Motion to Compel Arbitration in Brian Conway vs. Crestwood Behavioral Health, Inc. / STAYED| Trellis.Law

On July 01, 2020 a Motion-Secondary was filed involving a dispute between Conway, Brian, and Blum, Patricia, Crestwood Behavioral Health, Inc., Dobbins, Derek, Norris, Pamela, for 36 Unlimited - Wrongful Termination in the District Court of Fresno County.

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BOUTIN JONES INC. E-FILED
9/28/2020 12:34 PM
Bruce M. Timm (SBN 199679)
Superior Court of California
Kimberly A. Lucia (SBN 266503)
Kendall C. Fisher (SBN 322155) County of Fresno
555 Capitol Mall, Suite 1500 By: M. Sanchez, Deputy
Sacramento, CA 95814
Telephone: (916) 321-4444
Fax: (916) 441-7597
Email: btimm@boutinjones.corn
klucia@boutinj ones.corn
kfisher@boutinjones.corn

Attorneys for Defendant Crestwood Behavioral
Health Inc., Derek Dobbins, Patricia Blum, and Pamela Norris

SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF FRESNO

12 BRIAN CONWAY, an individual, Case No. 20CECG01892
13 Plaintiff, ASSIGNED FOR ALL PURPOSES TO
HON. KIMBERLY GAAB
14

15 CRESTWOOD BEHAVIORAL HEALTH, INC., MEMORANDUM OF POINTS AND
DEREK DOBBINS, an individual; PATRICIA AUTHORITIES IN SUPPORT OF
16 BLUM, an individual; PAMELA NORRIS, an DEFENDANTS'ETITION TO
individual; and DOES 1-25, inclusive, COMPEL ARBITRATION
17
Defendants. DATE: January 27, 2021
18
TIME: 3:30 p.m.
19 DEPT.: 503

20 Action Filed: July 1, 2020
Trial Date: None Set
21

Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1]11460.2
TABLE OF CONTENTS
Page(s)
I, INTRODUCTION .....6

II. FACTUAL BACKGROUND.
A. Background on Crestwood and the Arbitration Agreement ...

B, Background on Conway.
C. The Parties'eet and Confer Efforts.
III. ARGUMENT
A. The Arbitration Agreement is Governed by the FAA ....10

B, The Arbitration Agreement Applies to Conway's Lawsuit ... ....10
10 C. The Arbitration Agreement is Enforceable.

I. California Statutes Disfavoring Arbitration are Preempted by the
FAA 12
12
2. The Arbitration Agreement is Not Unconscionable and Must be
13
Enforced ........................... 1 3
14 3. The Arbitration Agreement is Enforceable Under Armendariz...........16
15
4. The Arbitration Agreement is Not Illusory., ....17

IV. CONCLUSION. .... 1 8
17

Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
TABLE OF AUTHORITIES
Page(s)

State Cases
24-Hour Fitness, Inc. v. Superior Court
(1998) 66 Cal.App.4th 1199

Armendariz v, Foundation Health Psychcare Service, Inc.
(2000) 24 Cal.4th 83 .9, 10, 12, 13, 15, 16, 17

Brookwood v. Bank ofAmerica
(1996) 45 Cal.App.4th 1667 .... 1 1,
15

Bruni v. Didion
(2008) 160 Cal.App.4th 1272 13, 14
10
Chavez v. Sargent
(1959) 52 Cal.2d 162 12

12 Diaz v. Sohnen Enterprises
(2019) 34 Cal.5th 126. ....14
13
Dotson v. Amgen, Inc.
14
(2010) 181 Cal.App.4th 975 .. 13,14
15
Ericksen, Arbuthnot, McCarthy, Kearney &0 8'alsh, Inc. v. 100 Oak Street
16 (1983) 35 Cal.3d 312 ....9,11

17 Fitz v. NCR Corp.
(2004) 118 Cal.App.4th 702 ....15
18
Garcia v. Pexco, LLC
19
(2017) 11 Cal.App.5th 782
20
Guiliano v. Inland Empire Pers., Inc.
21 (2007) 149 Cal.App.4th 1276 .... 1 0

