Vega v. Frandeli Group

 

 

 

 

 

 

 

 

 

 

 

Filed 10/17/13  Vega v. Frandeli Group CA4/3

 

 

 

 

 

 

 

 

 

>NOT TO BE PUBLISHED IN OFFICIAL REPORTS

 

California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b).  This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

 

 

 

 

IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA

 

FOURTH
APPELLATE DISTRICT

 

DIVISION THREE

 

 
>

CHEREE VEGA,         Plaintiff and Respondent,               v.   FRANDELI GROUP LLC,         Defendant and Appellant.

G047847            (Super. Ct. No. 30-2012-00590568)            O P I N I O N

 

                        Appeal from an order of
the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Orange
County, William M. Monroe, Judge.  Affirmed.

                        Payne & Fears and
Daniel F. Fears for Defendant and Appellant.

                        Calderone Law Firm,
Vincent Calderone and Megan Hayati for Plaintiff and Respondent.

*                    *                    *

                       

                        Plaintiff Cheree Vega
filed a complaint in Orange County Superior Court alleging retaliation in
violation of the Fair Employment and
Housing Act (Gov. Code, § 12940 et seq.) (FEHA), wrongful termination in
violation of public policy, and violation of Labor Code section 226,
subdivision (f), after she was terminated from her employment at Frandeli
Group, LLC (Frandeli).  Frandeli moved to
compel arbitration, arguing that Vega had signed a valid arbitration agreement
(the agreement) at the time she was hired. 
The trial court found the agreement “permeated with unconscionability”
and declined to enforce it.  We agree
with the trial court that the agreement was unconscionable, and therefore
affirm.

I

FACTS

                        From
early January to mid-February 2012, Vega worked for Frandeli as an independent
human resources consultant.  She was then
hired as a full-time employee.  According
to Vega, on the first day of her employment, she was given paperwork to
complete, including the agreement, and was told that she “had to sign the
agreement as a condition of employment with Frandeli.  [Human resources representative Nancy] Caron
told me that if I did not sign the Arbitration Agreement, Frandeli could not
hire me.”   

                        Vega
signed the agreement, which is a five-page, stand-alone document.  It was signed by Angy Chin, chief financial
officer, on Frandeli’s behalf.  According
to Chin, she met with Vega and “took whatever time was necessary to explain the
contents of Ms. Vega’s new hire packet.” 
Chin does not contradict Vega’s statement that she was told signing the
agreement was required as a condition of employment; indeed, she admits signing
the agreement was required.  The record
does not include a declaration by Caron.

                        The first paragraph of the agreement
stated:  “Except as otherwise mutually agreed in writing, the Parties
hereby irrevocably agree to arbitrate in accordance with the terms of this
Agreement to Arbitrate (‘Agreement’) any legal disputes, claims, controversies,
or disagreements among them . . . whatsoever relating to, arising from, or
concerning Employee’s employment with Employer, including . . . wrongful
termination or discrimination claims . . . shall be referred to and resolved
exclusively by binding arbitration as well as this Agreement itself. . . .  [¶] Without limitation, this Agreement shall
apply to any legal disputes, claims, controversies, or disagreements among the
Parties relating to or arising from harassment
or discrimination claims or matters, state law, and federal law (including,
without limitation, the Americans with Disabilities Act and the Civil Rights
Act of 1964).” 

                        In
March 2012, Vega was directed to hire a new human resources benefits
representative.  According to her
verified complaint, Vega eventually settled on a candidate named Anthony
Walker, who is African-American.  She set
up an appointment for Walker to
meet with Chin, her supervisor.  Chin
eventually told Vega, who is also African-American, that Vega could not hire Walker,
because Frandeli’s CEO, Doug Pak, “did not want to have an African American HR
department.”  Vega “was appalled and
surprised by Chin’s comment.  She told
Chin that Mr. Walker was the best candidate she had come across in her
search.  Chin repeated again that because
Pak had stated he didn’t want an African American HR [d]epartment, that Ms.
Vega should continue her search to interview other candidates and find someone
who was not African American.” 

