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  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
  • KUENZINGER, JACLYN L vs DOCTORS MEDICAL CENTER MODESTO INCOther Employment: Unlimited document preview
						
                                

Preview

Electronically Filed 10/26/2020 2:55 PM MAYALL HURLEY P.C. Superior Court of California 1 WILLIAM J. GORHAM III (SBN: 151773) County of Stanislaus wgorham@mayallaw.com Clerk of the Court 2 VLADIMIR J. KOZINA (SBN: 284645) By: Sabrina Bouldt, Deputy vjkozina@mayallaw.com 3 2453 Grand Canal Boulevard Stockton, California 95207-8253 4 Telephone: (209) 477-3833 Facsimile: (209) 473-4818 5 Attorneys for Plaintiff JacLyn Kuenzinger 6 7 SUPERIOR COURT OF CALIFORNIA 8 COUNTY OF STANISLAUS 9 JACLYN L. KUENZINGER, as proxy for the California Labor and Workforce Case No. CV-20-002799 10 Development Agency, 11 Plaintiff, OPPOSITION TO DEFENDANT’S 12 AMENDED PETITION TO COMPEL vs. ARBITRATION AND STAY ACTION; 13 MEMORANDUM OF POINTS AND 14 DOCTORS MEDICAL CENTER AUTHORITIES IN SUPPORT MODESTO, INC., a corporation; and 15 DOES 1-20, inclusive, Date: November 20, 2020 Time: 8:30 am 16 Defendants. Dept: 21 17 18 19 20 21 22 23 24 25 26 OPPOSITION TO AMENDED PETITION TO COMPEL ARBITRATION AND STAY ACTION; 27 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 28 1 Table of Contents 2 3 OPPOSITION TO AMENDED PETITION TO COMPEL ARBITRATION .......................1 MEMORANDUM OF POINTS AND AUTHORITIES ........................................................2 4 I. INTRODUCTION ......................................................................................................2 5 II. STATEMENT OF FACTS .........................................................................................4 6 III. LAW AND ARGUMENT ..........................................................................................5 7 A. Plaintiff Cannot Be Compelled to Arbitrate PAGA Claims Based on Any Pre- Dispute Agreement, Whether the CBA or the FTP. .............................................5 8 B. Neither the FAA nor the LMRA Dictate a Different Result. ................................7 9 C. The CBA Does Not Require Arbitration of PAGA Claims, and the FTP Expressly Excludes PAGA Claims. ......................................................................8 10 D. The FTP Is both Procedurally and Substantively Unconscionable. ......................9 11 1. Procedural Unconscionability ......................................................................... 10 12 2. Substantive Unconscionability........................................................................ 11 13 IV. CONCLUSION...........................................................................................................12 14 15 16 17 18 19 20 21 22 23 24 25 26 i OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 2 Table of Authorities 3 4 Cases 5 Arias v. Superior Court (2009) 46 Cal.4th 969 ........................................................................... 9 6 Baltazar v. Forever 21, Inc., 62 Cal.4th 1237, 1244 (2016) ...................................................... 10 7 Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439....................................... 3, 6 8 Collie v. Icee Company (2020) 52 Cal.App.5th 477 ................................................................ 2, 5 9 Correia v. N.B. Baker Electric, Inc. (2019) 32 Cal.App.5th 602 ........................................ 2, 6, 9 10 Fitzhugh v. Granada Healthcare & Rehabilitation Center, LLC (2007) 150 Cal.App.4th 469 .. 5 11 Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 ............................. 7, 9 12 13 Julian v. Glenair, Inc. (2017) 17 Cal.App.5th 853 ...................................................................... 3 14 Magno v. The College Network, Inc., 1 Cal.App.5th 277, 284-285 (2016) ............................... 10 15 Melendez v. San Francisco Baseball Associates, LLC (2019) 7 Cal.5th 1 .................................. 8 16 OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111 .................................................................................. 11 17 Provost v. Yourmechanic, Inc. (Oct. 15, 2020) __ Cal.Rptr.3d ___, WL 6074632 ................. 2, 5 18 Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419 ................................. 5 19 Tanguilig v. Bloomingdales, Inc. (2016) 5 Cal.App.5th 665 ................................................... 3, 6 20 Vasserman v. Henry Mayo Newhall Memorial Hospital (C.D. Cal. 2014) 65 F.Supp.3d 932 .... 9 21 22 Wright v. Universal Maritime Service Corp. (1998) 525 U.S. 70 ............................................... 