , 563 U.S. at p. 351,
Nevertheless, we noted that unconscionability remains a valid defense to enforcement, even after Concepcion . The overarching unconscionability question is whether an agreement is imposed in such an unfair fashion and so unfairly one-sided that it should not be enforced. Arbitration agreements could not be deemed categorically unconscionable simply because they entail a waiver of the Berman proceedings. ( Sonic II , supra , 57 Cal.4th at p. 1146,
The Sonic II majority opinion focused repeatedly on the need for accessible and affordable arbitration, reasoning that these were key benefits of the Berman process that parties to an arbitration agreement had decided to forgo. We stopped short of defining the requirements for an acceptable arbitration framework, however, and emphasized that arbitration can be structured in various ways "so that it facilitates accessible, affordable resolution of wage disputes," without necessarily replicating Berman protections. ( Sonic II , supra , 57 Cal.4th at p. 1147,
We did not decide whether the Sonic II agreement was substantively unconscionable under this standard. Recognizing that unconscionability is a fact-specific *725defense, we remanded for the trial court to examine additional evidence regarding the particulars of the arbitration process set out in the agreement. ( Sonic II , supra , 57 Cal.4th at pp. 1147-1148,
California law strongly favors arbitration. Through the comprehensive provisions of the California Arbitration Act ( Code Civ. Proc., § 1280 et seq. ), "the Legislature has expressed a 'strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution.' " ( Moncharsh v. Heily & Blase (1992)
" '[G]enerally applicable contract defenses, such as ... unconscionability, may be applied to invalidate arbitration agreements without contravening' the FAA" or California law. ( Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012)
The general principles of unconscionability are well established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party. ( Sonic II , supra , 57 Cal.4th at p. 1133,
Both procedural and substantive unconscionability must be shown for the defense to be established, but "they need not be present in the same degree." ( Armendariz , supra , 24 Cal.4th at p. 114,
The burden of proving unconscionability rests upon the party asserting it. ( Sanchez , supra , 61 Cal.4th at p. 911,
1. Procedural Unconscionability
The Court of Appeal observed that the arbitration agreement's execution involved an "extraordinarily high" degree of procedural unconscionability. We agree.
A procedural unconscionability analysis "begins with an inquiry into whether the contract is one of adhesion." ( Armendariz , supra , 24 Cal.4th at p. 113,
"The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the *127proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party's review **691of the proposed contract was aided by an attorney." ( Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015)
The circumstances here demonstrate significant oppression. The agreement was presented to Kho in his workspace, along with other employment-related documents. Neither its contents nor its significance was explained. One Toyota admits that Kho was required to sign the agreement to keep the job he had held for three years. Because the company used a piece-rate compensation system, any time Kho spent reviewing the agreement would have reduced his pay. Moreover, as the Court of Appeal explained, "Not only did One Toyota provide no explanation for its demand for his signature, it selected a low-level employee, a 'porter,' to present the Agreement, creating the impression that no request for an explanation was expected and any such request would be unavailing." By having the porter wait for the documents, One Toyota conveyed an expectation that Kho sign them immediately, without examination or consultation with counsel. One Toyota protests that Kho did not ask questions about the agreement, but there is no indication that the porter had the knowledge or authority to explain its terms. (See Carmona , supra , 226 Cal.App.4th at pp. 84-85,
The facts also support the trial court's finding of surprise. The agreement is a paragon of prolixity, only slightly more than a page long but written in an extremely small font. The single dense paragraph covering arbitration requires 51 lines. As the Court of Appeal noted, the text is "visually impenetrable" and "challenge[s] the limits of legibility."
The substance of the agreement is similarly opaque. The sentences are complex, filled with statutory references and legal jargon. The second sentence alone is 12 lines long. The arbitration paragraph refers to: the California Fair Employment and Housing Act; title VII of the Civil Rights Act of 1964; other unspecified "local, state or federal laws or regulations"; the National Labor Relations Act; the California Workers' Compensation Act; "California Small Claims" actions; the Department of Fair Employment and Housing; the Employment Development *728Department; the "Equal Opportunity Commission"; the federal and California arbitration acts; **692and six different sections of California's Civil Code and Code of Civil Procedure. A layperson trying to navigate this block text, printed in tiny font, would not have an easy journey.
With respect to arbitration costs, the agreement states: "If CCP § 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 instead of CCP § 1284.2." Code of Civil Procedure section 1284.2 states a default rule that, unless the agreement specifies otherwise, parties to an arbitration will bear their own expenses. However, Armendariz created an exception to this general rule for arbitrations of employment-related disputes. (See Armendariz , supra , 24 Cal.4th at pp. 110-111,
The document itself and the manner of its presentation did not promote voluntary or informed agreement to its terms. "Arbitration is favored in this state as a voluntary means of resolving disputes, and this voluntariness has been its bedrock justification." ( Armendariz , supra , 24 Cal.4th at p. 115,
*729"[A]rbitration 'is a matter of consent, not coercion.' " ( Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp. (2010)
2. Substantive Unconscionability
Substantive unconscionability examines the fairness of a contract's terms. This analysis "ensures that contracts, particularly contracts of adhesion, do not impose terms that have been variously described as ' " 'overly harsh' " ' ( Stirlen v. Supercuts, Inc. (1997)
Substantive terms that, in the abstract, might not support an unconscionability finding take on greater weight when imposed by a procedure that is demonstrably oppressive. Although procedural unconscionability alone does not invalidate a contract, its existence requires courts to closely scrutinize the substantive terms "to ensure they are not manifestly unfair or one-sided." ( Gentry , supra , 42 Cal.4th at p. 469,
Kho and the Labor Commissioner do not focus on the fairness of specific, isolated terms in the agreement. Rather, they contend One Toyota's arbitral process is so inaccessible and unaffordable, considered as a whole, that it does not offer an effective means for resolving wage disputes. (See Sonic II , supra , 57 Cal.4th at p. 1146,
*730However, a substantive unconscionability analysis is sensitive to "the context of the rights and remedies that otherwise would have been available to the parties." ( Sanchez , supra , 61 Cal.4th at p. 922,
As to accessibility, Kho first observes that, unlike in Berman proceedings, the agreement does not explain how to initiate arbitration. Industrial Welfare *131Commission (IWC) wage orders, required by law to be posted at the jobsite ( Lab. Code, § 1183, subd. (d) ), direct employees to contact the Labor Commissioner about wage-related violations, providing for this purpose both the Department of Industrial Relations website and a list of local labor commissioner offices. (See, e.g., IWC wage order No. 4-2001 ( Cal. Code Regs., tit. 8, § 11040 ); IWC wage order No. MW-2019 ( Cal. Code Regs., tit. 8, § 11000 ).) An employee can start the Berman process by filling out a simple form found on the website and in local offices. The form is rendered in many languages, and detailed instructions explain how to complete and file it. In contrast, One Toyota's agreement does not mention how to bring a dispute to arbitration, nor does it suggest where that information might be found.
Kho also contends it would be difficult for an unsophisticated, unrepresented wage claimant to effectively navigate the agreement's arbitral procedure. In the Berman process, a claimant need only fill out a complaint form, possibly assisted by a deputy labor commissioner, then attend a settlement conference and, in some cases, a hearing. (See Sonic II , supra , 57 Cal.4th at p. 1128,
The Berman process was specifically designed to give claimants a "speedy, informal, and affordable method" for resolving wage disputes. ( Cuadra , supra , 17 Cal.4th at p. 858,
We observed in Little v. Auto Stiegler, Inc. , supra , 29 Cal.4th at page 1075, footnote 1,
Our cases have taken a different approach in evaluating the compelled arbitration of wage claims, as compared to the arbitration of other types of disputes. Employees who agree to arbitrate claims for unpaid wages forgo not just their right to litigate in court, but also their resort to an expedient, largely cost-free administrative procedure. We explained repeatedly in Sonic II that, while the waiver of Berman procedures does not in itself render an arbitration agreement unconscionable, the agreement must provide in **696exchange an accessible and affordable forum for resolving wage disputes. ( Sonic II , supra , 57 Cal.4th at pp. 1146, 1147-1148, 1150,
It is true, as One Toyota notes, that the results of a Berman hearing are nonbinding. An appeal by either party will bring the parties to the superior court for de novo review, where litigation formalities may apply.
Because the complexity of One Toyota's arbitral process effectively requires that employees hire counsel, there is also force to Kho's argument that the procedure is not an affordable option. An arbitration procedure may not impose such costs or risks on wage claimants that it " 'effectively blocks every forum for the redress of disputes, including arbitration itself.' " ( Sonic II , supra , 57 Cal.4th at p. 1148,
As noted, Armendariz , supra ,
Although section 218.5 may mitigate some financial burden, employees still face a risk that they will not be designated the prevailing party, rendering their fees unrecoverable. The prevailing party is the one that succeeds "on a ' "practical level" ' " and has " 'realized its litigation objectives.' " ( Sharif v. Mehusa, Inc. (2015)
*136In contrast, the Berman statutes provide fee-shifting to wage claimants who secure any monetary recovery in an employer's appeal. ( § 98.2, subd. (c).) Considering the simplified administrative procedures that can be navigated in propria persona, and the availability of the Labor Commissioner's representation and favorable fee-shifting in a de novo appeal, claimants can successfully complete the Berman process without paying a cent to an attorney. The calculus is significantly different for employees in the arbitration process here, despite section 218.5. Assuming they can find counsel willing to represent them in One Toyota's complex arbitral process, these employees will have to pay the attorney if they do not prevail and may have to pay their employer's attorney fees upon a finding of bad faith. (See § 218.5, subd. (a).) Moreover, since section 218.5, subdivision (a) requires a fee request "upon the initiation of the action," employees who hire counsel after filing suit or starting arbitration may unwittingly forfeit their right to fees by failing to make a timely request.
