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Filed 5/2/17 Calvillo v. Arakelian Enterprises CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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
SECOND APPELLATE DISTRICT
DIVISION FIVE
MARGARITO CALVILLO et al.,
Plaintiffs and Appellants,
v.
ARAKELIAN ENTERPRISES, INC.,
Defendant and Respondent.
B270477
(Los Angeles County
Super. Ct. No. BC488201)
APPEAL from orders and a judgment of the Superior Court
of Los Angeles County, Barbara A. Meiers, Judge. Affirmed.
Gary Rand & Suzanne E. Rand-Lewis and Suzanne E.
Rand-Lewis for Plaintiffs and Appellants.
Epstein Becker & Green, Adam C. Abrahms, William O.
Stein and Amy B. Messigian for Defendant and Respondent.
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I. INTRODUCTION
Plaintiffs, Margarito Calvillo and Jose L. P. Guzman,
appeal from orders and a judgment following denial of their
petition to vacate an arbitration award. Plaintiffs sued
defendant, Arakelian Enterprises, Inc., doing business as Athens
Services. Plaintiffs assert we should reverse two orders. First,
plaintiffs argue we should reverse the order denying their motion
to vacate the arbitration award. Second, plaintiffs argue we
should reverse the order granting defendant’s motion to compel
arbitration. We disagree and affirm those two orders.
II. BACKGROUND
A. Plaintiffs’ Complaint
On July 12, 2012, plaintiffs filed their complaint against
defendant and Andy Lucero. Mr. Calvillo is 53 years old. Mr.
Guzman is 37 years old. Both were former employees of
defendant which is in the waste collection business. Defendant
has its primary place of business in Los Angeles, California. Mr.
Lucero was plaintiffs’ manager.
Plaintiffs allege the following. Mr. Calvillo and Mr.
Guzman were truck drivers and began working for defendant in
2007. Mr. Lucero became their manager in 2008. Mr. Lucero
began to harass plaintiffs. Mr. Lucero stated Mr. Calvillo was too
old. Mr. Lucero wanted to get rid of Mr. Calvillo. Mr. Lucero
changed plaintiffs’ shifts, shortened their hours and sent them
home before their shift ended in an effort to get them to quit. Mr.
Lucero called plaintiffs and yelled at them. He questioned
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plaintiffs on why they were taking the amount of time that they
needed.
In September 2010, Mr. Guzman was assaulted at work by
a co-worker wielding a knife. Mr. Guzman reported the incident
to Mr. Lucero and the police. Mr. Guzman requested Mr. Lucero
investigate the incident. Mr. Lucero told Mr. Guzman to forget
about the incident. This caused Mr. Guzman extreme stress and
anxiety. Mr. Guzman developed high blood pressure. Mr.
Guzman was not informed he could file for worker’s compensation
benefits regarding the workplace injury and resulting disability.
Plaintiffs worked in unsafe vehicles and had to drive
dangerous trucks. Plaintiffs complained they had to lift and
carry too much weight, which caused them back problems.
Plaintiffs complained to Mr. Lucero about the harassing and
constant hostile environment, as well as the working conditions.
Nothing was done. Mr. Calvillo developed neck, back and
stomach problems due his work environment. Mr. Calvillo also
fell at work due to the unsafe conditions. Mr. Calvillo requested
time to go visit the doctor. Mr. Lucero stated Mr. Calvillo was too
old and political. Mr. Calvillo was also not advised of his right to
file for worker’s compensation benefits for his workplace injury
and resulting disability.
Plaintiffs complained of Mr. Lucero’s practice of requiring
the trucks to carry more than the maximum amount of allowable
weight. Plaintiffs also complained the trucks were being left
loaded with waste and recycling which violated an unspecified
code requirement. On November 8, 2010, plaintiffs filed a
complaint with defendant’s human resources department against
Mr. Lucero. Plaintiffs had a meeting scheduled with defendant’s
general manager at 2:00 p.m. that day. At the meeting, plaintiffs
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were handed their paychecks and told they were fired.