8 23 ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175 .................................................................... 6, 7 24 Statutes 25 Labor Code § 2699.3.................................................................................................................... 6 26 ii OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 PAGA.................................................................................................................................. passim 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 iii OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 OPPOSITION TO AMENDED PETITION TO COMPEL ARBITRATION 2 3 Plaintiff Jaclyn Keunzinger (“Keunzinger”) hereby submits her response to the 4 allegations set forth in Defendant’s unverified Amended Petition to Compel Arbitration, and 5 responds thereto as follows: 6 Plaintiff generally denies all allegations set forth in the Amended Petition. 7 Plaintiff opposes the Amended Petition to Compel Arbitration on the following 8 grounds, as set forth in greater detail in the accompanying Memorandum of Points and 9 Authorities in Support: 10 1. Plaintiff’s PAGA claims cannot be compelled to private arbitration as a matter of 11 law nor do the two arbitration provisions relied on by Defendant (the CBA and Fair 12 Treatment Process) apply; and 13 2. The Fair Treatment Process agreement is unenforceable because it contains a high 14 degree of both procedural and substantive unconscionability; 15 Plaintiff’s opposition is based on this opposition, the memorandum of points and 16 authorities in support of same, on the Declaration of Vladimir J. Kozina filed concurrently 17 herewith, on the complete files and records of this action, and on such further oral and/or 18 documentary evidence as may be presented at the hearing on this petition. 19 DATED: October 26, 2020 MAYALL HURLEY P.C. 20 21 By /s/ Vladimir J. Kozina ______ 22 WILLIAM J. GORHAM III 23 VLADIMIR J. KOZINA Attorneys for Plaintiff, 24 JACLYN KUENZINGER 25 26 1 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 4 Defendant Doctor’s Medical Center Modesto, Inc. (“DMC” or “Defendant”) in its 5 continued, desperate quest to force Plaintiff Jaclyn Keunzinger (“Kuenzinger” or “Plaintiff”) to 6 arbitrate PAGA claims that every single California case to pass on the issue has held cannot be arbitrated as a matter of law, presents an Amended Petition to Compel Arbitration 7 (“Amended Petition”) to “allege new facts and circumstances” arising since the filing of its 8 original petition. (Amended Petition, pg. 1, line 23.) DMC seeks to compel Plaintiff’s PAGA- 9 only claims to arbitration on the basis of two pre-dispute arbitration agreements, one contained 10 in a collective bargaining agreement (“CBA”), the other contained in a document referred to by 11 Defendant as the “Fair Treatment Process” (“FTP”). 12 There is a substantial, uniform body of published California authority holding that a 13 pre-dispute arbitration agreement cannot be the basis for forced arbitration of PAGA claims. 14 Those cases include: 15 1. Collie v. Icee Company (2020) 52 Cal.App.5th 477, 483 (“In sum, the court 16 properly denied Icee’s motion to compel arbitration of Collie’s PAGA action. The 17 state—the real party in interest—is not bound by Collie’s predispute agreement to 18 arbitrate.”); 19 2. Provost v. Yourmechanic, Inc. (Oct. 15, 2020) __ Cal.Rptr.3d ___, WL 6074632, *7 20 (“It would defy logic to require Provost to arbitrate the issue of whether he was an 21 independent contractor or employee for purposes of section 226.8, when he and 22 others similarly situated to him are only able to obtain any relief under this statute 23 in a nonarbitrable PAGA action.” Emphasis in original.); 24 3. Correia v. N.B. Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 622 (“Without the 25 state's consent, a predispute agreement between an employee and an employer 26 2 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 cannot be the basis for compelling arbitration of a representative PAGA claim 2 because the state is the owner of the claim and the real party in interest, and the 3 state was not a party to the arbitration agreement.”); 4 4. Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439, 448 (“In this 5 PAGA action, Betancourt is suing on behalf of the state. Prudential cannot rely on 6 the predispute agreement with Betancourt to compel arbitration. Therefore, while a 7 PAGA action might be subject to arbitration, relying on a predispute agreement 8 with a private party will not suffice to compel arbitration of a PAGA claim.”); 9 5. Julian v. Glenair, Inc. (2017) 17 Cal.App.5th 853, 872 (“[A]n arbitration agreement 10 executed before an employee meets the statutory requirements for commencing a 11 PAGA action does not encompass that action. Prior to satisfying those 12 requirements, an employee enters into the agreement as an individual, rather than as 13 an agent or representative of the state. As an individual, the employee is not authorized to assert a PAGA claim; the state—through LWDA—retains control of 14 the right underlying any PAGA claim by the employee. Thus, such a predispute 15 agreement does not subject the PAGA claim to arbitration.”); and 16 6. Tanguilig v. Bloomingdales, Inc. (2016) 5 Cal.App.5th 665, 677 (“a PAGA 17 plaintiff's request for civil penalties on behalf of himself or herself is not subject to 18 arbitration under a private arbitration agreement between the plaintiff and his or her 19 employer.”). 20 Because the FTP and CBA constitute pre-dispute agreements (i.e., they were entered into 21 before Plaintiff obtained standing to act as proxy for the LWDA), they cannot be invoked to 22 force Plaintiff’s PAGA claim into arbitration. 23 24 25 26 3 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 Second, as will be explained in greater detail below, the FTP expressly excludes PAGA 2 claims from its reach and the language of the CBA likewise does not require arbitration of 3 these PAGA claims. 4 Finally, the FTP is unenforceable because it is unconscionable. The FTP is a contract 5 of adhesion whose terms can be altered without the consent of or notice to the employee. 6 Defendant has sought to arbitrarily modify those terms during this litigation. For example, the 7 FTP excludes PAGA claims, but Defendant is petitioning to have PAGA claims arbitrated. 8 The FTP also provides that claims presented to an administrative agency and which have not 9 been filed with a court are excluded from arbitration, yet upon receiving notice of Plaintiff’s 10 LWDA notice and DFEH complaint, Defendant filed a demand for arbitration of those claims 11 with AAA. Because of the completely arbitrary means by which Defendant has implemented 12 the FTP, the agreement shocks the conscience and is unenforceable. 13 For these reasons, Defendant’s Petition should be denied, and Plaintiff respectfully requests that the Court additionally find Defendant’s FTP to be unenforceable on the grounds 14 of unconscionability. 15 II. STATEMENT OF FACTS 16 Plaintiff filed her Complaint against Defendant on June 26, 2020, alleging a single 17 cause of action for civil penalties pursuant to the PAGA. The Complaint seeks no individual 18 relief, only civil penalties pursuant to the PAGA. The first paragraph of the First Amended 19 Complaint states, “This is a representative action for penalties pursuant to the Labor Code 20 Private Attorneys General Act of 2004...” (Complaint). In her prayer for relief Plaintiff seeks 21 only remedies available pursuant to the PAGA, namely civil penalties, attorneys’ fees and 22 recoverable costs, and any interest on said penalties provided for by law. (Complaint, Prayer 23 for Relief.) 24 25 26 4 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 Prior to initiating this PAGA-only action, Plaintiff filed a notice with the LWDA 2 regarding the alleged Labor Code violations. According to the language of the FTP, claims 3 submitted to administrative agencies need not be submitted to arbitration unless and until the 4 employee moves forward with a civil action. Nonetheless, shortly after Plaintiff filed her 5 LWDA notice, but before Plaintiff even had standing to bring a PAGA claim, Defendant 6 initiated arbitration with AAA, claiming that it was “laughable” and “irrelevant” that Plaintiff 7 had not yet chosen to pursue a civil action because Defendant “has decided that [it] wants 8 [Plaintiff’s] claims arbitrated.” Kozina Decl., Exs. A, D. Similarly, Defendant amended its 9 arbitration demand to include claims set forth in a complaint Plaintiff filed with the 10 Department of Fair Employment and Housing (“DFEH”). Kozina Decl., Ex. B. 11 Defendant was served with Plaintiff’s PAGA-only Complaint on June 26, 2020. In 12 response Defendant filed its original petition on August 21, 2020. Almost three weeks after 13 Plaintiff filed her opposition on August 28, 2020, on September 15, 2020, Defendant filed a Second Amendment to Demand for Arbitration with the AAA, purporting to include Plaintiff’s 14 PAGA claim within the arbitration proceeding. Kozina Decl., Ex. E. 15 III. LAW AND ARGUMENT 16 17 A. Plaintiff Cannot Be Compelled to Arbitrate PAGA Claims Based on Any Pre- Dispute Agreement, Whether the CBA or the FTP. 18 A petition to compel arbitration must be denied when the arbitration agreement is 19 unenforceable or the claim is not subject to the arbitration agreement. Robertson v. Health Net 20 of California, Inc. (2005) 132 Cal.App.4th 1419, 1425, 34 Cal.Rptr.3d 547; Fitzhugh v. 21 Granada Healthcare & Rehabilitation Center, LLC (2007) 150 Cal.App.4th 469, 474. 