Because the arbitration process here is no more complicated than ordinary civil litigation, it might be sufficiently accessible for wage claimants who are sophisticated, or affordable for those able to hire counsel.
*735But an unconscionability analysis must be sensitive to context. Context includes both the commercial setting and purpose of the arbitration contract and any procedural unconscionability in its formation. ( Sanchez , supra , 61 Cal.4th at pp. 911-912,
**698Ultimately, the question is whether Kho, through oppression and surprise, was coerced or misled into making an unfair bargain. (See Gentry , supra , 42 Cal.4th at pp. 469-470,
3. Consistency with Federal Law
Our holding rests on generally applicable unconscionability principles and heeds Concepcion 's counsel that arbitration agreements be placed "on an equal footing with other contracts." ( Concepcion , supra , 563 U.S. at p. 339,
The dissent's primary objection is that our analysis evinces hostility to arbitration, discriminates against arbitration, or improperly prefers a nonarbitral forum. (Dis. opn., post , 251 Cal.Rptr.3d at pp. 762-763, 447 P.3d at pp. 720-722.) Yet arbitration is premised on the parties' mutual consent, not coercion (see Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp. , supra , 559 U.S. at p. 681,
In comparing Berman's administrative process with One Toyota's arbitral procedure, we have simply evaluated the bargain at issue. We have not said no arbitration could provide an appropriate forum for resolution of Kho's wage claim, but only that this particular arbitral process, forced upon Kho *138under especially oppressive circumstances and erecting new barriers to the vindication of his rights, is unconscionable.
Citing the protracted appellate proceedings here, the dissent also complains that evaluating unconscionability claims will erect the type of "preliminary litigating hurdle" to arbitration the high court disfavored in **699American Express Co. v. Italian Colors Restaurant (2013)
"Under the dissent's sweeping view of FAA preemption, no unconscionability rule may take into account the surrender of statutory protections for certain claimants, whether or not those protections interfere with fundamental attributes of arbitration." ( Sonic II , supra , 57 Cal.4th at p. 1168,
C. Status of the Labor Commissioner's Award
As noted, the trial court granted One Toyota's motion to vacate the Labor Commissioner's award. Because the Court of Appeal concluded the parties *139must arbitrate their wage dispute, it did not address the Labor Commissioner's cross-appeal from the order vacating her award. We consider the issue because the status of the Labor Commissioner's award has continuing significance on remand.
As One Toyota acknowledges, the issuance of such an award has several consequences even if not reduced to an enforceable judgment. When, as here, a de novo appeal is taken, the employer must post bond in the amount of the award. ( § 98.2, subd. (b).) Employees like Kho who do not contest any aspect of the award can be represented by the Labor Commissioner in the de novo proceedings (§ 98.4) and obtain attorney fees if they recover any amount. ( § 98.2, subd. (c) ; see Lolley , supra , 28 Cal.4th at p. 377,
On the morning of the scheduled Berman hearing, One Toyota faxed the Labor Commissioner a letter. The company explained it had filed a petition to compel arbitration and requested the hearing be taken off calendar until arbitration was complete. The Labor Commissioner refused, proceeded with the hearing in One Toyota's absence, and made an award for Kho.
The court purportedly relied on Code of Civil Procedure section 1094.5, subdivision (b). That statute authorizes a writ of mandate if an administrative tribunal "has proceeded without, or in excess of, jurisdiction; whether there was a fair trial; and whether there was any prejudicial abuse of discretion." ( Code Civ. Proc., § 1094.5, subd. (b).) The difficulty is One Toyota did not petition for a writ of mandate. (See Code Civ. Proc., § 1094.5, subd. (a).) It simply filed a motion to vacate the award. Moreover, administrative mandate applies only to the results of "a proceeding in which by law a hearing is required to be given ...." (Ibid ., italics added; see *140Keeler v. Superior Court (1956)
More fundamentally, One Toyota was not entitled to relief on its motion because it failed to exhaust its administrative remedies. The Labor Code outlines two alternatives for challenging a Berman award. (See Gonzalez v. Beck (2007)
If One Toyota wished to halt the Berman proceedings while pursuing arbitration, it could have requested a stay. The filing of a petition to compel arbitration does not automatically stay ongoing proceedings; the party seeking arbitration must request one. ( Brock v. Kaiser Foundation Hospitals (1992)
One Toyota did not obtain a stay, but simply refused to participate in a hearing that had been set months before. Under these circumstances, the Labor Commissioner did not act improperly in proceeding with the hearing after One Toyota and its counsel chose to depart. Vacating that award was error. Nevertheless, One Toyota properly appealed the award under section 98.2, which forestalled the Labor Commissioner's decision, terminated her jurisdiction, and vested jurisdiction in the superior court. ( Murphy v. Kenneth Cole Productions, Inc. , supra , 40 Cal.4th at p. 1116,
III. DISPOSITION
The decision of the Court of Appeal is reversed. The matter is remanded for return to the trial court for proceedings on One Toyota's de novo appeal from the Labor Commissioner's award.
We Concur:
CANTIL-SAKAUYE, C. J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
Dissenting Opinion by Justice Chin
Today, the majority holds that an arbitration agreement is substantively unconscionable - and therefore unenforceable - precisely because it prescribes procedures that, according to the majority, have been "carefully crafted to ensure fairness to both sides." (Maj. opn., *142ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695.) If you find that conclusion hard to grasp and counterintuitive, so do I. It is based on the majority's view that arbitration with such procedures, though not unaffordable or inaccessible in the abstract or "per se unfair" (maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695), is not as advantageous for employees with unpaid wage claims as the potentially multitiered, multistep, combined administrative and judicial statutory process known as the Berman procedure. I believe the majority's analysis and conclusion to be incorrect under state law in numerous respects. I also believe the Federal Arbitration Act (FAA;
DISCUSSION
To explain why I do not join the majority, I begin by summarizing relevant state law unconscionability principles. I then explain *740my disagreement with the majority's view that "a relatively low degree of substantive" unfairness may be sufficient to render an arbitration agreement unenforceable on the grounds of unconscionability (maj. opn., ante , 251 Cal.Rptr.3d at p. 729, 447 P.3d at p. 693), and with the majority's analysis of procedural and substantive unconscionability. Finally, I explain why I believe the majority's analysis and conclusion are inconsistent with, and therefore preempted by, the FAA, as the United States Supreme Court has construed that law.
A. State Law Principles of Arbitration and Unconscionability.
Several state law legal principles must guide our analysis. First, as the majority acknowledges, "California law strongly favors arbitration." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 725, 447 P.3d at p. 689.) The clearest expression of this state policy appears in Code of Civil Procedure section 1281, which declares that "[a] written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract." This section establishes the "fundamental policy" of California's arbitration scheme: "that arbitration agreements will be enforced in accordance with their terms ." ( Vandenberg v. Superior Court (1999)
Second, although the doctrine of unconscionability, as a generally applicable contract defense, may be applied to invalidate an arbitration agreement, as the majority notes, the doctrine's "application" in the arbitration context "must rely on the same principles that govern all contracts," and "[t]he degree of unfairness required for unconscionability must be as rigorous and demanding for arbitration clauses as for any other contract clause." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 725, 447 P.3d at p. 689.)
Third, under our generally applicable principles of unconscionability, "[a] party cannot avoid a contractual obligation merely by complaining that the deal, in retrospect, was unfair or a bad bargain" ( Sanchez v. Valencia Holding Co. , LLC (2015)
Fourth, "contracts of adhesion ... are indispensable facts of modern life" and "are generally enforced" even though they "contain a degree of procedural unconscionability." ( **703Gentry v. Superior Court (2007)
Fifth, the party seeking to avoid the contract must establish both procedural and substantive unconscionability, "the former focusing on ' "oppression" ' or *144' "surprise" ' due to unequal bargaining power, the latter on ' "overly harsh" ' or ' "one-sided" ' results." ( Armendariz v. Foundation Health Psychcare Services , Inc. (2000)
B. The Majority's Sliding Scale.
At this point, I note my first concern about the majority's analysis: its assertion that "a relatively low degree of substantive unconscionability may suffice to render" an arbitration agreement "unenforceable" if the level of procedural unconscionability is "substantial." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 729, 447 P.3d at p. 693.) To begin with, it is unclear what the majority means by "relatively low" (ibid. ), and the majority sheds no light on this question. The majority's unadorned and unexplained assertion inevitably poses - but does not answer - the following questions: Low "relative[ ]" to what, and how "low" is enough?
Nor do our precedents support or give meaning to the majority's statement. The only decision from this court the majority cites for its assertion is Armendariz . (Maj. opn., ante , 251 Cal.Rptr.3d at pp. 729-730, 447 P.3d at p. 693.) However, the majority notably precedes this citation with a "see" signal, which is the signal we use to introduce decisions that provide only "weaker support" for a given proposition, i.e., decisions that, as here relevant, "only indirectly support the text" or contain "supporting dicta." (Cal. Style Manual (4th ed. 2000) § 1:4, p. 9.) Clearly, then, the majority itself does not believe that Armendariz provides more than indirect and weak support for its view.