Defendant’s general manager stated plaintiffs were too political.
Plaintiffs allege 11 causes of action: contract breach; good
faith and fair dealing implied covenant breach; wrongful
termination in violation of public policy; violation of the Fair
Employment and Housing Act for age and disability
discrimination; intentional infliction of emotional distress;
negligence; violation of Civil Code sections 51 and 51.7; violation
of Business and Professions Code section 17200; violation of the
Consumers Legal Remedies Act; intentional misrepresentation,
negligent misrepresentation, and concealment; and violation of
Labor Code sections 512 and 1198 for denial of rest breaks, meal
periods and overtime pay.
Plaintiffs requested as relief general, special, compensatory
and punitive damages. Plaintiffs also requested a preliminary
and permanent injunction to purge all derogatory information in
plaintiffs’ employment records. Plaintiffs also sought to bar all
dissemination of such information to future employers, employees
or others. No other injunctive relief was sought.
B. Motion to Compel Arbitration
On October 23, 2012, defendant and Mr. Lucero moved to
compel arbitration and for the action to be stayed. They argued
that in March 2010, plaintiffs received both an English and
Spanish version of two documents--a “Mutual Arbitration Policy”
and “Employee Agreement to Arbitrate” (the arbitration
agreements). The arbitration agreements provide in pertinent
part: “The [Mutual Arbitration Policy] applies to Company
[defendant] employees, regardless of length of service or status,
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and covers all disputes relating to or arising out of an employee’s
employment with the Company or the termination of that
employment. Examples of the type of disputes or claims covered
by the [Mutual Arbitration Policy] include, but are not limited to,
claims against employees for fraud, conversion, misappropriation
of trade secrets, or claims by employees for wrongful termination
of employment, breach of contract, fraud, employment
discrimination, harassment or retaliation under the Americans
with Disabilities Act, the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act of 1964 and its amendments, the
California Fair Employment and Housing Act or any other state
or local anti-discrimination laws, tort claims, wage or overtime
claims or other claims under the Labor Code, or any other legal
or equitable claims and causes or action recognized by local, state
or federal law or regulations. The [Mutual Arbitration Policy]
does not cover workers’ compensation claims, unemployment
insurance claims or any claims that could be made to the
National Labor Relations Board. Because the [Mutual
Arbitration Policy] changes the forum in which you may pursue
claims against the Company and effects [sic] your legal rights,
you may wish to review the [Mutual Arbitration Policy] with an
attorney or other advisor of your choice. The Company
encourages you to do so.”
Pursuant to their terms, the arbitration agreements are
governed solely by the Federal Arbitration Act. The Arbitration
Rules of ADR Services, Inc. govern the arbitration procedures.
The arbitration agreements specifically provide for mutuality of
obligations: “Your decision to accept employment or to continue
employment with the Company constitutes your agreement to be
bound by the [Mutual Arbitration Policy]. Likewise, The [sic]
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Company agrees to be bound by the [Mutual Arbitration Policy].
This mutual obligation to arbitrate claims means that both you
and the Company are bound to use the [Mutual Arbitration
Policy] as the only means of resolving any employment-related
disputes.” The arbitration agreements also state plaintiff’s
maximum out-of-pocket expense for arbitration costs under ADR
Services, Inc. was an amount equal to the local civil court filing
fee. Defendant would pay the remaining fees and costs.
Defendant and Mr. Lucero submitted a declaration from
Peter Webster, defendant’s human resources director. Mr.
Webster declared he had personal knowledge that defendant
requires its employees to sign an arbitration agreement covering
disputes arising out of their employment. Mr. Webster also
declared that true and correct copies of plaintiffs’ signed
arbitration agreements were attached to the motion to compel
arbitration. Copies of the Spanish language arbitration
agreements with signatures purporting to be plaintiffs’ were
attached.
Plaintiffs argued no valid arbitration agreements existed.