22 Guz v. Bechtel National, Inc.
(2000) 24 Cal.4th 317. 17
23
Iskanian v.CLS Transportation Los Angeles, LLC
24
(2014) 59 Cal.4th 348 . 15, 16
25
Mercuro v. Superior Court
(2002) 96 Cal.App.4th 167 . ....15

27 OTOLLC. v.Kho
(2019) 8 Cal.5th 111 ,...16
28

Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
Pinnacle Museum Tower Assn. v.Pinnacle Market
(2012) 55 Ca1.4t}1 223 .... 1 1,
1 5

Rosenthal v. Great Western Fin. Securities Corp.
(1996) 14 Cal.4th 394 ...10, 11

Saheli v. White Memorial Med. Cntr.
(2018) 21 Cal.App.5th 308 . 10

Sanchez v. Western Pizza Enterprises, Inc.
(2009) 172 Cal.App.4th 154

Serpa v. California Surety Investigations, Inc.
(2013) 215 Cal.App.4th 695 ..... 1 7

Sonic-Calabasas A, Inc. v. Moreno
(2013) 57 Cal.4th 1109
10
Western Security Bank v. Superior Court
(1997) 15 Cal.4th 232 12
12 Willis v. Prime Healthcare Services, Inc.
13 (2014) 231 Cal.App.4th 615 ..10

14 Federal Cases

15 AT&TMobility LLC v. Concepcion
(2011) 563 U.S, 333. 9, 12, 13, 17
16
Perry v. Thomas
17 (1987) 482 U.S. 483. ...10, 12
18
Preston v. Ferrer
19 (2008) 552 U.S. 346. ....9,12

20 Statutes

21 Code of Civil Procedure Section 1281.1.

22 Code of Civil Procedure Section 1281.2 .18

Code of Civil Procedure Section 1281 4 .... 1 8
24 Code of Civil Procedure Section 1638, .... 1 0
25
Government Code Section 12964.5 . 12, 13
26
Labor Code Section 201.
27
Labor Code Section 229. ....10, 12
28

Memorandum of Points And Authorities ln Support Of
Defendants'etition
To Compel Arbitration 1111460.2
Labor Code Section 558.1.

Labor Code Section 923. 12

Labor Code Section 1102.5

9 United States Code Section 3.

Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
I. INTRODUCTION
Plaintiff Brian Conway ("Conway") is a former, highly-compensated employee of
Defendant Crestwood Behavioral Health, Inc. ("Crestwood'). In this action, Conway asserts
multiple causes of action against Crestwood and several individual executives of Crestwood
(collectively, "Defendants"). However, at the commencement of his employment with Crestwood,
Conway signed an arbitration agreement pursuant to which he and Crestwood agreed that all

disputes arising out of his employment would be resolved through binding arbitration. Indeed,
Conway does not dispute that he signed an arbitration agreement. Yet, he comes to this Court

10 asserting a number of meritless allegations designed to avoid the clear application of the agreement

to the claims in this action. His efforts to avoid the arbitration agreement, which is valid and

12 enforceable under state and federal law, are improper. Accordingly, Defendants seek an order
13 compelling arbitration of each cause of action asserted in Conway's complaint.

14 II. FACTUAL BACKGROUND
15 Conway filed his complaint against Defendants on July 1, 2020, alleging the following
16 employment cause of actions against Crestwood: (1) termination in violation of public policy; (2)
17 interference with rights under the California Family Rights Act ("CFRA"); (3) retaliation for
18 exercise of rights under the CFRA; (4) retaliation in violation of Labor Code section 1102.5; (5)
19 failure to pay wages in violation of Labor Code section 201; (6) waiting time penalties; (7) liability

20 pursuant to Labor Code section 558.1; and (8) declaratory and injunctive relief. (Request for

21 Judicial Notice ("RJN"), Exh. A, Complaint for Damages (" Complaint").)

22 A. Background on Crestwood and the Arbitration Agreement
23 Crestwood is a provider of mental health services for clients of all ages. (Declaration of
24 Chad Arnold ("Arnold Decl."), $ 2.) Crestwood operates twenty-four (24) campuses, the majority

25 of which are located in central California. (Ibid.) Each campus contains one or more of nine (9)