                        Vega’s
complaint stated she felt uncomfortable about excluding African-Americans from
a continued search for no reason other than their race and informed Chin that
she did not wish to do so.  Chin informed
her that she was required to do so. Vega delegated the task to Caron. 

                        Vega
told Chin and Darci Mangus, Frandeli’s chief operating officer, that she felt
it was wrong to exclude Walker
because of his race.  She said that she
still wanted to hire him because she felt he was the best candidate for the
job.  Ultimately, Vega was asked by Chin
and Mangus to hire a Caucasian woman for the position.  Vega opposed this decision because this
candidate’s qualifications were not as strong as Walker’s.  She told Chin and Mangus that she disagreed
with the decision to hire a less qualified candidate over a more qualified one
because of race.  She complained that
making hiring decisions based on race “was not right.” 

                        Soon
after, on June 5, Vega was terminated from her employment at Frandeli.  She was told by Mangus that she was “not a
‘good fit’” for the company.  She was
informed she was being terminated for not participating in a lunchtime “skill
building meeting” with other employees. 
She was also told she was not being let go for work related performance
issues.  She was told that she could
still provide contract work for Frandeli when needed. 

                        Vega
filed a complaint with the Department of Fair Employment and Housing on August 3, 2012, requesting an
immediate right-to-sue notice.  The
request was granted.  On August 13, Vega
filed the instant action in superior court, stating causes of action for
retaliation under FEHA, wrongful termination in violation of public policy, and
a violation of Labor Code section 226, subdivision (f), which pertains to the
refusal to allow an employee to copy certain employment records. 

                        On
September 24, Frandeli filed a motion to
compel arbitration, arguing that Vega had signed a valid and enforceable
agreement to arbitrate that applied to the instant dispute.  Vega opposed, arguing the agreement was
permeated by both procedural and substantive unconscionability and that
severance of the offending clauses was not an adequate cure.  Frandeli’s reply disputed Vega’s
unconscionability arguments and also argued that any unconscionable provisions
could be severed by the court. 

                        The court heard the
matter on November 27, 2012.  The court found that an arbitration agreement
existed, but concluded the agreement was both procedurally and substantively
unconscionable.  With respect to
substantive unconscionability, the court focused on three provisions raised by
Vega: a fee-shifting provision, a confidentiality requirement (or “gag order”),
and limits on discovery. 

 

                        The
court found all three provisions unconscionable, and concluded:  “Given the fee/cost shifting provision, the
gag order, and the confused discovery rights, this arbitration agreement is
permeated with unconscionability, and reflects a systemic effort to impose
arbitration on a weaker party.  Severance
of the offensive provisions is not an adequate cure, and no grounds exist to
‘reform’ the contract by re-writing the fee shifting, discovery and gag order
provisions.  The interests of justice
would not be furthered by severance or ad hoc reformation, and defendant
offers no reason to engage in such drastic cure methods.”  Accordingly, the motion to compel arbitration
was denied.  Frandeli now appeals.

II

DISCUSSION

>A. 
Standard of Review

                        “We review de novo a
trial court’s determination of the validity of an agreement to arbitrate when
the evidence presented to the trial court was undisputed.  [Citations.]  . . . â€˜Whether an arbitration
provision is unconscionable is ultimately a question of law.  [Citations.]’ 
[Citation.]”  (>Parada v. Superior Court (2009) 176
Cal.App.4th 1554, 1567 (Parada).)  Where factual disputes do exist, we review
the court’s determinations for substantial evidence.  (Murphy
v. Check ’N Go of California, Inc. (2007) 156 Cal.App.4th 138, 144.)  The court’s ruling on severance is reviewed
for abuse of discretion.  (>Ibid.)