Plaintiffs argued they never signed the arbitration agreements.
Plaintiffs submitted their own declarations and asserted they
never: saw the arbitration agreements prior to being shown the
documents by their counsel; received copies; nor signed the
arbitration agreements. Plaintiffs also argued the arbitration
agreements were unconscionable. Plaintiffs contended the
agreements were procedurally unconscionable because they were
adhesive employment contracts. Plaintiffs argued the
agreements were substantively unconscionable because they
allegedly waived their rights under the Consumers Legal
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Remedies and the Fair Employment and Housing Acts. Plaintiffs
also argued the arbitration agreements limited discovery.
In reply, defendant submitted Mr. Lucero’s declaration.
Mr. Lucero declared he communicated defendants’ new 2008
employment policies to plaintiffs. He also declared plaintiffs
signed acknowledgements of these policies in his presence. Mr.
Lucero declared that in March 2010, Keng Balaco-Wong met with
plaintiffs regarding new policies. Attached to Mr. Lucero’s
declaration were copies of plaintiffs’ signed arbitration
agreements.
The trial court granted the motion to compel arbitration
and stayed the action. The trial court found plaintiffs signed the
arbitration agreements. Among other things, the trial court
compared plaintiffs’ signatures on the arbitration agreements
with those on their declarations.
C. Arbitration Proceedings, Arbitrator’s Rulings and Motions to
Vacate the Award
The arbitration hearing was held on July 28 and 29, and
August 1, 2014 before Retired Judge Patricia Collins. On April
30, 2015, the arbitrator issued her award in favor of defendant
and Mr. Lucero and against plaintiffs. The arbitrator specifically
rejected plaintiffs’ argument that the arbitrator could redetermine
the arbitrability issue, citing the ADR Services, Inc.
arbitration rules.
On August 7, 2015, plaintiffs moved to vacate the
arbitration award. Plaintiffs argued the arbitrator refused to
consider the arbitrability issue, which exceeded her powers under
Code of Civil Procedure section 1286.2, subdivision (a)(4).
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Defendant argued that under section 7 of the ADR Services, Inc.
arbitration rules, the arbitrator lacked the power to rule on her
own jurisdiction. Rule 7 of the arbitration rules of ADR Services,
Inc. provides in pertinent part, “Unless the issue of arbitrability
has been previously determined by the court, the arbitrator shall
have the power to rule on his or her own jurisdiction, including
any objections with respect to the existence, scope or validity of
the arbitration agreement.” The trial court denied plaintiffs’
motion to vacate the award on January 19, 2016. The pending
court action was subsequently dismissed.
III. DISCUSSION
A. Standards of Review
The order granting the motion to compel arbitration is
reviewable on appeal here, where there has been entry of
judgment or an appealable order. (Code Civ. Proc., §§ 906,
1294.2; Abramson v. Juniper Networks, Inc. (2004) 115
Cal.App.4th 638, 648-649.) The order denying plaintiffs’ motion
to vacate the arbitration award is appealable. (Code Civ. Proc.,
§§ 904.1, subd. (a)(10), 1294, subd. (b).) We review the written
arbitration agreements de novo. (Fagelbaum & Heller LLP v.
Smylie (2009) 174 Cal.App.4th 1351, 1360; Abramson v. Juniper
Networks, Inc., supra, 115 Cal.App.4th at pp. 649-650.) We
review the trial court’s resolution of disputed facts for substantial
evidence. (Fagelbaum & Heller LLP v. Smylie, supra, 174
Cal.App.4th at p. 1360; Metalclad Corp v. Ventana
Environmental Organizational Partnership (2003) 109
Cal.App.4th 1705, 1716.)