26 separate programs: mental health rehabilitation centers, psychiatric health facilities, adult residential

27 programs, crisis stabilization units, crisis residential treatment programs, skilled nursing
28 neurobehavioral programs, skilled nursing/special treatment programs, and wellness clinics

Memorandum of Points And Authorities ln Support Of
Defendants'etition
To Compel Arbitration 1111460.2
(outpatient services for individuals transitioning back to independent living). (Ibid.)
Crestwood is a federal contractor and receives funding from the U.S. Department of Veteran

Affairs in connection with its provision of services to military veterans, as well as Medicaid funding

for its skilled nursing facilities. (Id., g 3.) It is also accredited by an international accreditor of
health atid human services and must comply with uniform, international standards. (Id., $ 4.) As a
healthcare provider, Crestwood is subject to federal laws and regulations specific to its industry,
including the Health Insurance Portability and Accountability Act of 1996. (Id., $ 5.) Crestwood
also contracts with out-of-state entities to provide consulting work, review programs, and provide
advice, among other things. (Id, tr6,) Its employees are regularly sent out of state to various parts
10 of the country to participate in required trainings and to make presentations on developments in the
mental health field. (Ibid.) Crestwood also advertises employment positions nationwide and
12 receives applications from candidates across the nation. (Id., $ 7.)

13 Crestwood's practice for new hires is to provide them with an onboarding and orientation.
14 (Id., $ 13.) A Business Office Manager or other designated individual provides the new employee
15 with new hire paperwork to review and sign. (Ibid.) The new hire paperwork includes Crestwood's

16 policies on Anti-Harassment and Discrimination, benefits enrollment materials, the employee
17 handbook, and an arbitration agreement. (Ibid.) Employees may either sign paperwork during the
18 onboarding meeting or later at their convenience. (Ibid.) Thus, it is not uncommon for employees

19 to take home some paperwork to review and complete at a later date. (Ibid.) The Business Office
20 Manager does not provide the new hire any advice or guidance on completing the new hire
21 paperwork. (Ibid.) If questions arise regarding the content or meaning of any documents, including
22 the arbitration agreement, the individual conducting the onboarding contacts their manager, a

23 Campus Administrator, and/or Crestwood's Human Resources Department. (Ibid.; Declaration of
24 Martha Crawford (" Crawford Decl."), $ 3.) Crestwood's practice was to allow an employee to have
25 an attorney review the arbitration agreement if he or she wished. (Arnold Decl., tt 13.)

26 B. Background on Conway
27 Conway was hired by Crestwood on September 1, 2015, as the Administrator of Crestwood's

28 Kingsburg Healing Center, a mental health rehabilitation center. (Id., $ 8, Exh. A.) He was hired
7
Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
at an annual salary of $ 96,000 year, with a generous benefits package and ability to earn a significant

bonus. (Ibid.; Complaint, $ 39 (noting Conway earned a bonus of approximately $ 247,000 in

2018).) At the time of hire, Conway claimed to have more than thirty (30) years of experience in
social services, mental health, substance abuse treatment, education, law enforcement, and business.

(Id., $ 9, Exh. B.) He further claimed to have "extensive experience and knowledge" in the areas of

policy development and contract compliance, among other things. (Ibid.) Conway had also owned
and operated his own small business, which had a staff of eight to ten employees, for approximately

ten years. (Ibid.) His resume also reflects that he holds a Bachelor's Degree in Business
Administration, as well as teaching credentials in law enforcement, business management, and
10 business ownership. (Ibid.) In short, Conway was a highly compensated senior level employee
with extensive experience in the industry, as well as in contract compliance, business, and law
12 enforcement.