To the extent Armendariz bears on the issue, it states, as noted above, that the " 'sliding scale' " used in connection with procedural and substantive unconscionability " 'disregards the regularity of the procedural process of the contract formation ... in proportion to the greater harshness or unreasonableness of the substantive terms themselves.' [Citations.] In other *742words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa." ( Armendariz , supra , 24 Cal.4th at p. 114,
Indeed, the very concept of "a relatively low degree of substantive unconscionability" (maj. opn., ante , 251 Cal.Rptr.3d at p. 729, 447 P.3d at p. 693) is inconsistent with our prior pronouncements that a court may not invalidate "one-sided contract provisions" upon a mere showing that "the deal, in retrospect, was unfair or a bad bargain" ( Sanchez , supra , 61 Cal.4th at p. 911,
For its assertion, the majority more directly relies on two Court of Appeal decisions (maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at pp. 693-694), but neither is persuasive. In the first - Carmona v. Lincoln Millennium Car Wash , Inc. (2014)
In the second decision the majority cites - A & M Produce Co. v. FMC Corp. (1982)
This is an important issue, because the majority's new rule will significantly impact the enforceability of virtually all mandatory, predispute arbitration agreements in the employment context. This court has observed that "the economic pressure" employers exert "on all but the most sought-after employees" to sign such mandatory arbitration contracts "may be particularly acute," because the contract "stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement." ( **705Armendariz , supra , 24 Cal.4th at p. 115,
For this reason, the majority's assurance that an identical arbitration provision "might pass muster under less coercive circumstances" (maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 697) rings hollow. Because of the economic pressures faced by *147prospective and existing employees, the majority's finding of unconscionability will surely be the rule in the vast majority of cases in the employment context, regardless of the other circumstances the majority cites. In other words, with few exceptions, as to employees presented with a "sign or you're unemployed" choice, the ability to read, reflect, and understand the agreement does not make the situation *744"less coercive" in any meaningful sense. (Maj. opn., ante , 251 Cal.Rptr.3d at pp. 733-734, 447 P.3d at p. 696.) More broadly, because it would not be difficult for a court to find a "relatively low degree of substantive" unfairness in an adhesion contract (maj. opn., ante , 251 Cal.Rptr.3d at p. 729, 447 P.3d at p. 693), the majority's new rule casts significant doubt on the enforceability of many contractual terms in the employment context, not just arbitration provisions.
C. Procedural Unconscionability.
I now turn to my next point of disagreement with the majority: its analysis of procedural unconscionability. Several aspects of that analysis are inconsistent with both established California law and the record in this case.
First, in finding "significant oppression" (maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691), the majority emphasizes that Kho "had no opportunity to read" the documents his employer - plaintiff One Toyota of Oakland (OTO) - asked him to sign (maj. opn., ante , 251 Cal.Rptr.3d at pp. 719-720, 447 P.3d at pp. 684-685), and that OTO, by having an employee from its human resources department "wait for the documents, ... conveyed an expectation that Kho sign them immediately, without examination or consultation with counsel" (maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691). However, in Sanchez , our procedural unconscionability discussion gave no weight to sworn statements of the party resisting arbitration that he " 'was presented with a stack of documents,' " " 'was simply told ... where to sign and/or initial each one,' " and " 'was not given an opportunity to read any of [them].' " ( Sanchez , supra , 61 Cal.4th at p. 909,
Second, I disagree with the majority insofar as it emphasizes that "[n]either [the] contents nor significance" of the arbitration agreement "was explained" to Kho, that "there is no indication" in the record the employee who presented the agreement "had the knowledge or authority to *745explain its terms," and that OTO, by "select[ing] a low-level employee ... to present the [a]greement, creat[ed] the impression that no request for an explanation was expected and any such request would be unavailing." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691.) The majority's reliance on the absence of evidence regarding the employee's ability and authority to explain the agreement's terms is inconsistent with the fact that Kho bears "[t]he burden of proving unconscionability." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 726, 447 P.3d at p. 690.) More broadly, the majority's consideration of these circumstances is inconsistent with Sanchez and with the FAA. In Sanchez , regarding procedural unconscionability, we stated that the party seeking to enforce an arbitration agreement "was under no obligation to highlight the arbitration clause of its contract" and was not "required to specifically call that clause to [the other party's] attention." ( Sanchez , supra , 61 Cal.4th at p. 914,
Third, I disagree that the "degree of procedural unconscionability" here was "unusually" or " 'extraordinarily high' " (maj. opn., ante , 251 Cal.Rptr.3d at pp. 719, 726, 447 P.3d at pp. 685, 690) because "Kho was required to sign the agreement to keep the job he had held for three years" and OTO's conduct "conveyed the impression that negotiation efforts would be futile" (maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 728, 447 P.3d at pp. 691, 692). These circumstances are what make the contract adhesive in the first place; as the majority earlier explains, "[a]n adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power 'on a take-it-or-leave-it basis.' " (Maj. opn., ante , 251 Cal.Rptr.3d at p. 726, 447 P.3d at p. 690.) They are also characteristics of all "mandatory employment arbitration agreements," which this court has defined as "arbitration agreements that are conditions of new or continuing employment." ( Sonic II , supra , 57 Cal.4th at p. 1130,
*149Regarding surprise, the majority begins its analysis by assailing the arbitration agreement as being "a paragon of prolixity." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691.) However, "prolixity" simply means the state or quality of being lengthy, protracted and drawn out, perhaps unduly or unnecessarily so. (12 Oxford English Dict. (2d ed.1989) p. 608; Webster's 3d New Internat. Dict. (2002) p. 1814; see Black's Law Dict. (10th ed. 2014) p. 1406, col. 1 ["prolixity" is "[t]he unnecessary and superfluous recitation of facts and legal arguments in pleading or evidence"].) It is doubtful that the arbitration agreement in this case, consisting of a "single" paragraph with "51 lines," meets this definition, let alone constitutes a "paragon" - i.e., a perfect example - of this concept. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691.)
**707In any event, contrary to what the majority suggests, our cases establish that prolixity itself is not problematic; for purposes of a procedural unconscionability analysis, surprise " ' "occurs ... where the allegedly unconscionable provision is hidden within a prolix printed form." ' " ( Pinnacle , supra , 55 Cal.4th at p. 247,
For the preceding reasons, I conclude that the arbitration provision here is not unusual and that its substance does not contribute to a finding that the "degree of procedural unconscionability" in this case was, as the majority asserts, "unusually" and " 'extraordinarily high.' " (Maj. opn., ante , 251 Cal.Rptr.3d at pp. 719, 726, 447 P.3d at pp. 685, 690.) Supporting this conclusion is the fact that in cases involving a virtually identical arbitration provision, we did not find an element of surprise that increased the degree of procedural unconscionability. ( Sonic II , supra , 57 Cal.4th at pp. 1125-1126,
The majority concludes its discussion of procedural unconscionability with a line of analysis that California courts have long and uniformly rejected. The majority suggests that the arbitration agreement here is unenforceable because: (1) arbitration " ' "is a matter of consent, not coercion" ' "; and (2) we cannot "infer[ ]" that Kho's "consent" to arbitrate was "voluntary," given that his execution of the arbitration agreement was "induced ... through 'sharp practices' and surprise" and he almost certainly did not know "he was giving up his Berman rights." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 729, 447 P.3d at p. 692.) However, almost 40 years ago, we held that contracts of adhesion are "fully enforceable according to [their] terms" absent certain circumstances ( Graham , supra , 28 Cal.3d at p. 819,
Consistent with our decisions, California's Courts of Appeal have expressly rejected the majority's lack-of-consent line of analysis. For example, in A & M Produce , supra , 135 Cal.App.3d at pp. 486-487,
D. Substantive Unconscionability.
The majority's analysis of substantive unconscionability is difficult to follow, largely due to its shifting approach to that issue. Initially, the majority seems to suggest that substantive unconscionability is irrelevant because there *152was "an unusually high degree of **709procedural unconscionability" here, and "an employee may not be coerced or misled into ... trad[ing]" the Berman process for "a litigation-like arbitration procedure," "[e]ven if" that procedure "may be an acceptable substitute for the Berman process in other circumstances." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 719, 447 P.3d at p. 685.) Later, however, the majority expressly acknowledges that "[b]oth procedural and substantive unconscionability must be shown for the [unconscionability] defense to be established" (maj. opn., ante , 251 Cal.Rptr.3d at p. 725, 447 P.3d at p. 690) and asserts that at least "a relatively low degree of substantive unconscionability" is required to void the agreement, notwithstanding "the substantial procedural unconscionability here" (maj. opn., ante , 251 Cal.Rptr.3d at p. 729, 447 P.3d at p. 693). At one point, the majority indicates that " 'the [substantive] unconscionability inquiry focuses on whether the arbitral scheme imposes costs and risks on a wage claimant that make the resolution of the wage dispute inaccessible and unaffordable,' thus effectively blocking every forum for redress including arbitration itself." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 724, 447 P.3d at p. 689.) At another point, the majority indicates that the question is whether the arbitral scheme "offer[s] employees an effective means to pursue claims for unpaid wages, and [does] not impose unfair costs or risks on them or erect other barriers to the vindication of their statutory rights." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 696.) At still another point, the majority states that the question is whether "the bargain" between the parties "was sufficiently one-sided as to render the agreement unenforceable" (maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698), i.e., "so unfairly one-sided that it should not be enforced" (maj. opn., ante , 251 Cal.Rptr.3d at p. 724, 447 P.3d at p. 688). Finally, shifting gears one last time, the majority declares in the final paragraph of its analysis that the substantively unconscionable "question" here "[u]ltimately" is whether the bargain was simply "unfair." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698.)