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Plaintiffs make three arguments as to why the arbitration
agreements are unenforceable: insufficient evidence existed to
demonstrate plaintiffs agreed to arbitrate their claims; the Labor
Code, Fair Employment and Housing Act and Consumers Legal
Remedies Act claims were not arbitrable; and the arbitration
agreements were unconscionable. Plaintiffs further contend the
trial court erred by denying their motion to vacate the award
because the arbitrator exceeded her powers. We address only
those arguments that were raised in plaintiffs’ brief. At oral
argument, plaintiffs raised a number of contentions that were not
presented in their brief with proper headings and development of
the issues. We will not consider those contentions. (Provost v.
Regents of Univ. of Calif. (2011) 201 Cal.App.4th 1289, 1294; Roe
v. McDonald’s Corp. (2005) 129 Cal.App.4th 1107, 1114.)
B. The Parties’ Agreements to Arbitrate
Plaintiffs assert the evidence presented to demonstrate
that they had agreed to arbitrate their claims was insufficient.
Plaintiffs argue Mr. Webster lacked personal knowledge that
plaintiffs signed the arbitration agreements. This argument is
unpersuasive. Substantial evidence supports the trial court’s
finding that plaintiffs agreed to arbitrate. Mr. Webster declared
he is a human resources manager for defendant. He declared he
had personal knowledge of the documents attached to the motion
to compel arbitration, including the signed arbitration
agreements.
Additionally, the trial court compared the signatures on the
arbitration agreements with those on plaintiffs’ declarations and
found: “[T]he arbitration agreements filed by defendants . . .
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have signatures that mostly look like the same handwriting style
as those signatures on plaintiffs’ own declarations separately
filed on 11/9/12.” The Court of Appeal has held: “Witness
signatures can be authenticated by a variety of means including .
. . comparison by the trier of fact . . . .” (Estate of Ben-Ali (2013)
216 Cal.App.4th 1026, 1037; Evid. Code, § 1417; see Estate of
Nielson (1980) 105 Cal.App.3d 796, 801.)
Plaintiffs also argue defendants did not present evidence of
mutual intent to enter into the arbitration agreements. This
argument is meritless. The arbitration agreements state
plaintiffs’ acceptance of or continued employment with defendant
was an agreement to be bound by the arbitral provisions.
Additionally, by signing the arbitration agreements, plaintiffs
acknowledged receipt and review of the documents. Accordingly,
substantial evidence supports the trial court’s finding the parties
agreed to arbitrate their disputes. We need not address
plaintiffs’ arguments concerning whether Mr. Lucero’s
declaration was untimely.
C. The Labor Code, Fair Employment and Housing Act and
Consumers Legal Remedies Act Claims were Arbitrable
Plaintiffs argue that several of the claims in their
complaint were not arbitrable. Plaintiffs contend their Labor
Code claims were pursuant to Labor Code section 229 and were
not arbitrable. Labor Code section 229 provides in pertinent
part, “Actions to enforce the provisions of this article for the
collection of due and unpaid wages claimed by an individual may
be maintained without regard to the existence of any private
agreement to arbitrate.” This argument is meritless. As noted,
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the Federal Arbitration Act governs the arbitration agreements.
Under federal and state law arbitration is a matter of consent or
agreement by the parties. (Granite Rock Co. v. International
Brotherhood of Teamsters (2010) 561 U.S. 287, 298; Cable
Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1355.)
The parties’ agreements that their disputes would be governed by
the Federal Arbitration Act are under California contractual law
enforceable choice of law provisions (Biller v. Toyota Motor Corp.
(9th Cir. 2012) 668 F.3d 655, 662-663; Harris v. Bingham
McCutchen LLP (2013) 214 Cal.App.4th 1399, 1404; Rodriguez v.
American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1120-
1121.) Thus, we apply the Federal Arbitration Act to the present
disputes. The Federal Arbitration Act preempts the Labor Code
section 229 limitation on the duty to arbitrate. (Perry v. Thomas
(1987) 482 U.S. 483, 492; Lane v. Francis Capital Management
LLC (2014) 224 Cal.App.4th 676, 687.)