 

B.  Existence of Arbitration
Agreement

                        California has a strong
public policy in favor of arbitration as an expeditious and cost-effective way
of resolving disputes.  (Moncharsh v.
Heily & Blase (1992) 3 Cal.4th 1, 9.) 
Code of Civil Procedure section 1281.2href="#_ftn1" name="_ftnref1" title="">[1]
requires a court to order arbitration “if it determines that an agreement to
arbitrate . . . exists . . . .”  (§
1281.2.) 

                        In Rosenthal v. >Great Western Fin. Securities Corp. (1996)
14 Cal.4th 394 (Rosenthal), the
California Supreme Court stated, “[W]hen a petition to compel arbitration is
filed and accompanied by prima facie evidence of a written agreement to
arbitrate the controversy, the court itself must determine whether the
agreement exists

.
. . .  Because the existence of the
agreement is a statutory prerequisite to granting the petition, the petitioner
bears the burden of proving its existence by a preponderance of the evidence.”  (Id. at
p. 413.)  “‘Prima facie evidence is that
degree of evidence which suffices for proof of a particular fact until
contradicted and overcome, as it may be, by other evidence, direct or
indirect.’”  (People v. Van Gorden (1964) 226 Cal.App.2d 634, 636-637, quoting 18
Cal.Jur.2d, Evidence, § 13, p. 435.) 

                        Here, the evidence of an
agreement to arbitrate is undisputed. 
The prima facie evidence is the agreement itself, which Vega admits to
signing.  Thus, Frandeli has met its
burden on this point.  Once the moving
party has established the existence of the arbitration agreement, the burden
shifts to the party opposing arbitration to establish, by a preponderance of
the evidence, the factual basis for any defense to enforcement.  (Rosenthal,> supra, 14 Cal.4th at p. 413; >Pinnacle Museum Tower Assn. v. Pinnacle
Market Development (US)>, LLC (2012) 55 Cal.4th 223, 246.) 

                       

>C. 
Unconscionabilityhref="#_ftn2"
name="_ftnref2" title="">[2]>

                        Vega argues that the
agreement should not be enforced because it is unconscionable.  Civil Code section 1670.5, subdivision (a),
codifies unconscionability as a reason for refusing a contract’s
enforcement.  It states:  “If the court as a matter of law finds the
contract or any clause of the contract to have been unconscionable at the time
it was made the court may refuse to enforce the contract, or it may enforce the
remainder of the contract without the unconscionable clause, or it may so limit
the application of any unconscionable clause as to avoid any unconscionable
result.”  This provision applies to
arbitration agreements.  (Armendariz
v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz), abrogated in part on another ground in AT&T Mobility LLC. v. Concepcion (2011) __ U.S. __ [131 S.Ct. 1740, 1746].)

                        Under
Armendariz, compulsory arbitration of FEHA claims is not per se
unconscionable so long as the arbitration agreement:  “‘(1) provides for neutral arbitrators, (2)
provides for more than minimal discovery, (3) requires a written award, (4) provides
for all of the types of relief that would otherwise be available in court, and
(5) does not require employees to pay either unreasonable costs or any
arbitrators’ fees or expenses as a condition of access to the arbitration
forum.’”  (Armendariz, supra, 24 Cal.4th at p. 102.)

                        Further, the agreement
must not be unconscionable as a whole.  “‘[U]nconscionability has both a “procedural” and a
“substantive” element,’ the former focusing on ‘“oppression”’ or
‘“surprise”’ due to unequal bargaining power, the latter on ‘“overly harsh”’ or
‘“one-sided”’ results.  [Citation.]  ‘The prevailing
view is that [procedural and substantive unconscionability] must both be
present in order for a court to exercise its discretion to refuse to enforce a
contract or clause under the doctrine of unconscionability.’  [Citation.] 
But they need not be present in the same degree. . . . [T]he 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.)  We discuss
each of these in turn.