This court's most relevant decision on the issue - Sonic II - is quite specific as to the applicable standard. Under the majority opinion in that case, an agreement requiring arbitration of claims otherwise subject to the Berman procedure is not substantively unconscionable "so long as the arbitral scheme, however designed, provides employees with an accessible, affordable process for resolving wage disputes that does not 'effectively block[ ] every forum for the redress of [wage] disputes, including arbitration itself.' " ( *749Sonic II , supra , 57 Cal.4th at pp. 1157-1158,
Indeed, in several ways, the majority's analysis supports the conclusion that the arbitration agreement here does not meet the Sonic II test for substantive unconscionability. To begin with, the majority concedes that that the arbitration process here - which permits "discovery" (maj. opn., ante , 251 Cal.Rptr.3d at p. 720, 447 P.3d at p. 685) and calls for "the same pleading, evidence, and motion practice rules that govern civil litigation" (maj. opn., ante , 251 Cal.Rptr.3d at p. 731, fn. 14, 447 P.3d at p. 694, fn. 14) - is no more complicated than ordinary civil litigation ...." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 734, 447 P.3d at p. 697.) Thus, arbitration under the agreement cannot be any more unaffordable or inaccessible for Kho than "ordinary civil litigation" (ibid. ), a system that, according to the majority, has been "carefully crafted to ensure fairness to both sides" and is not "per se unfair" (maj. opn., **710ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695). The majority also concedes that under the arbitration agreement, Kho would be entitled to "reasonable attorney fees and costs" were he to be "the prevailing party in 'any action brought for the nonpayment of wages.' " (Maj. opn., ante , 251 Cal.Rptr.3d at p. 749, 447 P.3d at p. 697.) This aspect of the agreement, the majority observes, "may mitigate some financial burden" of the arbitration. (Ibid. )
The majority also recognizes that in Little , we held in the arbitration context that use of "litigation-like procedures" does "not necessarily ... make" a mandatory employment arbitration agreement "unconscionable." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695, italics added.) Notably, in reaching this conclusion, we rejected the claim that "such procedures detract from the inherent informality of arbitration" and necessarily "inordinately benefit [employers] rather than [employees]." ( Little , supra , 29 Cal.4th at p. 1075, fn. 1,
Inexplicably discarding Sonic II 's test for substantive unconscionability, the majority bases it conclusion on the alternative substantive unconscionability tests it sets forth. According to the majority, because "Kho surrendered the full panoply of Berman procedures and assistance," and "received" nothing "in return" but "access to a formal and highly structured arbitration process," his "bargain" with OTO was both "unfair" and "sufficiently one-sided as to render the [arbitration] agreement unenforceable." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698.)
*750I disagree with the majority's analysis and conclusion in several respects. Initially, as already explained, our precedents establish that for an agreement to be substantively unconscionable, it is not enough that it is merely "unfair"
*154or "one-sided." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698.) Rather, it must cause "a substantial degree of unfairness beyond 'a simple old-fashioned bad bargain .' " ( Sonic II , supra , 57 Cal.4th at p. 1160,
Next, to the extent an evaluation of the benefits Kho relinquished and received is necessary, the majority's analysis is improperly narrow. As the majority acknowledges, " 'the unconscionability inquiry requires a court to examine the totality of the agreement's substantive terms' " and to determine the fairness of the parties' " 'overall bargain.' " (Maj. opn., ante , 251 Cal.Rptr.3d at p. 724, 447 P.3d at pp. 688-689.) Consistent with this observation, under basic contract law, "new and different consideration" is not required for "every individual promise in a contract." ( Martin v. World Savings & Loan Assn. (2001)
Viewed from this perspective, Kho received several substantial benefits "in return" for agreeing to arbitration. (Maj. opn., ante , 251 Cal.Rptr.3d at pp. 733-734, 447 P.3d at p. 696.) First and foremost, he received the benefit of continued employment. Kho was an at-will employee and, according to the majority, "was required to sign the agreement to keep [his] job." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691.) Under our precedents, Kho's " 'continuing employment' " under such circumstances constitutes " 'consideration' " from OTO that " 'support[s]' " the arbitration agreement. ( Asmus v. Pacific Bell (2000)
In any event, even insofar as the agreement constitutes a Berman waiver, I disagree that Kho received nothing "in return" but "access to a formal and highly structured arbitration process." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698.) The Berman procedure is potentially a three-step process. First is the administrative hearing, assuming the Labor Commissioner, as a matter of discretion, accepts the matter and decides to hold a hearing. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 722, 447 P.3d at p. 687.) Step two is a trial de novo in superior court (maj. opn., ante , 251 Cal.Rptr.3d at pp. 722-723, 447 P.3d at p. 687), which either party may request without having even participated in the administrative procedure. ( Jones v. Basich (1986)
In signing the arbitration agreement, as to claims covered by the Berman statutes, Kho gained access to a procedure with no preliminary, nonbinding administrative process; no potential for formal civil litigation in court ; only limited judicial review; and some , but not all, of the "litigation formalities"
*156that, as the majority concedes, may apply in a de novo proceeding under the Berman statutes. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695.) And he gained OTO's legal commitment and obligation to pay any **712and all costs "unique" to this procedure. ( Armendariz , supra , 24 Cal.4th at p. 113,
In an attempt to diminish the value of what Kho received and inflate the value of what he gave up, the majority asserts that the Berman procedures "discourage[ ]" de novo proceedings by requiring appealing employers to post undertakings and requiring unsuccessful appellants to pay the other side's costs and reasonable attorney fees. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695.) But the former requirement would seem to provide little disincentive, given that the employer's only alternative to filing an appeal and posting an undertaking is actually paying the award. And the latter provision also discourages employees from appealing, because it requires them to pay costs and attorney fees if they appeal and are "unsuccessful," meaning they do not obtain an "award[ ] ... greater than zero." ( Lab. Code, § 98.2, subd. (c).) Of course, the record here provides further reason to doubt the deterrent value of these provisions; after the administrative decision, OTO, which declined even to participate in the Berman hearing, filed for a de novo trial, completely undeterred by the statutes. In any event, having provisions that assertedly provide some undetermined and factually unproven disincentive to seeking a trial de novo is not at all the same as having access to an arbitration procedure that enables Kho to eliminate even the possibility that recovery of unpaid wages will require a formal civil trial in court - with attendant "litigation formalities" (maj. opn., ante , 251 Cal.Rptr.3d at p. 733, 447 P.3d at p. 696) - after a preliminary and nonbinding administrative procedure or as a matter of first resort in lieu of that procedure. As the majority explains, "[i]t is the opportunity to expedite and simplify the process that can motivate informed parties to agree to arbitration."
*157The majority's view that Kho received little or nothing "in return" (maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698) for the Berman waiver rests on numerous other exaggerations, unproven or erroneous assumptions, miscalculations, *753and/or mischaracterizations regarding the value of the Berman procedures. First, as the majority acknowledges, when an employee files an administrative claim, "[t]here is no [statutory] requirement that a Berman hearing be held" (maj. opn., **713ante , 251 Cal.Rptr.3d at p. 737, 447 P.3d at p. 700) and the Labor Commissioner has "discretion to ... take 'no further action ... on the complaint' " (ibid ., quoting Lab. Code, § 98, subd. (a) ). Thus, when Kho signed the arbitration agreement - which is the relevant time for assessing unconscionability ( Civ. Code, § 1670.5, subd. (a) ) - it was entirely speculative whether any of the Berman procedure's asserted benefits would be available to him, and the only thing he actually relinquished was the opportunity to ask the Labor Commissioner to exercise discretion to conduct legally nonbinding administrative proceedings on a claim.