Additionally, plaintiffs do not assert a claim for collection of
due and unpaid wages under Labor Code section 229. Rather,
plaintiffs’ Labor Code claims are in part for failure to provide rest
breaks and meal periods under Labor Code section 512. In
addition, plaintiffs’ Labor Code claims are for the failure to
permit inspection of an employee’s personnel records under Labor
Code section 1198.5. None of these claims fall within Labor Code
section 229. (See Lane v. Francis Capital Management LLC,
supra, 224 Cal.App.4th at p. 684.)
Plaintiffs also assert the arbitration agreements required
the Fair Employment Housing and Consumers Legal Remedies
Acts claims be waived. This argument is also meritless. The
arbitration agreements require arbitration of these causes of
action, not waiver of the claims. Our Supreme Court has held:
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“‘[B]y agreeing to arbitrate a statutory claim, a party does not
forgo the substantive rights afforded by the statute; it only
submits to their resolution in an arbitral, rather than a judicial,
forum.’ [Citation.] [Fn. omitted.]” (Armendariz v. Foundation
Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 98-99
(Armendariz) [regarding Fair Employment and Housing claims];
Lane v. Francis Capital Management LLC, supra, 224
Cal.App.4th at p. 686 [“[T]he fact that a claim is based on a
nonnegotiable or unwaivable right does not preclude arbitration
of that claim.”].) Accordingly, the Fair Employment and Housing
Act claim was arbitrable so long as plaintiffs could fully vindicate
the statutory cause of action in the arbitral forum. (Armendariz,
supra, 24 Cal.4th at pp. 100-102; Lane v. Francis Capital
Management LLC, supra, 224 Cal.App.4th at p. 686.) The
Consumers Legal Remedies Act claim was also arbitrable as to
damages. (Cruz v. PacifiCare Health Systems, Inc. (2003) 30
Cal.4th 303, 317 (Cruz); Broughton v. Cigna Healthplans (1999)
21 Cal.4th 1066, 1084 (Broughton).)
Our Supreme Court held a suit to enjoin false advertising
under the Consumers Legal Remedies Act for plaintiffs acting as
private attorney generals on the public’s behalf is not arbitrable.
(Cruz, supra, 30 Cal.4th at p. 307; Broughton, supra, 21 Cal.4th
at pp. 1079-1080.) Plaintiffs make no allegations in which they
seek a public injunction under the Consumers Legal Remedies
Act. We conclude all of plaintiffs’ claims under the Labor Code,
the Fair Employment and Housing Act and the Consumers Legal
Remedies Act were arbitrable.
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D. The Arbitration Agreements are not Unconscionable
Plaintiffs also assert the arbitration agreements are
unconscionable. Both state and federal laws favor enforcement of
valid arbitration agreements. (Armendariz, supra, 24 Cal.4th at
p. 97; Wagner Construction Co. v. Pacific Mechanical Corp. (2007)
41 Cal.4th 19, 25 [strong public policy in favor of arbitration].)
However, courts will not enforce arbitration provisions that are
unconscionable or contrary to public policy. (Pinnacle Museum
Tower Assn. v. Pinnacle Market Development (U.S.), LLC (2012)
55 Cal.4th 223, 247 (Pinnacle Museum); Armendariz, supra, 24
Cal.4th at p. 114.) The party opposing arbitration, in this case
plaintiffs, bear the burden of proving that an arbitration
agreement is unenforceable based on unconscionability.
(Pinnacle Museum, supra, 55 Cal.4th at p. 247; Chin v. Advanced
Fresh Concepts Franchise Corp. (2011) 194 Cal.App.4th 704, 708.)
Our Supreme Court has stated: “‘Unconscionability
consists of both procedural and substantive elements. The
procedural element addresses the circumstances of contract
negotiation and formation, focusing on oppression or surprise due
to unequal bargaining power. [Citations.] Substantive
unconscionability pertains to the fairness of an agreement's
actual terms and to assessments of whether they are overly harsh
or one-sided. [Citations.]’” (Pinnacle Museum, supra, 55 Cal.4th
at p. 246; Armendariz, supra, 24 Cal.4th at p. 114.) Both
procedural and substantive unconscionability must be shown.
