Defendant MedXM Independent Physician Association Inc., MedXM MSO Inc. and Mobile Medical Examination Services LLC’s Motion to Compel Arbitration

In connection with his employment, Plaintiff signed an arbitration provision and an acknowledgment that he had agreed to arbitration.  Tran Dec. Exhibits A-E.  Defendant now moves for an order compelling arbitration of Plaintiff’s claims under that provision.

The arbitration provision governs “Any controversy, dispute or claim between any employee and the Company, or its officers, agents or other employees . . . [¶] includ[ing] but [] not limited to . . . claims for wages and other compensation, . . .  and claims for violation of any of the federal, state, or other government law, statute, regulation, or ordinance . . .”  Plaintiff’s complaint alleges claims which fall within the arbitration provision.

Plaintiff alleges that the provision cannot be enforced because it is both procedurally and substantively unconscionable.  He alleges it is procedurally unconscionable because he was told he had to sign the documents to accept/keep the job and he had to sign and return the documents immediately. He alleges that it is substantively unconscionable because: (i) it includes a PAGA waiver; (2) it eliminates review; (3) only Defendant can modify the policy; and (4) the costs of arbitration are to be shared.

Plaintiff’s declaration establishes a minor degree of procedural unconscionability.  Plaintiff believed he was required to sign the arbitration provisions as a condition of employment, was given only a few hours to review the terms, and had little to no bargaining power.  Martinez v. Master Protection Corp. (2004) 118 Cal.App.4th 107, 114.  Belying Plaintiff’s claim that he had “only a few hours to review the terms”, the court notes that he again signed an acknowledgment and agreement to arbitration 2 months after he began his employment on or about April 19, 2016 after he had had several months to reconsider the wisdom of agreeing to arbitration. Also, there was no unfair surprise. The provision was not hidden. Indeed, the employee’s attention is drawn to the existence of the arbitration provision on the very 1st page of the handbook containing the provision. The arbitration clause is not in small print, confusing or otherwise objectionable.  It is a separately identified provision in the same font as the rest of the handbook, takes up less than two pages and is clearly legible. In fact, portions of the provision (relating to the waiver of a judge or jury trial) are in bold block capital letters.

The minor degree of procedural unconscionability is not enough to make the arbitration provision unenforceable.

Plaintiff argues that the provision is substantively unconscionable because it includes the following language:

Employees and the Company may only bring claims against each other in their individual capacity and not as a class representative or class member in any purported class or representative proceeding.

Plaintiff interprets the language as a PAGA waiver. It is not, the language prohibits Plaintiff from acting as a class representative or class member . . .”  Even if the provision had included a PAGA waiver, the waiver would not have been enforceable and could be severed.

Plaintiff argues that the provision is substantively unconscionable because it limits review of the arbitrator’s determination: “The decision of the arbitrator shall be binding and conclusive on the parties and cannot be reviewed for error of law or legal reasoning of any kind.”  That language merely reiterates the general rule repeatedly recognized by California courts.  Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11 (“it is the general rule that, with narrow exceptions, an arbitrator’s decision cannot be reviewed for errors of fact or law.”)

Plaintiff argues that the provision is substantively unconscionable because it can only be amended, modified, rescinded, deleted or supplemented by Defendant.  An arbitration provision that can only be modified by the employer is not substantively unconscionable.  Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 706 (“Thus, it has long been the rule that a provision in an agreement permitting one party to modify contract terms does not, standing alone, render a contract illusory because the party with that authority may not change the agreement in such a manner as to frustrate the purpose of the contract.”)  See also 24 Hour Fitness v. Superior Court (1998) 66 Cal.App.4th 1199, 1214.

Finally, Plaintiff complains of the cost sharing language:

The parties shall each bear their own costs and attorneys’ fees in any arbitration proceeding. The cost of arbitrator and court reporter, if any, shall be shared equally by both parties, or as determined by the arbitrator.

An employer may not “require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court”. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 110-111.  That language is hereby severed from the arbitration agreement.  As a result, the agreement is not substantively unconscionable and is, therefore, enforceable.

Defendant’s motion to compel arbitration is granted.  This action is stayed pending arbitration.