Second, the majority's view that the Berman administrative procedure is more advantageous for employees because it has "no discovery process" (maj. opn., ante , 251 Cal.Rptr.3d at p. 722, 447 P.3d at p. 687) is inconsistent with our case law. In Armendariz , supra ,
Third, the Berman procedure is not , as the majority asserts, necessarily " 'speedy' " or "expedient." (Maj. opn., ante , 251 Cal.Rptr.3d at pp. 731, 731-732, 447 P.3d at pp. 694, 694-695.) As explained above, a Berman procedure is potentially a three-step , combined administrative and judicial process, which may include a civil trial in court with "litigation formalities." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 733, 447 P.3d at p. 696.) This three-step process *158has the potential to substantially delay any recovery. Indeed, the first administrative step by itself can take years. ( Sonic I , supra , 51 Cal.4th at p. 681, fn. 5,
Indeed, in light of the facts of this case and the Sonic II majority's discussion of this **714issue, the majority's steadfast reliance here on the asserted speediness of the Berman procedure is as ironic as it is legally erroneous. In Sonic II , I argued that the potentially three-step Berman procedure is not necessarily "speedier or more streamlined than arbitration." ( Sonic II , supra , 57 Cal.4th at p. 1181,
Fourth, the Berman procedure is not as " 'informal' " as the majority suggests. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 722, 447 P.3d at p. 687.) The Labor Commissioner's published policies and procedures stress that Berman hearings "are formal procedures" at which each party has the right to be represented by counsel, to present evidence, to testify under oath, to have other witnesses testify under oath, to cross-examine the opposing party and witnesses, and to subpoena witnesses, documents and records. (Dept. of Industrial Relations, Div. of Labor Stds. Enforcement *755(DLSE), Policies and Procedures for Wage Claim Processing (2012 rev.) pp. 2-4 (DLSE Policies).) Moreover, the judicial trial de novo procedure to which either side is entitled after a Berman hearing is ordinary civil litigation, including both trial in the superior court and appeal. At both judicial levels, as the majority acknowledges, "litigation formalities may apply." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 733, 447 P.3d at p. 696.) Thus, all of the features of the arbitration agreement that are problematic for the majority - a superior court judge, discovery, and rules of pleading, evidence and motion practice - are actually built into the Berman procedure, and then some.
The majority emphasizes that the deputy labor commissioner who conducts the Berman hearing "can explain terminology and assist with witness examination." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 731, 447 P.3d at p. 694.) But nothing requires the hearing officer to provide such help; the decision whether to do so is left to the hearing officer's "sole authority and discretion." (DLSE Policies, supra , at p. 3.) In any event, nothing in the arbitration agreement precludes the arbitrator from providing similar assistance, and the majority never asserts otherwise. (See Sonic II , supra , 57 Cal.4th at p. 1164,
Fifth, the majority's discussion of the relative ease of initiating arbitration and the Berman procedure is faulty in several respects. The arbitration *160agreement is problematic for the majority because it "does not explain how to initiate arbitration." ( **715Maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at p. 693.) However, the second agreement Kho signed when he executed the arbitration agreement informed him that he should "notify the Dealership's General Manager in writing" if he "dispute[d] the amount of wages paid to" him. This agreement informed Kho that all he had to do to initiate arbitration was to submit to OTO a written claim for unpaid wages. Moreover, the arbitration agreement itself expressly referenced and incorporated - by both name and specific statutory citation - the California Arbitration Act ( Code Civ. Proc., § 1280 et seq. ), which sets forth the petition procedure for initiating arbitration if "a party to the [arbitration] agreement refuses to arbitrate" a controversy. ( Code Civ. Proc., § 1281.2.) Notably, although we dealt with similar arbitration agreements in Sonic I , Sonic II , and Little , in none of those decisions did we even mention their failure to explain how to initiate arbitration.
On the other side of its "initiation" equation, the majority, in relying on two wage orders of the Industrial Welfare Commission (IWC) (maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at pp. 693-694), is truly grasping at straws. To begin with, the majority does not suggest, and nothing in the record indicates, that these wage orders were ever handed to Kho, in his possession, or called to his attention in any way. Indeed, Kho could not have seen one of the wage orders, because it post-dated his employment with OTO by almost five years. (IWC Wage Order No. MW-2019.) The other order states, contrary to the majority's assertion, that posting is unnecessary "[w]here the location of work or other conditions make [posting] impractical," in which case the employer need only "keep a copy of th[e] order and make it available to every employee upon request." (IWC Wage Order No. 4-2001, § 22.)
*756Again, the majority does not suggest, and nothing in the record indicates, that the wage order was actually posted at Kho's worksite.
Even had the wage order that actually existed when Kho worked at OTO been posted, nothing suggests Kho ever saw it, let alone read it. And even had he read it, he surely would not have understood it if, as the majority asserts, "[i]t would have been nearly impossible" for him "to understand" the arbitration agreement's meaning given his lack of "legal training and access to" the statutes it references. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 728, 447 P.3d at p. 692.) To the extent, if any, the text of the single paragraph arbitration agreement is, as the majority asserts, " 'visually impenetrable' " (maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691), the text of the wage order - comprising 10 pages of densely packed, single-spaced type with 22 sections, multiple subsections, and multiple subparts to the multiple subsections - is far more visually impenetrable. And to the extent, if any, the arbitration agreement's "substance" is, as the majority asserts "opaque" (maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691), again, the wage order's substance is far more opaque. The wage order contains more "statutory references and legal jargon" than the arbitration agreement, and its "legal jargon" is much more complicated than *161the arbitration agreement's. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691.) To borrow the words of the majority, "a layperson trying to navigate" the wage order "text would not have an easy journey." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 728, 447 P.3d at p. 692.) Indeed, assuming the wage order applied to Kho - something the majority does not actually assert - it would have been hard for him to have understood this fact even had he read it; in complexly structured, multipart sections containing highly technical "legal jargon" and many "statutory references" (maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691), the first three pages of the wage order set forth 21 definitions and numerous coverage exemptions (Wage Order No. 4-2001, §§ 1, 2 ).
As for informing Kho about the Berman procedure, the wage order contains not a single mention of that procedure as a means for resolving wage disputes, either by name or by statutory reference. Nor, contrary to the majority's suggestion, does the sentence on which the majority relies even expressly refer to "wage-related violations." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at p. 693.)
**716It refers instead only generally to "QUESTIONS ABOUT ENFORCEMENT of the Industrial Welfare Commission orders and reports of violations." (Wage Order No. 4-2001, p. 9.) For Kho to have known that this sentence related to "wage-related violations" (maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at p. 693), he would have needed to understand that the acts he wanted to challenge were addressed by the wage order and constituted violations of its complicated, legally technical provisions. Finally, the sentence in question appears at the end of the 10-page wage order, after the last of its 22 sections. (Wage Order No. 4-2001, p. 9.) Thus, Kho would not have even come across it unless he first made his way all the way through the rest of the long, complex, legally technical wage order. In other words, this sentence, unlike the arbitration provision, truly is " ' "hidden within a prolix printed form." ' " ( Pinnacle , supra , 55 Cal.4th at p. 247,
The other wage order - which, again, did not exist during Kho's employment with OTO - is, in addition, similarly problematic. Though shorter, it comprises five sections of densely-packed, single-spaced, small font type; written in very technical legal jargon; containing both statutory references *757and references to other wage orders; setting forth exceptions to its application; and including complicated charts. (Wage Order No. MW-2019.) It makes no mention of the Berman procedure, either by name or by statutory reference, and contains no express reference to "wage-related violations." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at p. 693.) Instead, at the bottom, in tiny type, its states that "Questions about enforcement should be directed to the Labor Commissioner's Office." (Wage Order No. MW-2019.)
In short, the wage orders that, according to the majority, demonstrate the Berman procedure's superiority in terms of initiating action, demonstrate just the opposite. To the extent, if any, the arbitration agreement is problematic in *162the ways the majority asserts, the wage orders are more problematic in each of those ways. And they are problematic in additional ways that the majority does not even assert characterize the arbitration agreement.
In addition, the majority's assertion about only needing to "fill[ ] out a simple form" to initiate the Berman procedure (maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at p. 693) is inaccurate. Upon examination, the form to which the majority refers turns out not to be so "simple" at all. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 730, 447 P.3d at p. 693.) It requires an employee to know and provide a considerable amount of detailed information, including: whether the claim is "about a public works project"; whether there is "a union contract covering [the] employment," in which case a copy should be attached; the "total number of [the employer's] employees"; and a complete breakdown of the unpaid amounts into "regular wages," "overtime wages," "meal period wages," "rest period wages," "split shift premium," "reporting time pay," "commissions," "vacation wages," "business expenses," "unlawful deductions," and "other." (DLSE, Initial Report of Claim (DLSE Form 1) (rev. July 2012).) This is far more information than is necessary to file a civil complaint. Indeed, unlike the majority, the DLSE recognizes that the claim initiation form is not so simple; with it, the DLSE offers two pages of densely-packed "Instructions for Filing A Wage Claim" and, attached to the instructions, a densely-packed, three-page "Guide to Completing 'Initial Report or Claim' Form (DLSE Form 1)."
Moreover, initiating the Berman procedure may actually require more than filling out that single form. Additional forms must be filled out and submitted "if the claim involves "commission pay" or "vacation wages," or "if the plaintiff's work hours or days of work varied per week or were irregular and the plaintiff is seeking unpaid wages or premium pay for meal or rest period violations." (DLSE Policies, supra , at p. 1.) Employees are also directed to submit a variety of other supporting documents - time records, paychecks and paystubs, bounced checks, notice of employment information - if they have them. (Ibid. ) Given the above, the majority has exaggerated the ease of initiating the Berman procedure.