 

                        1.  Procedural Unconscionability

                        Procedural
unconscionability addresses the manner in which agreement to the disputed term
was sought or obtained, such as unequal bargaining power between the parties
and hidden terms included in contracts of adhesion.  (24 Hour Fitness, Inc. v. Superior Court
(1998) 66 Cal.App.4th 1199, 1212-1213.) 
“The procedural element of an unconscionable contract generally takes
the form of a contract of adhesion, ‘“which, imposed and drafted by the party
of superior bargaining strength, relegates to the subscribing party only the
opportunity to adhere to the contract or reject it.”’  [Citation.]” 
(Little v. Auto Stiegler,
Inc. (2003) 29 Cal.4th 1064, 1071.)

                        It
is not reasonably subject to dispute that the agreement was a contract of
adhesion.  Frandeli argues that Vega did
not produce evidence that “she signed the Agreement under protest, was
threatened in any way, asked for additional time to review the Agreement, or
attempted to negotiate different terms or otherwise modify the Agreement.”  Vega was not offered the agreement with a
statement that it was subject to negotiation; it was handed to her, along with
other documents, to complete and sign. 
Any inference Frandeli implies we should draw that the agreement was
negotiable is belied by Chen’s declaration, which stated that employees are
“required to sign” the agreement as a condition of employment.  Neither Chen nor any other representative of
Frandeli offered evidence that the agreement was presented on anything but a
“take it or leave it” basis.  The
agreement was a contract of adhesion.

                        Our
conclusion, however, that the arbitration provisions “are adhesion contracts
‘heralds the beginning, not the end, of our inquiry into its
enforceability.’  [Citation.]  A procedural unconscionability analysis also
includes consideration of the factors of surprise and oppression.  [Citation.]” 
(Parada, supra, 176
Cal.App.4th at p. 1571.)  Frandeli argues
that no surprise was present, because in Vega’s previous role as a consultant,
she was responsible for giving new hires a packet of documents that included
the arbitration agreement.  She was,
therefore, familiar with both the existence of the agreement and its
contents.  We agree, but surprise is not
the only relevant factor, and its absence alone does not defeat Vega’s claim of
unconscionability.  (Armendariz, supra, 24 Cal.4th at p. 114;
Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 87 (>Gutierrez), [“The
procedural element focuses on ‘oppression’ or
‘surprise.’” (italics added)].) 

                        “‘The
oppression component arises from an inequality of bargaining power of the
parties to the contract and an absence of real negotiation or a meaningful
choice on the part of the weaker party.’ 
[Citation.]”  (Morris v. Redwood Empire Bancorp (2005) 128
Cal.App.4th 1305, 1319.)  “[I]n the case
of preemployment arbitration contracts, the economic pressure exerted by
employers on all but the most sought-after employees may be particularly acute,
for the arbitration agreement stands between the employee and necessary
employment, and few employees are in a position to refuse a job because of an
arbitration requirement.”  (Armendariz, supra, 24
Cal.4th at p. 115.)

                        Vega’s
declaration stated that she “had to sign the agreement as a condition of
employment with Frandeli.”  She was told
“that if I did not sign the Arbitration Agreement, Frandeli could not hire me.”  Chen’s declaration states that the agreement
“is one of the documents that all newly hired employees at Frandeli are
required to sign as a condition of employment.” 
As the trial court put it:  “[I]n
order for plaintiff to secure employment, she had no choice but to sign the
agreement.”  We conclude this is sufficient
to establish oppression, and the oppressive nature of obtaining Vega’s consent
resulted in a significant degree of procedural unconscionability.  