13 At the time of hire, Conway signed a "Dispute Resolution Ec Arbitration" policy agreement

14 which provides for arbitration of all employment-related disputes between Crestwood and Conway

15 (the "Arbitration Agreement" ). (Id., [[ 10, Exh. C; Complaint, $ 58, Exh. A.) During his onboarding,
16 Conway never asked any questions about the Arbitration Agreement. (Crawford Decl., $$ 5, 7;

17 Arnold Decl., $ 11.) Conway did not ask for more time to review the Arbitration Agreement,
18 whether he was required to sign it, or if he could have an attorney review it. (Crawford Decl., $$ 5-
19 6.) Further, no one at Crestwood told Conway he had to sign the Arbitration Agreement or he would

20 be terminated, and no one told him he could not have an attorney review it. (Crawford Decl,, $ 5;
21 see also Arnold Decl., $ 13.) Consistent with Crestwood's practice, if Conway had raised any
22 questions or concerns during his onboarding, or had he made a request for attorney review, the
23 matter would have been addressed by Crestwood. (Arnold Decl., $ 13; Crawford Decl., Pg 5-6.)
24 Even after signing the Arbitration Agreement, Conway did not contact Human Resources to discuss

25 the agreement. (Arnold Decl., $ 11.) As the Administrator of the Kingsburg Healing Center,
26 Conway had access to the form Arbitration Agreement and was in charge of compliance for the
27 facility. (Ibid.; Crawford Decl., $ 7.) ln that role, he never made an inquiry to Human Resources
28 about Crestwood's use of the Arbitration Agreement. (Arnold Decl., $ 11; Crawford Decl., $ 7.)
8
Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
C. The Parties'eet and Confer Efforts
On August 28, 2020, counsel for Defendants had a telephone call with counsel for Plaintiff.

(Declaration of Kimberly A. Lucia (" Lucia Decl."), $ 2.) During that call counsel for Defendants
advised counsel for Plaintiff that the Arbitration Agreement was enforceable and that Crestwood

had previously succeeded in efforts to enforce that particular form of Arbitration Agreement. (Ibid.)
Counsel for Defendants also asked if Plaintiff would stipulate to move the matter to arbitration.

(Ibid.) Counsel for Plaintiff refused, stating that itwas their belief that California was hostile to

employment arbitration agreements. (Ibid.) Nonetheless, counsel for Plaintiff agreed to consider

any authority provided by Defendants to the contrary. (Ibid.) Therefore, on September 1, 2020,
10 counsel for Defendants sent a detailed letter outlining, among other things, the authority under
which the Arbitration Agreement would be enforceable. (Id., Exh. A.) Counsel for Plaintiff
12 responded on September 9, 2020, stating their analysis was "substantially different," yet they
13 provided no authority or analysis to support Conway's position. (Id., Exh. B.) Accordingly,
14 Defendants had no choice but to file this petition to compel arbitration.

15 III. ARGUMENT
16 The Federal Arbitration Act ("FAA") "declare[s] a national policy favoring arbitration," and,

17 as such, arbitration agreements must be enforced according to their terms. (Preston v. Ferrer (2008)
18 552 U.S. 346, 353; see also Ericksen, Arbuthnot, McCarthy, Kearney 4 Walsh, Inc. v. 100 Oak Street

19 ("Ericksen") (1983) 35 Cal.3d 312, 322 (noting California's public policy in favor of arbitration);
20 Armendariz v. Foundation Health Psychcare Service, Inc. (2000) 24 Cal.4th 83, 96-97; Id. at p. 98

21 (under state and federal law, arbitration agreements may only be invalidated for the same reasons as

22 other contracts).) The FAA applies with equal force in state courts as it does in federal courts.

23 (Ericksen, supra, 35 Cal.3d at p. 323.) Indeed, pursuant to Code of Civil Procedure section 1281.1,

24 except in limited circumstances not present here, courts are required to order arbitration where a valid

25 and enforceable agreement to arbitrate exists. (See also 9 U.S.C. ) 3 (requiring courts to stay trial court
26 actions pending arbitration).)

27 Further, where the FAA applies, it is well-established that it preempts all conflicting state laws.

28 (Preston, supra, 552 U.S. at p. 353; ATd'cT Mobility LLC v. Concepcion (2011) 563 U.S. 333, 343
9
Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
(noting that generally applicable contract defenses are preserved under the FAA, but no state law rules

may stand as an obstacle to the FAA); Armendariz, supra, 24 Cal.4th at p. 98 (same); Perry v. Tltomas

(1987) 482 U,S. 483, 491-492 (the federal policy embodied by the FAA conflicts with Labor Code

section 229 thereby preempting section 229).) Once the moving party demonstrates that an arbitration

agreement exists and applies to the disputes at issue, the burden shifts to the party resisting arbitration

to prove, by a preponderance of the evidence, that there is a defense to enforcetnent. (See Rosenthal v.