Sixth, the majority's discussion of how "[c]ollection ... in the Berman context" is "simplified" compared to arbitration (maj. opn., ante , 251 Cal.Rptr.3d at p. 731, 447 P.3d at pp. 694-695) ignores aspects of arbitration **717that undermine its view. The majority emphasizes that where "the employer unsuccessfully appeals the Labor Commissioner's award, the claimant can collect on a posted bond." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 731, 447 P.3d at p. 695.) However, an employee who arbitrates a controversy may obtain provisional remedies - such as an attachment or a *758preliminary injunction requiring payment of wages during the arbitration - in connection with the controversy. ( Code Civ. Proc., § 1281.8.) No comparable provision enables an employee actually to obtain any payment during the Berman procedure . *163Seventh, the majority's discussion of the relative costs of arbitration and the Berman procedure is misleading and incomplete. According to the majority, by agreeing to arbitrate a wage claim, an employee gives up a "largely cost-free administrative procedure." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695.) But an employee who requests a subpoena for documents, records or witnesses - as Kho did in this case - is responsible for the "[c]osts incurred in the service of a subpoena, witness fees and mileage." (DLSE Policies, supra , at p. 3.) And employees who file de novo appeals from awards by the Labor Commissioner must pay (1) a court filing fee ( Lab. Code, § 98.2, subd. (a) ) and (2) the employer's "costs and reasonable attorney's fees" if they fail to recover "an amount greater than zero" (id. , subd. (c)). In any event, as the majority correctly notes, the arbitration agreement "anticipates" that, consistent with Armendariz , OTO has the "obligation to pay arbitration-related costs." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 728, 447 P.3d at p. 692.) Thus, if there are any costs "unique to arbitration" under the agreement - such as costs incident to discovery, preparation of proper pleadings, and/or motion practice - then OTO must pay them. ( Armendariz , supra , 24 Cal.4th at p. 113,
So it turns out that the majority's only real concern about costs relates to "[a]ttorney fees," which, says the majority, are "different" from other costs "because they are not unique to arbitration." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 733, 447 P.3d at p. 696.) According to the majority, "employees can secure free legal assistance from the Labor Commissioner, both at the Berman hearing and in any subsequent appeal." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 733, 447 P.3d at p. 696.) By contrast, in the arbitration, they must "pay for [legal] representation." (Ibid. )
The majority's analysis is problematic for several reasons. First, to be clear, according to the majority, the commissioner may not provide an employee with "representation" by "a lawyer" at a Berman hearing (maj. opn., ante , 251 Cal.Rptr.3d at p. 733, 447 P.3d at p. 696), because "no statute authorizes" such representation (maj. opn., ante , 251 Cal.Rptr.3d at p. 734, fn. 19, 447 P.3d at p. 696-697, fn. 19). Instead, in terms of providing "free legal assistance" (maj. opn., ante , 251 Cal.Rptr.3d at pp. 732-733, 447 P.3d at pp. 695-696) at the Berman hearing, the commissioner only may "assist ... with cross-examination and explain issues and terms involved" (maj. opn., ante , 251 Cal.Rptr.3d at p. 722, 447 P.3d at p. 687). Second, as noted above, nothing in the arbitration agreement precludes the arbitrator from providing similar assistance, and the majority never asserts otherwise. Third, even as to de novo appeals, not all employees are eligible for legal representation by the commissioner, and even fewer are absolutely entitled to such representation. Employees who are "financially [ ]able to afford counsel" are not eligible for representation by the commissioner. ( Lab. Code, § 98.4.) If they are "financially unable to afford counsel," but are "objecting to any part of the Labor Commissioner's final order," they are eligible for representation, *759but the *164commissioner has discretion not to provide it. (Ibid. ) Thus, employees requesting a trial de novo are never guaranteed representation by the commissioner, because they are, by definition, objecting to part of the final order; representation of such employees is always a matter for the commissioner's discretion. Only those employees who are both "financially unable to afford counsel" and "not objecting to any **718part of the Labor Commissioner's final order" are statutorily guaranteed representation by the commissioner. (Ibid. )
Fourth, the majority gives short shrift to OTO's claim that "the Labor Commissioner could represent claimants in arbitration." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 734, fn. 19, 447 P.3d at p. 696, fn. 19.) The majority states that "no statute authorizes the representation of [wage] claimants outside th[e] specific context" of de novo proceedings following a Berman hearing. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 734, fn. 19, 447 P.3d at p. 697, fn. 19.) However, Labor Code section 98.3, subdivision (a), states that "[t]he Labor Commissioner may prosecute all actions for the collection of wages, penalties, and demands of persons who in the judgment of the Labor Commissioner are financially unable to employ counsel and the Labor Commissioner believes have claims which are valid and enforceable." The majority asserts that this statute only gives the commissioner "the power to prosecute its own action ... on behalf of workers" (maj. opn., ante , 251 Cal.Rptr.3d at p. 734, fn. 19, 447 P.3d at p. 697, fn. 19), but the statutory language on its face does not seem so confined, and the majority offers no analysis for its restrictive reading. Moreover, Labor Code section 98.3, subdivision (b), states that "[t]he Labor Commissioner may prosecute action for the collection of wages and other moneys payable to employees or to the state arising out of an employment relationship or order of the Industrial Welfare Commission." These provisions, and OTO's argument, merit more in depth and definitive consideration if, as the majority reasons, the asserted unavailability of free counsel in arbitration is the primary reason the arbitration agreement is substantively unconscionable.
Finally, the majority's comparison of the employee's ability to recover attorney fees in arbitration and in a Berman procedure is misleading. As noted above, the parties agree - and the majority does not dispute - that were Kho to hire counsel to assist in an arbitration and were he to prevail, as "to most of [his] claims," he would be entitled to "reasonable attorney fees and costs" under Labor Code section 218.5. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 734, 447 P.3d at p. 697.) Nevertheless, the majority continues, he "face[s] a risk that [he] will not be designated the prevailing party" under the fee statute. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 734, 447 P.3d at p. 697.) By contrast, the majority asserts, "The Berman statutes provide fee-shifting to wage claimants who secure any monetary recovery in an employer's appeal." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 734, 447 P.3d at p. 697.) Of course, this means that claimants who recover nothing in an employer's appeal are not entitled to recover attorney fees. And the majority's use of the limiting phrase "in an employer's appeal" (ibid. ) means that in an appeal by the employee , the employee may not recover *165attorney fees under any circumstances, even upon securing full monetary recovery . ( Sonic I , supra , 51 Cal.4th at p. 673,
The majority offers little response to my detailed analysis, other than to say I am simply "rais[ing] the same criticisms of the Berman procedure that [the majority] considered at length, and rejected" in Sonic II . (Maj. opn., ante , 251 Cal.Rptr.3d at p. 731, fn. 15, 447 P.3d at p. 695, fn. 15.) Although some of the points I make here about the Berman procedure are the same as points I made in Sonic II , many are not . The majority simply ignores the points that are new. It also ignores the evidence I cite to refute its assessment of the Berman procedure, which is based solely on this court's assertions about what that procedure was, in theory " 'designed to provide.' " (Maj. opn., ante , 251 Cal.Rptr.3d at p. 722, 447 P.3d at p. 687.)
Moreover, contrary to the majority's assertion, I am not making "criticisms" of the Berman procedure. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 731, fn. 15, 447 P.3d at p. 695, fn. 15.) I am simply pointing out relevant **719aspects of the Berman procedure that are inherent in the statutory provisions themselves or that have revealed themselves through actual administration of those provisions. This level of detailed inquiry is necessary because of the basis for the majority's unconscionability finding: its assessment of the Berman procedure's benefits relative to those of the arbitration procedure. A proper evaluation of that finding requires close examination of the majority's assumptions and of any real, substantive differences between the two procedures. The court should not cavalierly invalidate this arbitration agreement based on erroneous assumptions or assertions about its procedures as compared to the Berman procedure. In light of the above considerations, it is impossible to reach a reliable, accurate, or definitive conclusion that the Berman procedure is less costly than the arbitration procedure. Given the uncertainties regarding such a comparison, the majority's analysis provides an insufficient basis for concluding that Kho has carried his burden to prove that the agreement was "unconscionable at the time it was made." ( Civ. Code, § 1670.5, subd. (a).)
Of course, reasonable people may reach different conclusions about the inchoate value, at the time the arbitration agreement was signed, of a Berman procedure's potential benefits in comparison to the inchoate value of the arbitration procedure's potential benefits. But a court's after-the-fact, subjective assessment of the relative benefits of the two procedures should not be *166the basis for exercising the judicial power to declare that an agreement was "unconscionable at the time it was made" ( Civ. Code, § 1670.5, subd. (a) ), and thus unenforceable. This should be especially true where, as here, the basis for the court's conclusion is that the arbitration procedure is simply too much like a procedure - ordinary civil litigation - that, according to the majority, has been "carefully crafted to ensure fairness to both sides." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695.)