 

                        2.  Substantive Unconscionability

                        While procedural unconscionability focuses on how
the agreement was obtained and executed, “[s]ubstantive unconscionability
focuses on whether the provision is overly harsh or one-sided and is shown if
the disputed provision of the contract falls outside the ‘reasonable
expectations’ of the nondrafting party or is ‘unduly oppressive.’”  (Gutierrez v. Autowest, Inc., supra, 114 Cal.App.4th at p.
88.)  Substantively unconscionable terms may take various forms, but may
generally be described as unfairly one-sided. 
(Little v. Auto Stiegler,
Inc., supra, 29 Cal.4th at p. 1071.)  “Where a party with superior
bargaining power has imposed contractual terms on another, courts must
carefully assess claims that one or more of these provisions are one-sided and
unreasonable.”  (Gutierrez, supra, 114 Cal.App.4th at p. 88.)  The trial court found three provisions in the
agreement substantively unconscionable, and we address each in turn.  

 

                        >a. 
Cost and fee provision

                        Section 6 of the
agreement states:  “Employer shall pay the arbitrator’s expenses
and fees, any meeting
room charges, and any other such expenses that would not have been incurred if
the case had been litigated in the judicial forum having jurisdiction over
it.  Unless otherwise ordered by the
arbitrator, each Party shall pay its own attorney fees, witness fees, and other
expenses incurred by the Party for his or her own benefit.  [¶] The arbitrator may award the prevailing
Party his, her, or its expenses and fees of arbitration, including reasonable
attorney fees and witness fees, in such proportion as the arbitrator
decides.  In general, it is the intention
of the Parties that the prevailing Party be awarded its attorneys fees and
costs, and that the arbitrator determine the prevailing Party, or the lack
thereof, for this purpose.”

                        In
Armendariz, the court held:  “‘[W]hen
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.  This rule will ensure that employees bringing
FEHA claims will not be deterred by costs greater than the usual costs incurred
during litigation, costs that are essentially imposed on an employee by the
employer.’  [Citations.]”  (Armendariz, supra, 24 Cal.4th at p. 95.)

                        In FEHA cases, a
prevailing plaintiff may ordinarily recover attorney fees unless special
circumstances would render the award unjust, but a prevailing defendant may
recover them only if the plaintiff’s action was frivolous, unreasonable,
without foundation, or brought in bad faith. 
(Gov. Code, § 12965, subd. (b); see Chavez
v. City of Los Angeles (2010) 47
Cal.4th 970, 985; Trivedi v. Curexo
Technology Corp. (2010) 189 Cal.App.4th 387, 394-395.) 

                        Frandeli
argues that the agreement does not permit the arbitrator to disregard “settled
California law with respect to the standards it must meet to recover attorneys’
fees.”  This is belied by the plain
language of section 6:  “In general, it is the intention of the
Parties that the prevailing Party be awarded its attorneys fees and costs, and
that the arbitrator determine the prevailing Party, or the lack thereof, for
this purpose.”  Indeed, the arbitrator is
not only permitted but directed to determine the prevailing party and award
attorney fees and costs to that party. 
This entirely disregards the FEHA standards for awarding fees, and
because of the different standards for awarding plaintiffs and defendants attorney
fees in FEHA cases, this provision is also incredibly one-sided.  This is not merely about, as Frandeli seems
to think, the costs of the arbitration itself, but about the potential for a
huge award of attorney fees that Vega would be highly unlikely to face in
court.  The court did not err by finding
this provision unconscionable.

 

                        >b. 
Confidentiality provision

                        Section
7 of the agreement states:  “The Parties
agree that, except to the extent that disclosure may be required pursuant to
subpoena, deposition notice, discovery requests, court order or process, or
otherwise required by law or ordered by the arbitrator, the conduct of, and
decision, results, and any award of the arbitration are and shall be
confidential and shall be kept confidential and secret by the Parties to this
Agreement, and their respective attorneys, agents, and employees, except that
the Parties may disclose the contents of this Agreement to their respective
attorneys, auditors, accountants, insurers, clergy, and immediate family.  The Parties further agree that any comment by
the Parties, and their attorneys, agents, and employees regarding the result of
any arbitration shall be limited to a statement that the Parties settled their
differences and resolved all controversies between them.  Neither Party shall make, directly or
indirectly, an[y] public derogatory remarks regarding the other Party to the
arbitration.” 