22 California law is abundantly clear that PAGA claims cannot be compelled to arbitration 23 based on a pre-dispute arbitration agreement signed by the employee. Indeed, every California 24 court to have considered the issue has come to the same conclusion. See, Collie, supra, 52 25 Cal.App.5th at 483; Provost v. Yourmechanic, Inc., supra, (Oct. 15, 2020) __ Cal.Rptr.3d ___, 26 5 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 2020 WL 6074632, *7; Correia v. N.B. Baker Electric, Inc. (2019) 32 Cal.App.5th at 622; 2 Betancourt, supra, 9 Cal.App.5th at 448; Julian, supra, 17 Cal.App.5th at 872; Tanguilig, 3 supra 5 Cal.App.5th at 677. In each of these cases, California courts have held that pre-dispute 4 arbitration agreements (i.e., agreements executed before the plaintiff has exhausted 5 administrative remedies under the PAGA and is empowered to act as proxy for the LWDA) 6 cannot be used as the basis to compel arbitration. 7 Here, the FTP was purportedly executed on June 17, 2019 (i.e., her date of hire). 8 (Amended Petition, Exhibit 2, pg. 4.) The CBA’s effective date was July 1, 2017. (Amended 9 Petition, Exhibit 1, Cover Page.) Plaintiff did not gain standing to bring PAGA claims until 65 10 days after she provided written notice to the Labor and Workforce Development Agency 11 (“LWDA”) and Defendant of the alleged Labor Code violations. This notice was provided on 12 April 20, 2020. Complaint, Ex. 1; Labor Code § 2699.3. Accordingly, both the FTP and CBA 13 predate Plaintiff’s exhaustion of the statutory requirements for commencing a PAGA action, and her PAGA claims cannot be compelled to arbitration under either agreement. 14 Undeterred by settled California law or the facts, Defendant boldly and ironically 15 proclaims that any contention that Plaintiff’s PAGA claims cannot be forced into arbitration 16 “would be an outdated and gross misstatement of the law.” (Amended Petition, 19:24-25.) 17 Defendant supports this contention with nonbinding and inapposite Ninth Circuit authority; to 18 the flat misstatement that the FTP does not preclude arbitration of PAGA claims (as set forth 19 below, it unequivocally does); and with a claim that the decision in ZB, N.A. v. Superior Court 20 (2019) 8 Cal.5th 175 somehow invalidates appellate opinions decided both before and after 21 that decision. The Supreme Court in ZB, N.A. was not concerned with whether a PAGA claim 22 could be compelled to arbitration generally. Rather, the Court decided the narrow issue of 23 “whether an employer may compel arbitration of an employee’s PAGA claim requesting 24 unpaid wages under section 558.” Id. at 184. Indeed, the only issue before the court was a 25 26 6 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 motion “to compel Lawson to individually arbitrate ‘her claim for victim-specific relief under 2 Labor Code § 558’ and stay the civil action.” Id. at 183. The Supreme Court ultimately held 3 that the motion to compel was properly denied because the underpaid wage portion of Labor 4 Code section 558 was not collectible under PAGA, nor did it permit a private right of action by 5 the employee. Id. at 198. Nowhere in the opinion did the Supreme Court address whether 6 claims for penalties that are available under PAGA could be compelled to arbitration based on 7 a pre-dispute agreement, and every single published California case both before and since has 8 held they cannot. Accordingly, the Court must deny this Amended Petition. 9 B. Neither the FAA nor the LMRA Dictate a Different Result. 10 The FAA does not require arbitration of PAGA claims. Indeed, the California Supreme 11 Court has held that a PAGA claim is not subject to the FAA. A PAGA claim “lies outside of 12 the FAA’s coverage because it is not a dispute between an employer and an employee arising 13 out of their contractual relationship. It is a dispute between an employer and the state…” Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 386-3871. In 14 Iskanian, the Supreme Court held that because a PAGA dispute is fundamentally between the 15 state and the employer, the FAA is simply not implicated in a PAGA claim. 