Which brings me to my next point of disagreement with the majority: its view that our case law allows invalidation of this arbitration agreement based on the relative benefits of the arbitration procedure and the Berman procedure. To be sure, the majority in Sonic II , supra , 57 Cal.4th at page 1149,
*761However, the Sonic II majority also emphasized: that an "employee's surrender of such benefits does not necessarily make the agreement unconscionable" ( id. at p. 1125,
As noted earlier, the majority acknowledges that the features of the arbitration procedure here were "carefully crafted to ensure fairness to both sides" (maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695) and are not "per se unfair" (maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695), and the majority does not find that arbitration is so unaffordable or inaccessible for Kho as to effectively block every forum for redress. If the statements of the Sonic II majority have any meaning, then that should end the inquiry, and the *167arbitration agreement should be enforced. But the majority nevertheless invalidates the agreement because, in its view, the arbitration procedure is not as advantageous for Kho as the Berman procedure. In this regard, the majority's analysis and conclusion are inconsistent with the Sonic II majority's many statements and assurances regarding the enforceability of arbitration agreements in this context, especially its statement that a finding of substantive unconscionability may not be "premised on the [purported] superiority of the Berman hearing as a dispute resolution forum." ( Sonic II , supra , 57 Cal.4th at p. 1149,
The majority here essentially ignores the Sonic II majority's statements, proclaiming that "the question" here "[u]ltimately" is whether Kho "was coerced or misled into making an unfair bargain" that is too "one-sided" to be enforced. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698.) To be sure, the Sonic II majority stated that "courts may examine the terms of adhesive arbitration agreements to determine whether they are unreasonably one-sided." ( Sonic II , supra , 57 Cal.4th at p. 1145,
Finally, even were the majority correct that the agreement is one-sided with respect to claims covered by the Berman procedure - and as I have demonstrated, it is not - the majority's analysis is contrary to the Sonic II majority opinion's discussion of one-sidedness. Consistent with my earlier discussion of basic contract law, the Sonic II majority stated that whether a contract is "unreasonably one-sided" must be determined based on "the overall bargain." ( Sonic II , supra , 57 Cal.4th at p. 1146,
For all of the preceding reasons, the majority's analysis and conclusion are incorrect as a matter of state law.
E. Federal Law - The FAA
The final reason I do not join the majority opinion is that its analysis is inconsistent **721with - and thus preempted by - the FAA, as the high court has construed that law.
The high court cases applying the FAA authoritatively establish at least two principles that are fatal to the majority's analysis and conclusion. First, an arbitration agreement's enforceability may not "turn[ ] on" a state's "judgment concerning the forum for enforcement of [a] state-law cause of action." ( Buckeye Check Cashing , Inc. v. Cardegna (2006)
The majority's analysis and conclusion violate both of these binding FAA principles. Again, the majority, though recognizing that the arbitration procedure here was "carefully crafted to ensure fairness to both sides" (maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695) and is not "per se unfair," unaffordable, or inaccessible (ibid. ), nevertheless invalidates the arbitration agreement based on its view that the procedure is not as advantageous for Kho and other employees as the Berman procedure. In other words, contrary to high court precedent, the majority makes the agreement's enforceability "turn[ ] [entirely] on" a state court's "judgment" that the Berman procedure provides a better "forum for enforcement of [a] state-law cause of action" ( Buckeye , supra , 546 U.S. at p. 446,
It is true that under the FAA, enforcement of an arbitration agreement is subject to "such grounds as exist at law or in equity for the revocation of any contract." (
However, the FAA imposes substantial limits on what a court may do in the name of unconscionability. To begin with, "[a] court may not ... construe [an arbitration] agreement in a manner different from that in which it otherwise construes nonarbitration agreements under state law." ( Perry v. Thomas (1987)
By refusing to enforce the arbitration agreement based on its view that the arbitration procedure is less advantageous for Kho and other employees than the Berman procedure, the majority runs afoul of these governing principles. Given the majority's recognition that the arbitration procedures have been "carefully crafted to ensure fairness to both sides" (maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695), and are not "per se unfair," unaffordable, or inaccessible (maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695), the majority's "comparative benefit" basis for invalidating the agreement constitutes nothing more than a " 'mere preference' " for the " 'procedures' " prescribed by the Berman statutes. ( Concepcion , supra , 563 U.S. at p. 343,
But the majority's effort is perhaps not as subtle or covert as it might at first appear. The high court, in discussing the " 'great variety' of 'devices and formulas' " that judges hostile to arbitration have used to invalidate arbitration agreements, has expressly "not[ed] that California's courts have been more likely to hold contracts to arbitrate unconscionable than other contracts." ( *765Concepcion , supra , 563 U.S. at p. 342,
Indeed, a majority of this court long ago expressly announced that with respect to arbitration agreements, it would apply "the ordinary principles of unconscionability ... in forms peculiar to the arbitration context." ( Armendariz , supra , 24 Cal.4th at p. 119,
Moreover, this case confirms my view, as set forth in Sonic II , that the unique unconscionability analysis a majority of this court applies to compulsory arbitration of Berman claims is incompatible with, and therefore preempted by, the FAA for another reason: it " ' "stand[s] as an obstacle to the accomplishment and execution of [Congress's] full purposes and objectives " ' in passing the FAA." ( Sonic II , supra , 57 Cal.4th at p. 1187,
In rejecting my view, the Sonic II majority confidently responded that its approach would "not erect a 'preliminary litigating hurdle' of the sort prohibited by Italian Colors ." ( Sonic II , supra , 57 Cal.4th at p. 1167,
**724disposition of unconscionability claims. ( Id. at p. 1157,
The facts and the majority's conclusion in this case validate my analysis. OTO moved to compel arbitration in August 2015. The trial court denied the motion four months later, in December 2015. OTO then appealed, and in August 2017 - two years after OTO moved to compel arbitration - the Court of Appeal disagreed with the trial court and ordered the motion granted. Now, after another two years of litigation , a majority of this court is reversing the Court of Appeal based on a different assessment of the arbitration procedure's benefits relative to a Berman procedure. Thus, as the majority acknowledges, the "[l]itigation" in this case just to apply Sonic II 's unique unconscionability test has "consumed ... four years ." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 730, fn. 12, 447 P.3d at pp. 693-694, fn. 12, italics added.) Even still, says the majority, its decision does not settle the question of whether an identical arbitration agreement would be enforceable "under less coercive circumstances." (Maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 697.) The length of this litigation and the majority's case-specific limitation on its holding confirm my view that the unconscionability analysis this court has prescribed for agreements to arbitrate claims the Berman procedure covers creates a preliminary litigating hurdle that, according to Italian Colors , is incompatible with, and thus preempted by, the FAA.
The majority's response - that this inordinate delay in arbitration is permissible under the FAA because unconscionability is a generally applicable contract defense that "has long been recognized as a permissible ground for invalidating arbitration agreements under the FAA's savings clause" (maj. opn., ante , 251 Cal.Rptr.3d at p. 736, 447 P.3d at p. 699) - is simply incorrect. Under high court precedent, the unconscionability defense does not "qualify for protection under the saving clause" if it is applied so as to "interfere[ ] with a fundamental attribute of *173arbitration." ( Epic , supra , --- U.S. ---- [138 S.Ct. at p. 1622].) Consistent with this precedent, we unanimously stated just two years ago that the FAA "preempts even a 'generally applicable' state law contract defense if that defense ... 'interferes with fundamental attributes of arbitration,' " including " ' "lower costs [and] greater efficiency and speed." ' " ( McGill , supra , 2 Cal.5th at p. 964,
The majority opinion here also confirms another aspect of my FAA preemption analysis in Sonic II . There, I explained that the Sonic II majority's unconscionability analysis is "inconsistent with" the FAA, as the high court construed it in Southland , *174because it "is not a ground that exists at law or in equity for the revocation of any contract, but is ... merely a ground that exists for the revocation of arbitration provisions in contracts subject to the Berman statutes or to other statutes that 'legislatively' afford to 'a particular class ... specific protections in order to mitigate the risks and costs of pursuing certain types of claims.' " ( Sonic II , supra , 57 Cal.4th at p. 1190,
Under the FAA, "[p]arties may generally shape [arbitration] agreements to their liking by specifying with whom they will arbitrate, the issues subject to arbitration, the rules by which they will arbitrate, and the arbitrators who will resolve their disputes. [Citation.] Whatever they settle on, the task for courts and arbitrators at bottom remains the same: 'to give effect to the intent of the parties.' " ( Lamps Plus , Inc. v. Varela , supra , --- U.S. ---- [139 S.Ct. at p. 1416].)
California law embodies a similar principle; as this court has explained, by enacting the California Arbitration Act, "the Legislature has determined that the parties shall have considerable leeway in structuring the dispute settlement arrangements by which they are bound ...." ( *768Graham , supra , 28 Cal.3d at p. 825,
The majority violates these federal and state law principles by invalidating the arbitration rules to which the parties in this case agreed - even though those rules have been "carefully crafted to ensure fairness to both sides" (maj. opn., ante , 251 Cal.Rptr.3d at p. 732, 447 P.3d at p. 695) and do not make arbitration "per se unfair," unaffordable, or inaccessible (ibid .) - because they are not, in the majority's view, as advantageous for Kho as the Berman procedure. This conclusion is both inconsistent with California law and preempted by the FAA.
For the foregoing reasons, I dissent.
All statutory references are to the Labor Code unless otherwise stated.
The auto dealership is licensed as OTO, L.L.C., apparently an acronym of One Toyota of Oakland.
According to the parties, this agreement is essentially the same as the one involved in the Sonic cases. Although impossible to verify without the Sonic record, the assertion may be at least partially true. Both employers are automotive dealerships and the contract appears to be a standardized form. However, the agreements cannot be "identical," as One Toyota claims. The Sonic II contract allowed either party to seek review of an award under California appellate rules of procedure. (See Sonic II , supra , 57 Cal.4th at pp. 1146-1147,
The parties dispute the precise font size. Kho asserts it is 7 points, while One Toyota insists it is 8.5 points. By any measure, the type is quite small.