                        While
facially neutral, the one-sidedness of this provision is fairly obvious.  The trial court cited Davis v. O’Melveny & Myers (9th Cir. 2007) 485 F.3d 1066,
1078-1079.  In Davis, the parties were not permitted to
disclose to anyone not directly involved in the mediation or arbitration the
content of pleadings and papers, nor were they permitted to disclose that a
controversy between them existed and there was a resulting mediation or
arbitration.  The Davis court held the
provision was impermissibly one-sided because it prevented potential plaintiffs
from “accessing precedent while allowing O’Melveny
to learn how to negotiate and litigate its contracts in the future,” thereby
“plac[ing] O’Melveny ‘in a far superior legal
posture’.”  (Id. at p. 1078.) 
Frandeli attempts to distinguish this provision by stating section 7
only requires the parties keep “the conduct of, and decision, results, and any
award of the arbitration are and shall be confidential.”  It does not explain, however, any functional
difference, nor do we see one. 

                        Frandeli
cites Chin v. Advanced Fresh Concepts Franchise Corp.> (2011) 194 Cal.App.4th 704, which
included a brief discussion of a confidentiality clause it found permissible,
because it provided exceptions for disclosure required by law or with prior
consent by the parties.  (>Id. at p. 713.)  But this ignores the practical impact of the
confidentiality provision mentioned by the trial court and not apparently
raised in Chin — the
restriction such a provision placed on Vega because she could not conduct investigation “by way of informal
interviews.”  This presents not only an
issue of one-sidedness, but a significant practical limitation on her ability
to pursue her claims.  Not only must any
result be kept secret, but so must “the conduct of” the arbitration
itself.  Thus, Vega would be in violation
if she attempted to informally contact or interview any potential witness
outside the formal discovery process. 
Such a limit would not only increase Vega’s costs unnecessarily by
requiring her to conduct depositions instead of informal interviews, it also
defeats the purpose of using arbitration as a simpler, more time-effective
forum for resolving disputes.  We
therefore agree with the trial court that the provision is unconscionable.

 

                        >c. 
Discovery provision

                        Section
4 of the agreement, entitled “Conduct of Arbitration,” states, in relevant
part:  “The arbitrator shall have the power to (a) issue subpoenas
for the attendance of witnesses and subpoenas duces tecum for the production of
books, records, documents, and other evidence; (b) order depositions to be used
as evidence; (c) subject to the limitations on discovery enumerated above, to
enforce the rights, remedies, procedures, duties, liabilities, and obligations
of discovery as if the arbitration were a civil action before a California
superior court; (d) conduct a hearing on the arbitrable issues; and (e)
administer oaths to Parties and witnesses.” 


                        The
trial court stated that section 4 “appears to limit discovery to subpoenas and
depositions which the arbitrator orders. 
There is no express right to conduct written discovery.”  Frandeli disagrees, pointing to this
provision in section 3:  “If the Parties
are unable to resolve a dispute covered in Section 1 of this Agreement through
negotiation or other informal means, they shall submit any such dispute . . .
to binding arbitration, before one (1) arbitrator, in accordance with California
Code of Civil Procedure §§1280 through 1294.2; provided, however, that the
terms of this Agreement shall prevail when in conflict with the provisions of
the Code of Civil Procedure . . . .” 
Thus, Frandeli argues, section 1283.05, which states that the
parties are entitled to the same discovery as they would if the action were in
superior court, applies to the agreement. 