However, they need not be present to the same degree and are
evaluated on a sliding scale. (Pinnacle Museum, supra, 55
Cal.4th at p. 246; Armendariz, supra, 24 Cal.4th at p. 114.) Our
Supreme Court explained, “‘[T]he more substantively oppressive
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the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the
term is unenforceable, and vice versa.’ [Citation.]” (Pinnacle
Museum, supra, 55 Cal.4th at p. 247; accord, Armendariz, supra,
24 Cal.4th at p. 114.)
We find there was a modest level of procedural
unconscionability. The employment agreements were adhesive
contracts. (See Sanchez v. Valencia Holding Co., LLC (2015) 61
Cal.4th 899, 915 [adhesive nature of contract is sufficient to
establish some degree of procedural unconscionability]; Carbajal
v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 243.) We turn now
to the issue of substantive unconscionsability.
Plaintiffs assert the arbitration agreements were
substantively unconscionable on two grounds. They argue the
arbitration agreements failed to identify the set of rules
governing the arbitration. They also argue the arbitration
agreements limited discovery to an unconscionable level. We do
not find substantive unconscionability. As noted, the arbitration
agreements identified the ADR Services, Inc. arbitration rules as
the governing rules. Under Rule 17 of the ADR Services, Inc.
arbitration rules: “The arbitrator shall have the authority to
order such discovery, by way of deposition, interrogatory,
document production, or otherwise, as the arbitrator considers
necessary to a full and fair exploration of the issues in dispute,
consistent with the expedited nature of arbitration. [¶] With
respect to arbitration of employment claims, the parties are
entitled to discovery sufficient to adequately arbitrate their
claims, including access to essential documents and witnesses, as
determined by the arbitrator(s).” The arbitration rules thus
provided for adequate discovery. (See Armendariz, supra, 24
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Cal.4th at pp. 104-105; Roman v. Superior Court (2009) 172
Cal.App.4th 1462, 1475-1476.) Accordingly, the arbitration
agreements were not unconscionable to the degree they may be
declared unenforceable.
E. The Trial Court Did Not Err by Denying the Motion to Vacate
the Award
Plaintiffs also assert the arbitrator exceeded her authority
by not ruling on the issue of arbitrability in violation of Code of
Civil Procedure section 1286.2, subdivision (a)(4). Plaintiffs’
argument fails. An arbitrator’s powers are limited by the terms
of the arbitration agreements. (Gueyffier v. Ann Summers, Ltd.
(2008) 43 Cal.4th 1179, 1185; Advanced Micro Devices, Inc. v.
Intel Corp. (1994) 9 Cal.4th 362, 375.) The arbitration
agreements provided that the proceedings would be governed by
the ADR Services, Inc. arbitration rules. As noted, Rule 7 of the
ADR Services, Inc. arbitration rules provides the arbitrator with
the power to determine his or her jurisdiction, “Unless the issue
of arbitrability has been previously determined by the court . . . .”
It is undisputed the trial court determined the arbitrability issue
prior to the matter proceeding to arbitration. Thus, under the
arbitration agreements and Rule 7 of the ADR Services, Inc.
arbitration rules, the arbitrator lacked the power to determine
her own jurisdiction. The trial court did not err by denying
plaintiffs’ motion to vacate the arbitration award.
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IV. DISPOSITION
The orders and judgment are affirmed. Defendant,
Arakelian Enterprises, Inc., doing business as Athens Services,
may recover its appeal costs from plaintiffs, Margarito Calvillo
and Jose L. P. Guzman.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
TURNER, P. J.
I concur:
KRIEGLER, J.
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BAKER, J., Concurring
I do not believe Title 9 United States Code section 2
governs the arbitration agreements at issue and thereby
preempts Labor Code section 229. With that caveat, I join the
majority’s opinion.
BAKER, J.