Great II'estern Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) Here, as set forth in more detail

below, the Arbitration Agreement is governed by the FAA, clearly applies to the employment-related
claims in Conway's Complaint, and Conway has no valid defense to enforcement.

10 A. The Arbitration Agreement is Governed by the FAA
As noted above, where an agreement is governed by the FAA, arbitration is favored and the

12 express language of the contract governs. (Saheli v. JFhite Memorial Med. Cntr. (2018) 21

13 Cal.App.5th 308; Civ. Code ) 1638.) Here, the Arbitration Agreement expressly states "This Policy

14 is governed by the Federal Arbitration Act...." (Arnold Decl., Exh. C, |'1
2(b), at p. 3.) Even
15 where not expressly stated, the FAA applies when the agreement at issue "involve[s] interstate
16 conunerce." (Guiliano v. Inland Empire Pers., Inc. (2007) 149 Cal.App.4th 1276, 1286 (noting the

17 requirement to broadly construe the phrase).) Here, Crestwood has amply demonstrated its

18 involvement in interstate commerce, including through its receipt of federal funding, contracts with
19 out-of-state entities for services, and the participation of its employees in interstate activities. (See
20 Arnold Decl., $$ 3-7; see, e.g. 8'illis v. Prime Healthcare Services, Inc. (2014) 231 Cal.App.4th
21 615, 625-626 (internal citations omitted) (noting the FAA applied to employment arbitration
22 agreement because defendant's use of interstate commerce to purchase equipment and receipt of
23 Medicare and Medicaid funding are transactions involving interstate commerce).) Thus, there can
24 be no question that the Arbitration Agreement is governed by the FAA.
25 B. The Arbitration Agreement Applies to Conway's Lawsuit
Conway concedes that there is an agreement to arbitrate by attaching a copy to his Complaint
27 which contains his signature under the language: "I acknowledge I have received and agree to

28 Crestwood's Dispute Resolution 4 Arbitration Policy revised March 2014." (Complaint, P 58, Exh.
10
Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460. 2
A, at p. 4; see also Arnold Decl., $ 10, Exh. C, at p. 4.) Further, the Agreement clearly applies to the

employment-related disputes alleged in the Complaint and covers claims against both Crestwood and

any of its "agents or Employees." (Arnold Decl., Exh. C, $ 2(b), at p, 3 (stating the agreement "applies

to any employment-related dispute between an Employee and Crestwood Behavioral Health, Inc. or

any of Crestwood's agents or Employees, whether initiated by an Employee or by Crestwood."); see
also Garcia v.Pexco, LLC (2017) 11 Cal.App.5th 782, 786 (nonsignatory defendants may invoke
arbitration where claims against them are intertwined with those against the signatory defendant).) By
executing the Arbitration Agreement, Conway unequivocally became bound by its terms. (Pinnacle
Museum Tower Assn., supra, 55 Cal.4th at p. 236 (arbitration clause is binding even if the party never

10 actually read it); Brookwood v, Bank ofAmerica (1996) 45 Cal.App.4th 1667, 1674 (employee bound

by the terms contained within a signed agreement, regardless of whether employee read it or not); 24-
12 Hour Fitness, Inc. v.Superior Court (1998) 66 Cal.App.4th 1199, 1215, quoting Brookwood, supra,
13 45 Cal.App.4th at p, 1674 ("A party cannot use his own lack of diligence to avoid an arbitration
14 agreement.").)

15 Thus, given the clear existence of an arbitration agreement to Conway's claims, he must prove,

16 by a preponderance of the evidence, that there is a defense to enforcement. (See Rosenthal, supra, 14

17 Cal.4th at p. 413; Pinnacle Museum Tower Assn. v. Pinnacle Market (2012) 55 Cal.4th 223, 247 (party
18 resisting arbitration bears the burden of proving unconscionability).) Moreover, any doubts concerning

19 arbitrability are to be resolved in favor of arbitration. (Ericksen, supra, 35 Cal.3d at p. 323.).) Here,

20 as set forth below, Conway has no valid defense to enforcement.