16 For the same reason that Plaintiff’s PAGA claim lies outside of the coverage of the 17 FAA, Plaintiff’s PAGA claims are not subject to the LMRA and therefore cannot be compelled 18 to arbitration on that basis. Plaintiff’s PAGA claim is a dispute between the employer and the 19 state, not a dispute between a CBA-covered employee and her employer, and like the FAA, the 20 LMRA, which governs simply is not implicated. Iskanian, supra, 5 Cal.4th at 386-387. 21 22 23 24 1 A petition to arbitrate pursuant to the FAA may be made only to a federal district court and can be granted only where the district court would have independent subject matter jurisdiction. 9 U.S.C. § 4; Vaden v. Discover 25 Bank (2009) 556 U.S. 49, 62. Not only is there no basis for federal jurisdiction here, Defendant is asking the wrong court for relief under the FAA. 26 7 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 Even if Plaintiff’s PAGA claim could be characterized as a dispute between an 2 employee and employer (which it is not), where a plaintiff’s claims arise from independent 3 state law and do not require interpretation of provisions of a collective bargaining agreement, 4 the LMRA does not preempt state law. Melendez v. San Francisco Baseball Associates, LLC 5 (2019) 7 Cal.5th 1, 10. Plaintiff’s PAGA claims for violations of California’s meal break 6 requirements, California’s suitable seating requirement, and California’s wage statement 7 requirements do not turn on the interpretation of a CBA, but solely on the minimum 8 requirements set by California law. Further, the CBA does not provide any unique take on 9 meal and rest breaks other than stating it will comply with applicable Wage Orders (Amended 10 Petition, Exhibit 1, pg. 33), is silent as to any suitable seating provisions, and is similarly silent 11 with respect to the content of wage statements except, again, to state that California law 12 applies. (Amended Petition, Exhibit 1, pg. 48, “The Facility will comply with its obligations 13 under state law regarding paycheck stubs.”) As such, none of Plaintiff’s claims rely on an interpretation of the CBA and the LMRA is of no effect here. 14 15 C. The CBA Does Not Require Arbitration of PAGA Claims, and the FTP Expressly Excludes PAGA Claims. 16 Plaintiff’s PAGA claims cannot be compelled to arbitration under the CBA because, 17 first, Plaintiff’s PAGA action is an action between the state and the employer—the state is not 18 a party to the CBA. Second, Plaintiff’s PAGA claims are unwaivable statutory claims that 19 Plaintiff is not required to arbitrate under the CBA. It is settled law that statutory claims are 20 not subject to mandatory arbitration unless the arbitration provisions contain a “clear and 21 unmistakable” waiver of the employee’s right to a judicial forum as to those claims. Wright v. 22 Universal Maritime Service Corp. (1998) 525 U.S. 70, 79-80. The arbitration provisions of the 23 CBA do not satisfy this requirement. Article 9 of the CBA, which serves as the basis for 24 Defendant’s claim that Plaintiff must submit her PAGA claim to the CBA’s arbitration 25 provision pursuant to the LMRA, defines a “grievance” as “a dispute as to the interpretation, 26 8 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 meaning, or application of a specific provision of this Agreement.” Petition, Exhibit 3, Page 2 27. Only such “grievances” must proceed by the arbitration procedure set forth therein. Id. 3 Such generic language does not indicate a “clear and unmistakable waiver” of an employee’s 4 right to a judicial forum because it does not directly reference the statutes at issue. Vasserman 5 v. Henry Mayo Newhall Memorial Hospital (C.D. Cal. 2014) 65 F.Supp.3d 932, 964. As in 6 Vasserman, “because the CBA expressly limits the application of the grievance procedure to 7 grievances relating to the CBA, it does not, by its terms, subject Plaintiff’s claims under state 8 law to said procedure.” Id. at 965. 9 As for the FTP, its express language precludes arbitration of PAGA claims. A PAGA 10 claim is representative by nature. Arias v. Superior Court (2009) 46 Cal.4th 969, 986; Correia, 11 supra, 32 Cal.App.5th at 625. However, the FTP prohibits arbitration of representative claims. 12 “The employee understands and agrees that to the extent permitted by law, his or her claim will 13 not be joined with any claim or dispute of another employee in a class, collective, representative or group action. Arbitration under the Fair Treatment Process is limited to 14 individual disputes, claims or controversies that a court of law would be authorized or have 15 jurisdiction over to grant relief.” (Petition, Exhibit 2, pg. 2. Emphasis supplied.) Because 16 representative actions are excluded from the FTP’s coverage, Defendant cannot now seek to 17 compel arbitration of Plaintiff’s PAGA claim. Further, as Defendant insists that Plaintiff 18 cannot maintain her PAGA claim in this Court (as has done by filing the instant Petition), the 19 FTP operates as an unlawful waiver of PAGA claims. Iskanian, supra, 5 Cal.4th at 383-385. 