A motion for judgment under Code of Civil Procedure section 631.8 is the equivalent of a nonsuit motion in a court trial. (See Ford v. Miller Meat Co. (1994)
The legislation was sponsored by Assemblyman Howard Berman. (Post v. Palo/Haklar & Associates (2000)
As amended in 2013, section 218.5, subdivision (a) provides that "if the prevailing party in the court action is not an employee, attorney's fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith." (Stats. 2013, ch. 142, § 1 ) Although it does not guarantee that wage claimants will be able to recover their attorney fees, this amendment largely eliminates the risk that they will be liable for their employer's fees.
Nor was Kho offered a version to read in his native language. (See Subcontracting Concepts (CT), LLC v. De Melo (2019)
Under Armendariz , "when an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court." (Armendariz , supra , 24 Cal.4th at pp. 110-111,
In Iskanian v. CLS Transportation Los Angeles, LLC (2014)
Separately, Kho asserts the agreement is unconscionable because it potentially extends to enforcement actions that may be brought by the Labor Commissioner. We do not address this new argument because, as Kho concedes, no such claims are at issue here.
A second document Kho signed the same day requires management to be notified in writing about compensation-related disputes but gives no indication such a notice would be sufficient to initiate arbitration. (See dis. opn., post , 251 Cal.Rptr.3d at pp. 755-756, 447 P.3d at p. 715.) Indeed, it would not be, since the agreement imposes no obligation on One Toyota to take any action upon receiving such a notice.
The dissent argues Kho could have deduced how to initiate arbitration by the agreement's reference to the California Arbitration Act. (Dis. opn., post , 251 Cal.Rptr.3d at pp. 755-756, 447 P.3d at p. 715.) While still speculative, this assertion would have more force if Kho had been given a copy of the documents he signed. It is undisputed he was not. It seems quite a stretch to assert that a mere reference to the California Arbitration Act in the "visually impenetrable" (ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691) paragraph Kho was given an inadequate opportunity to review, and which he would have had to recall without his own copy to assist him, informed Kho how to initiate arbitration.
At oral argument, One Toyota's counsel asserted that these procedural requirements would not apply in wage claim arbitrations because arbitrators would know to use simplified, Berman-like procedures instead. This argument was never previously made and is contrary to One Toyota's position throughout this appeal. In the Court of Appeal, One Toyota defended the complexity of its arbitral process by arguing that the agreement's "rules for discovery and motion practice are expressly the same as they would be in court-the same rules that the state legislature deemed fair enough to institute for all civil proceedings-with the only modifications noted in the four corners of the arbitration agreement and not requiring reference to any other documents." In its briefing here, One Toyota argued that what "Kho and the Labor Commissioner ... both truly desire is an arbitration procedure that resembles the Berman hearing process. However, an employee is not entitled to that ...." One Toyota never suggested its arbitral process did, in fact, resemble the Berman procedures. Moreover, counsel's representation at oral argument is directly contradicted by the language of the arbitration agreement. It states: "To the extent applicable in civil courts , the following shall apply and be observed : all rules of pleading (including the right of demurrer), all rules of evidence, all rights to resolution of the dispute by means of motions for summary judgment, judgment on the pleadings, and judgment under Code of Civil Procedure Section 631.8. The arbitrator shall be vested with authority to determine any and all issues pertaining to the dispute/claims raised, any such determinations shall be based solely upon the law governing the claims and defenses pleaded , and the arbitrator may not invoke any basis (including but not limited to notions of 'just cause') for his/her determinations other than such controlling law." (Italics added.) This language begins in the 32d line of the arbitration paragraph. It clearly requires the parties to follow the same pleading, evidence, and motion practice rules that govern civil litigation. Further, by requiring arbitration before a retired superior court judge, the agreement ensures the arbitrators will be experienced in enforcing these procedural rules. It is difficult, if not impossible, to square the strict language of the contract with One Toyota's belated assertion.
Although the resolution of this particular dispute has not been speedy, the delay is largely attributable to One Toyota. Kho filed a claim with the Labor Commissioner in October 2014. A settlement conference was held the next month, and a Berman hearing followed nine months later, in August 2015. The Labor Commissioner issued an award only a week after the hearing, around 10 months after Kho filed his claim. Litigation over One Toyota's motion to compel arbitration then consumed the next four years .
The dissent raises the same criticisms of the Berman procedure that this court considered at length, and rejected, in Sonic II , supra , 57 Cal.4th at pages 1160-1162,
It should be evident that our observations here, which the dissent quotes repeatedly (dis. opn., post , 251 Cal.Rptr.3d at pp. 739, 749, 761, 762-763, 764-765, 768, 447 P.3d at pp. 701-702, 709-710, 719-720, 721, 722-723, 725), pertain to civil litigation in general, not to the importation of civil litigation's formalities into an arbitration scheme that was forced on an employee through oppression and surprise as a substitute for an administrative procedure that we have repeatedly found to be expedient and affordable. (See, e.g., Sonic II , supra , 57 Cal.4th at pp. 1160-1161,
The dissent contends efficiencies of the Berman process are illusory because de novo appeals will simply bring the matters to superior court. (Dis. opn., post , 251 Cal.Rptr.3d at p. 755, 447 P.3d at pp. 714-715.) However, the Labor Commissioner explained at oral argument that de novo appeals are relatively rare. Most of the 30,000 to 40,000 claims filed with the commissioner each year are resolved at the initial settlement conference, with only around 10,000 proceeding to a Berman hearing. Of those 10,000, fewer than 500 cases result in a de novo appeal. Moreover, although trial courts generally have the power " ' "to adopt any suitable method of practice" ' " in cases before them (Murphy v. Kenneth Cole Productions, Inc. (2007)
One Toyota suggests that the Labor Commissioner could represent claimants in arbitration. An administrative agency's authority is limited to that conferred by statute or the Constitution. (Ferdig v. State Personnel Bd. (1969)
In light of this conclusion, we need not decide the Labor Commissioner's claim, raised below, that One Toyota forfeited its right to arbitrate.
After the trial court vacated the award, One Toyota obtained an order releasing its appeal bond. Whether section 98.2, subdivision (b) requires reinstatement or the posting of a new bond is a matter the trial court may consider on remand.
One Toyota argues the Labor Commissioner created a "catch-22" by asserting that One Toyota would waive its right to arbitrate if it participated in the Berman hearing. The record directly belies this claim. After One Toyota refused to participate in the hearing, the hearing officer notified it in writing: "[I]n the event that your client disagrees with the Order, Decision, or Award in this matter you will then have the opportunity to file an appeal or compel arbitration at that time ." (Italics added.) One Toyota cites nothing in the record to support its "catch-22" assertion.
The majority's emphasis on these facts is also inconsistent with its own assertions that the arbitration agreement's text is " 'visually impenetrable' " and virtually illegible (maj. opn., ante , 251 Cal.Rptr.3d at p. 727, 447 P.3d at p. 691), and that its "substance" is so "opaque" (ibid .) that "[i]t would have been nearly impossible" for Kho "to understand the contract's meaning" (maj. opn., ante , 251 Cal.Rptr.3d at p. 728, 447 P.3d at p. 692). If these assertions are accurate, then why does the majority find it significant that Kho had no opportunity to read the agreement?
To the extent the majority's FAA preemption analysis raises a similar "concern[ ]" about "consent" (maj. opn., ante , 251 Cal.Rptr.3d at p. 735, 447 P.3d at p. 698), it is erroneous for the same reason. (See Lamps Plus, Inc. v. Varela (2019) --- U.S. ----, [
In rejecting my analysis, the majority relies on the statement of counsel for the Labor Commissioner at oral argument that his "understand[ing]" is that there are "probably" fewer than 500 de novo proceedings per year. (See maj. opn., ante , 251 Cal.Rptr.3d at p. 447, fn. 17, 447 P.3d at p. 695, fn. 17.) Reliance on this statement of counsel's "understand[ing]," which obviously lacks foundation and is hearsay, is improper under our " 'settled' " rule that " 'on a direct appeal from a judgment [we] will not consider matters outside the record.' " (People v. Gardner (1969)
The majority concedes that resolution of this case through the Berman administrative process "has not been speedy," but asserts that "the delay is largely attributable to" OTO. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 731, fn. 14, 447 P.3d at p. 695, fn. 14.) The majority offers no factual basis for this assertion, and nothing in the record supports it. For example, nothing indicates why it took several months just for Kho to receive a response from the Labor Commissioner to his request for a Berman hearing, or why the hearing was finally set for "some 9 months" after he made his request. (Maj. opn., ante , 251 Cal.Rptr.3d at p. 720, 447 P.3d at p. 685.) In any event, whether OTO or a representative of the Labor Commissioner was responsible for the delay is irrelevant to my point that the Berman process is not necessarily speedy.
The Sonic II majority was incorrect about my analysis because I expressly referenced the fact that the employer in that case had "documented" three cases in which it took "a year or more" just to commence the Berman hearing. (Sonic II , supra , 57 Cal.4th at p. 1181,
The majority's other response - that this case is atypical because "[f]ew cases progress to appeal, and vanishingly few reach this court" (maj. opn., ante , 251 Cal.Rptr.3d at p. 736, 447 P.3d at p. 699) - ignores (1) the cost and delay attributable to the superior court proceedings, and (2) the fact that between 10,000 and 15,000 appeals are filed in our Courts of Appeal each year. (Jud. Council of Cal., 2017 Court Statistics Report, Statewide Caseload Trends: 2006-2007 Through 2015-2016, p. 48.)