21 C. The Arbitration Agreement is Enforceable
22 In an effort to avoid arbitration, Conway makes a number of allegations in his Complaint
which he asserts are sufficient to invalidate the Arbitration Agreement. (Complaint, PP 58-66.)
24 These allegations can be summed up in three separate arguments: (1) the Arbitration Agreement
25 conflicts with public policy as expressed in several California statutes; (2) the Arbitration
26 Agreement is unconscionable; and (3) the Arbitration Agreement is illusory. As set forth below,
27 each of these arguments is entirely without merit.

Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
1. California Statutes Disfavorizzg Arbitration are Preenzpted by the FAA
In his Complaint, Conway asserts that the Arbitration Agreement "frustrate[s] California
public policy" and is in violation of several California statutes — Labor Code sections 229, 923, and

Government Code section 12964.5. (Complaint, g 60-63, 65.) However, to the extent any of these
statutes even apply to this action, the FAA's applicability to the Arbitration Agreement means these

conflicting state laws are preempted. (Preston, supra, 552 U.S. at p. 353; A Td'cT Mobility LLC, supra,

563 U.S. at p. 343 (noting that generally applicable contract defenses are preserved under the FAA, but

no state law rules may stand as an obstacle to the FAA).)

Specifically, Labor Code section 229, which purports to invalidate arbitration agreements as

10 applied to claims for wages, has already been held by the United States Supreme Court to be preempted

by the FAA. (See Perry, supra, 482 U.S. at pp. 491-492 (the federal policy embodied by the FAA

12 conflicts with Labor Code section 229 and is, therefore, preempted).)

13 Labor Code section 923, which provides a right to negotiate terms and conditions of labor on a

14 voluntary basis, addresses the right of employees to engage in collective action to negotiate a collective

15 bargaining agreement. (See Chavez v, Sargent (1959) 52 Cal.2d 162, 189-191 (holding that Labor

16 Code section 923 declares a state public policy to form labor organizations so that there may be
17 collective action by employees to negotiate the terms of their employment).) Thus, this statute does
18 not apply to this action or the Arbitration Agreement. However, even assuming, arguendo, that section

19 923 applies to the Arbitration Agreement, an arbitration agreement governed by the FAA may not be

20 invalidated simply because it is mandatory. (See Armendariz, supra, 24 Cal.4th at p, 102 (outlining
21 minimum requirements for mandatory employment arbitration agreements).) Accordingly, Labor
22 Code section 923 conflicts with the FAA and is preempted.

23 As for Government Code section 12964.5, which provides that an employer may not condition

24 employment on the signing of specific types of agreements, it does not apply to this action for two

25 reasons. First, the statute was not enacted until January 1, 2019, long aAer Conway signed the

26 Arbitration Agreement at issue and the statute does not apply retroactively to agreements in existence

27 prior to its effective date. (JFestern Security Bank v. Superior Court (1997) 15 Cal.4th 232, 243.)
28 Second, nothing in section 12964.5 prohibits arbitration. Finally, Conway's claim that the Arbitration
12
Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
1 Agreement's prohibition of disclosure of the outcome of arbitration is against the public policy set forth

2 in Government Code section 12964.5, does not assist him because this provision is preempted by clear

3 authority prohibiting California courts &om using conflicting state laws to invalidate arbitration

4 agreements. (See Complaint, $ 63; AT&TMobility LLC, supra, 563 U.S. at p. 343.) Thus, this statute

5 is also preempted.

6 Conway's reliance on the alleged public policy as evidenced by these statutes is misplaced as

7 the law is clear — the FAA preempts state laws which stand as an obstacle to arbitration.