20 As discussed in detail below, this unlawful waiver forms just a portion of the unconscionability 21 that permeates the FTP as written and as applied. 22 D. The FTP Is both Procedurally and Substantively Unconscionable. 23 The contract defense of unconscionability has two elements: procedural 24 unconscionability and substantive unconscionability. Both must be present for a contract to be 25 26 9 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 invalidated on this ground. Magno v. The College Network, Inc., 1 Cal.App.5th 277, 284-285 2 (2016). Procedural and substantive unconscionability are evaluated on a “sliding scale”; the 3 more substantively oppressive a contract term, the less evidence of procedural unconscionability 4 need be shown, and vice versa. Id., at 285. The Fair Treatment Process Agreement is both 5 procedurally and substantively unconscionable such that it cannot be enforced as to any claim 6 that might be asserted by Plaintiff. 7 1. Procedural Unconscionability 8 The FTP is a contract of adhesion that all employees of Defendant must agree to. See 9 Exhibit 2, pg. 1 “The FTP applies to all employees, regardless of length of service or status…” 10 It does not provide for employees to opt-out of the agreement or in any other way indicate that 11 an employee has the option of working for Defendant without signing the FTP. The agreement 12 also provides that Defendant may make modifications to the FTP “without notifying and 13 obtaining the consent of the employees to such changes” and that the employee’s decision to continue working for Defendant will be considered “implied consent” to the changes, even 14 where the employees are not notified of those changes. (Petition, Ex. 2, pg. 3.) Ordinary 15 contracts of adhesion “contain a degree of procedural unconscionability even without any 16 notable surprises, and ‘bear within them the clear danger of oppression and overreaching.’” 17 Baltazar v. Forever 21, Inc., 62 Cal.4th 1237, 1244 (2016). In the context of employment 18 arbitration agreements, courts pay close attention to the danger of oppression and overreaching, 19 given the economic pressure exerted by employers on all but the most sought-after employees. 20 Ibid. Because of the lack of choice on the part of the employee and the potential for surprise 21 changes to its material terms, the FTP possesses a very high degree of procedural 22 unconscionability. 23 /// 24 25 26 10 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 2. Substantive Unconscionability 2 The FTP is also substantively unconscionable both as written and as Defendant has 3 attempted to apply the FTP to Plaintiff. Substantive unconscionability arises from terms that, 4 among other things, “undermine the nondrafting party’s reasonable expectations.” OTO, L.L.C. 5 v. Kho (2019) 8 Cal.5th 111, 130. Further “[s]ubstantive terms that, in the abstract, might not 6 support an unconscionability finding take on greater weight when imposed by a procedure that 7 is demonstrably oppressive.” Ibid. Several aspects of the FTP, as Defendant has applied it, 8 create substantial substantive unconscionability because, as will be seen, Defendant has 9 repeatedly taken the position that the explicit wording of the FTP agreement arbitrarily has no 10 meaning. 11 First, as set forth in Section III.B above, the FTP precludes arbitration of PAGA claims, 12 yet Defendant seeks to compel arbitration of this PAGA claim, and now claims to be able to 13 cast aside the written prohibition on the arbitration of representative claims in the FTP. Thus, either Defendant is attempting to employ the FTP to effectuate an unlawful waiver of Plaintiff’s 14 right to bring a PAGA claim at all, or Defendant is arbitrarily disregarding material provisions 15 of its own agreement. Both situations are clear evidence of substantive unconscionability. 16 Second, the FTP purports not to require employees to initiate arbitration as to statutory 17 claims that have been presented to an administrative agency but where a civil action has not yet 18 been initiated: 19 Certain issues may not be submitted for review (or exclusive review) under the FTP…. 