                        We
disagree that this constitutes an “express authoriz[ation]”  to written discovery; at best, it
incorporates the statute by reference, and at worst, based on the express
language that the agreement controls over the Code of Civil Procedure when
there is a conflict, it abrogates it. 
Section 4 only mentions subpoenas for documents and witnesses, and
depositions.  It then states “subject to the limitations on
discovery enumerated above, [the arbitrator shall have the power] to enforce
the rights, remedies, procedures, duties, liabilities, and obligations of
discovery as if the arbitration were a civil action before a California
superior court.”  What “limitations” are
contemplated if these limitations do not exclude forms of discovery not
mentioned earlier in the same paragraph?   


                        “The denial of adequate discovery in arbitration
proceedings leads to the de facto frustration of the employee’s statutory
rights.”  (Armendariz, supra, 24
Cal.4th at p. 104.)  “We agree that
adequate discovery is indispensable for the vindication of FEHA claims.”  (Ibid.)  While something less than the full discovery
rights included in the Code of Civil Procedure is permissible, “[plaintiffs]
‘are at least entitled to discovery sufficient to adequately arbitrate their
statutory claim . . . .’”  Discovery
rights are particularly important to plaintiffs, who have the href="http://www.fearnotlaw.com/">burden of proof.  (Martinez v. Master Protection Corp.
(2004) 118 Cal.App.4th 107, 118.)

                        Because
of its ambiguity and poor drafting, the agreement could lead to an arbitrator’s
severe restrictions on Vega’s right to discovery.  We therefore find the court did not err in
concluding the provision was unconscionable. 
Further, this provision compounds the one-sidedness evident in the
fee-shifting and confidentiality provisions.

                       

D.  Severance

                        Frandeli
argues that even if the provisions discussed above are unconscionable,
severance is the appropriate remedy because the agreement is not permeated with
unconscionability.  It claims that
because the provisions are “mutual and bilateral,” they do not permeate the
agreement with unconscionability.  But in
Armendariz, supra, 24
Cal.4th at page 124, the California Supreme Court explained that “multiple
defects indicate a systematic effort to impose arbitration . . . not simply as
an alternative to litigation, but as an inferior forum that works to the [stronger
party]’s advantage.”  The Court further
stated:  “The overarching inquiry is
whether ‘“the interests of justice . . . would be furthered”’ by
severance.  [Citation.]”  (Ibid.)

                        While the unconscionable
provisions here might be, on their face, “mutual and bilateral,” those
provisions serve only the interests of the party with stronger bargaining power
— Frandeli.  Having such provisions in
the agreement creates a “heads I win, tails you lose” benefit for Frandeli.  If a potential claimant does not notice or
complain, they get the benefit of the unconscionable provisions.  If someone does object, however, they simply
attempt to sever those provisions while keeping the benefit of the rest of the
agreement.  (See >Parada, supra, 176 Cal.App.4th at p. 1584 [“‘The [drafter] is saddled with
the consequences of the provision as
drafted.’”].)

                        Those benefits are
considerable.  The burden on Vega in
creating potential liability for hundreds of thousands of dollars in attorney
fees, a liability she would never face in court unless her case was deemed
frivolous, is obvious.  Keeping the
allegations in a case closed to public view nearly always benefits the
defendant in a civil case, as it surely would here, while not helping Vega at
all.  Limiting discovery also obviously
benefits the party that does not bear the burden of proof, in this case,
Frandeli. 

                        Thus,
while the terms are facially “mutual and bilateral,” Frandeli drafted this
agreement with full knowledge that the most likely roles in litigation were
Frandeli as the defendant and an employee as plaintiff, and these terms were
included only to benefit Frandeli.  Thus,
given the multiple unconscionable provisions and obvious intent to disadvantage
the weaker party, we conclude the interests of justice would not be served by
severing the unconscionable provisions. 
The trial court did not error by declining to do so.

 

 

 

III

DISPOSITION

                        The
order is affirmed.  Vega is entitled to
her costs on appeal.

 

 

                                                                                   

                                                                                    MOORE,
ACTING P. J.

 

WE
CONCUR:

 

 

 

ARONSON,
J.

 

 

 

IKOLA,
J.