2. The Arbitration Agreementis Not Unconscionable and Must be Enforced
9 Because the Arbitration Agreement is governed by the FAA, the Court may only refuse to

10 enforce it if a generally applicable contract defense applies, such as a finding that the agreement is

11 unconscionable. (See AT&TMobilityLLC, supra, 563 U.S. at p. 343 (noting that generally applicable

12 contract defenses are preserved under the FAA); Armendariz, supra, 24 Cal.4th at p. 98.) The doctrine

13 of unconscionability includes both a procedural element and a substantive element. (Armendariz,

14 supra, 24 Cal.4th at p. 114.) For an arbitration agreement to be unconscionable, itmust be both
15 procedurally and substantively unconscionable. (Ibid.) It is not necessary that procedural and

16 substantive unconscionability be present in equal amounts. (Ibid.) Instead, they are evaluated on a

17 "sliding scale" so that the more evidence there is of procedural unconscionability, the less evidence of

18 substantive unconscionability will be needed to invalidate an agreement, and vice-versa. (Ibid.) In his

19 Complaint, Conway contends that the Arbitration Agreement is unconscionable and, therefore, cannot

20 be enforced. Conway's arguments are without merit.

21 a. The Arbitration A cement is Not Procedurall Unconscionable
22 Procedural unconscionability focuses on the making of the agreement and arises where there

23 is oppression or surprise. (Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 980; Armendariz,

24 supra, 24 Cal, 4th at p. 114).) "Oppression results from unequal bargaining power, when a

25 contracting party has no meaningful choice but to accept contract terms." (Dotson, supra, 181

26 Cal.App.4th at p. 980.) "Surprise involves the extent to which the supposedly agreed-upon terms
27 of the bargain are hidden in a prolix printed form drafted by the party seeking to enforce the disputed
28 terms." (Bruni v.Didion (2008) 160 Cal.App.4th 1272, 1288.) Here, there are no factors present
13
Memorandum of Points And Authorities In Support Of
Defendants'etition
To Compel Arbitration 1111460.2
which demonstrate that the Arbitration Agreement was procedurally unconscionable.

First, nothing in the Arbitration Agreement expresses that it is a condition of employment,

that Conway would not be permitted to continue his employment if he did not sign the Arbitration

Agreement, or that he could not negotiate itsterms. (Arnold Decl., tt 13, Exh. C.) Indeed, had
Conway requested to have an attorney review the Arbitration Agreement, he would have been
permitted to do so. (Id., $ 13.) Moreover, by remaining in Crestwood's employment following
execution of the Arbitration Agreement, Conway manifested his assent to its terms. (Diaz v. Sohnen
Enterprises (2019) 34 Cal.5th 126, 130 (noting that an employee who remains employed after
notification that arbitration is a condition of employment impliedly assents to an agreement to
10 arbitrate).)

Regardless, a contract presented on a "take-it-or-leave-it" basis does not make an agreement
12 per se unenforceable. (Dotson, supra, 181 Cal.App.4th at p. 980 (internal citations omitted).)
13 Rather, Conway must demonstrate that there was oppression resulting from "unequal bargaining
14 power, when a contracting party has no meaningful choice but to accept contract terms." (Id.) Such
15 is not the case here where Conway was a highly compensated and sophisticated employee. (Arnold
16 Decl., $ 8, Exh. B; Complaint, $ 39.) Indeed, one might assume from his opportunity to earn six
17 figure bonuses that he knowingly and willingly entered into the arbitration agreement in exchange

18 for a very generous compensation package. (Ibid.) Regardless, even where an agreement is not
19 voluntary, there is only a minimal degree of procedural unconscionability. (Dotson, supra, at pp.

Case Info

Judge

Hamilton, Jeffrey Y. Track Judge’s New Case

Case No.

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Document Filed Date

September 28, 2020

Case Filing Date

July 01, 2020

County

Parties

Barsotti, Todd B. Attorney for the Plaintiff
Blum, Patricia Defendant
Conway, Brian Plaintiff
Crestwood Behavioral Health, Inc. Defendant
Dobbins, Derek Defendant
Lucia, Kimberly A. Attorney for the Defendant
Norris, Pamela Defendant
Pro Se Attorney for the Plaintiff
Stephen Cornwell Attorney
Peter Bradley Attorneys for Plaintiffs
Bruce Timm Attorneys for Defendants
Savanna Corr Attorneys for Defendants
Kendall Fisher-Wu Attorneys for Defendants

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Motion-Secondary: Brian Conway vs. Crestwood Behavioral Health, Inc. / STAYED

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