20 any non-waivable statutory claims, which may include claims within the jurisdiction of the National Labor Relations Board, wage claims within the jurisdiction of a local or 21 state labor commissioner, or administrative agency charges before the Equal Employment Opportunity Commission or similar local or state agencies, are not subject 22 to exclusive review under the FTP. This means that employees may file such non- waivable statutory claims with the appropriate agency that has jurisdiction over 23 them if they wish, regardless of whether they decide to use the FTP to resolve them. 24 Petition, Ex. 2, pg. 2 (emphasis added). However, immediately after Plaintiff served Defendant 25 with a copy of her PAGA Notice to the LWDA (i.e., an appropriate agency with jurisdiction 26 11 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 over Plaintiff’s Labor Code claims), Defendant submitted a demand for arbitration to the AAA 2 seeking “declaratory relief” that, among other things, it had not committed the Labor Code 3 violations alleged in Plaintiff’s PAGA notice. (Kozina Decl., Ex. A.) 4 After Plaintiff filed a complaint with the DFEH and obtained a right to sue letter, but 5 again before she attempted or sought to file a civil action based on those claims, Defendant 6 amended its arbitration demand to include the FEHA claims, again seeking “declaratory relief” 7 that it did not violate the law. (Kozina Decl., Ex. B) Defendant’s justification for flaunting the 8 terms of the agreement that it wrote and required Plaintiff to execute as a condition of 9 employment was that the clause excluding her administratively filed claims from arbitration was 10 “Laughable (and Irrelevant)” because “Respondent [Defendant] has the absolute right to bring 11 the claims and issues raised by Claimant [Plaintiff] to the AAA for resolution. Whether 12 Claimant has supposedly not yet decided whether she wants to pursue claims is irrelevant 13 because Respondent has decided that Respondent wants Claimant’s claims adjudicated.” (Kozina Decl., Ex. D, pg. 3. Emphasis supplied.) In other words, Defendant again chose to 14 arbitrarily disregard terms of the agreement in its own favor. 15 The combination of a lack of meaningful choice with respect to entering into the FTP; 16 lack of necessary notice of changes to the material terms of the FTP; an unlawful PAGA 17 waiver; and Defendant’s arbitrary and capricious conduct in disregarding the express language 18 of the FTP itself demonstrates that the FTP is so unconscionable as to be unenforceable. 19 IV. CONCLUSION 20 For the foregoing reasons, the Court should deny Defendant’s Petition in its entirety and 21 find that the FTP is unenforceable on grounds of unconscionability. 22 /// 23 /// 24 25 26 12 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 1 DATED: October 26, 2020 MAYALL HURLEY P.C. 2 3 4 By /s/ Vladimir J. Kozina WILLIAM J. GORHAM III 5 VLADIMIR J. KOZINA Attorneys for Plaintiff, 6 JACLYN KUENZINGER 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 13 OPPOSITION TO PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF 27 POINTS AND AUTHORITIES IN SUPPORT 28 Kuenzinger v. Doctors Medical Center Modesto, Inc., et al. Stanislaus County Superior Court Case No.: CV-20-002799 1 PROOF OF SERVICE 2 I, the undersigned, certify and declare as follows: 3 I am over the age of eighteen years and not a party to this action. My business address is 2453 Grand Canal Boulevard, Stockton, California 95207 that is located in the county where the mailing and/or 4 delivery below took place. 5 On October 26, 2020, I served the following document: 6 OPPOSITION TO DEFENDANT’S AMENDED PETITION TO COMPEL ARBITRATION AND STAY ACTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 7 addressed to: 8 9 Michael S. Turner E. Sean McLoughlin 10 Warren J. Higgins Hill, Farrer & Burrill LLP 11 One California Plaza 12 300 S. Grand Avenue, 37th Floor Los Angeles, CA 90071 13 Email: mturner@hillfarrer.com; smcloughlin@hillfarrer.com; whiggins@hillfarrer.com 14 Attorneys for Defendants 15  BY ELECTRONIC SERVICE THROUGH ONE LEGAL: I caused the above-listed document to be sent to the person[s] at the e-mail address[es] listed above to be electronically served through One 16 Legal. After completion of submission of the above-mentioned document to One Legal, I received email confirmation that the above document had been e-served to the addressees listed above. Said 17 One Legal confirmation will remain with the original copy of the above-mentioned document. 18 I certify and declare under penalty of perjury under the laws of the State of California that the 19 foregoing is true and correct. 20 Executed on October 26, 2020, at Lodi, California. 21 /s/ Julie Zeyen 22