Motion to Compel Arbitration (Judge Patrick Broderick)

25CV03889, Lucas v. CVS Pharmacy, Inc

Defendant CVS Pharmacy, Inc. (“Defendant” or “CVS”) moves pursuant to 9 U.S.C section 1, et seq. to compel arbitration of all of Plaintiff Ninel Lucas’s (“Plaintiff”) causes of action. Defendant Jaspal Johal joins in the motion. The motion is GRANTED.

Plaintiff’s complaint alleges causes of action for retaliation, wrongful termination, and failure to timely pay wages due upon separation. The action arises from Plaintiff’s employment with CVS. Plaintiff alleges it stems from an incident that occurred on February 8, 2025, when Plaintiff observed shoplifters at the CVS store she was working at. She took photos, called the police, filled out a CVS Pilferage Report, and then a full report. Plaintiff alleges that despite her continued good performance on the job, Defendant fired her for allegedly violating CVS policy with respect to reporting the shoplifting incident.

  1. Enforcing Arbitration

In determining the rights of parties to enforce an arbitration agreement within the FAA’s scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.) “(1) whether a valid agreement to arbitrate exists, and if it does, (2) whether that agreement encompasses the dispute at issue. If the response is affirmative on both counts, then the Act requires the court to enforce the arbitration agreement in accordance with its terms.” (Castro v. Macy’s, Inc. (N.D. Cal., Jan. 24, 2017, No. C 16-5991 CRB) 2017 WL 344978, at *2.) In California, “[g]eneral principles of contract law determine whether the parties have entered a binding agreement to arbitrate.” (Ibid.) Generally, an arbitration agreement must be memorialized in writing. (Ibid.)

The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability. (Ibid.)

  1.  Evidence of Arbitration Agreement – Declaration of Cierra Parker

The proposed arbitration agreement at issue in this case was presented to Plaintiff through a training module on CVS’s Learning Management System and Database known as LEARNet. (Parker decl., ¶¶3, 7.) The training module was entitled “Arbitration of Workplace Legal Disputes. (Id., at ¶7, Exhibit 1.) It directed the employee to open up CVS’s policy guide entitled “CVS Health Colleague Guide to Arbitration.” (Ibid.) Thereafter, it required the employee to acknowledge she had read the CVS Health Policy, “Arbitration of Workplace Legal Disputes,” and understood that it applied to her. (Ibid.) The acknowledgement informed the employee that she may opt out for a limited time by mailing a written, signed, and dated letter to a specific address provided in the acknowledgment. (Ibid.) It informed the employee that she is obligated to go to arbitration instead of court to resolve legal claims covered by the policy. (Ibid.) It stated that by clicking the “Yes” button, the employee was creating an electronic signature that is legally binding. (Ibid.)

CVS maintains records of its employees’ participation in training courses on its LEARNet system. (Id., ¶3.) All CVS employees are required to use their unique log-in ID and personalized password when they log into the LEARNet system. (Id., ¶4.) Employees are required to change their personalized password every 90 days. (Ibid.) Passwords are not to be disclosed to other employees, and CVS does not maintain a record of employee passwords. (Ibid.) When employees use their log-in and password to access LEARNet training courses, the training course number, course name, status, and status dates are automatically populated into a document called the training transcript. (Id., ¶5.) LEARNet training courses are conducted via web-based training (“WBT”) modules. (Id., ¶6.) When an employee completes a WBT module, the “Status” column of the employee’s training transcript populates with the term “Finished – WBT.” (Ibid.) The date in the “Status Date” column of the training transcript indicates the date on which the employee successfully completed the requirements of the training module and/or completed the acknowledgment at the conclusion of the training module. (Ibid.)

CVS’s records show that Plaintiff completed the LEARNet training module “Arbitration of Workplace Legal Disputes” on October 21, 2014, and July 17, 2019. (Id., Exhibit 2.) The LEARNet module is evidence of Plaintiff’s agreement to arbitrate. Plaintiff did not opt out of the agreement. (Id., ¶14; Dunkerton decl., ¶¶4-6.)

  1.  Objections to Parker Declaration

Plaintiff objects to the Parker declaration and the attached exhibits on various grounds. The objections are numbered according to the paragraph in the declaration. Plaintiff’s objection to paragraphs 2, 3, 7, 8, 9, 13, and 14 are overruled. Plaintiff’s objections to paragraphs 10 through 12 are sustained.

Plaintiff objects to paragraph 3 of the Parker declaration, which states: “CVS maintains records of its employees’ participation in training courses administered by CVS using a Learning Management System and Database known as ‘LEARNet.’ I am familiar with LEARNet. I have completed many training modules on the LEARNet system, and in that sense, I have used it in the same manner as all other CVS employees.” (Parker decl., ¶3.) Plaintiff objects pursuant to Evidence Code sections 1271 and 1400 stating that references to LEARNet records without a proper custodian foundation are inadmissible.

Evidence code section 1271  provides: “Evidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered to prove the act, condition, or event if: [¶] (a) The writing was made in the regular course of a business; [¶] (b) The writing was made at or near the time of the act, condition, or event; [¶] (c) The custodian or other qualified witness testifies to its identity and the mode of its preparation; and [¶] (d) The sources of information and method and time of preparation were such as to indicate its  trustworthiness.”

Evidence Code section 1400 provides: “Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law.”

Here, Ms. Parker states that she is an Investigator in CVS’s Colleague Relations Department, a division of CVS Human Resources. (Parker decl., ¶1.) Her statement was made upon her review of corporate and personnel records that she states were made in the regular course of CVS’s business. (Ibid.) She explains the web-based training modules, how employees access the training modules using their own unique ID and password, and how records of the training are generated on the day employees take the training. (Id., at ¶¶3-6.) The declaration is sufficient to authenticate the LEARNet system and to find the business records admissible under Evidence Code section 1271.

With respect to Plaintiff’s objection to paragraphs 7 through 9, and 14 of the Parker declaration, Ms. Parker states she is an HR employee, she reviewed the business records, and she testifies to the arbitration policy roll-out and Plaintiff’s employment records. With respect to the objection to paragraph 7, Ms. Parker does not need to have been directly involved in that roll-out to be able to testify to it.

With respect to paragraphs 10 through 12, Ms. Parker is testifying to the content of a writing, which is inadmissible under Evidence Code section 1523 when the document is available. The document speaks for itself.

With respect to paragraph 13, while in some sense Ms. Parker is testifying to the content of a writing, she is also at the same time authenticating the record.

  1.  Objections to Dunkerton declaration

Plaintiff’s objections to the Dunkerton declaration are overruled. Ms. Dunkerton states that she is employed by CVS as a paralegal in its Legal Department, which makes her familiar with documents maintained in the ordinary course of business, and in the procedures for maintaining and logging records, including opt-out letters. (Dunkerton, ¶¶1-3, 5.) She describes CVS’s procedures and testifies that Plaintiff did not mail an opt-out letter. (Id., ¶5.)  Notably, Plaintiff does not claim that she opted out of the arbitration agreement.

  1. Remaining Objections

Plaintiff’s objections to the declaration of Leilani Jones, paragraph 4, is overruled. Plaintiff’s objections to the declaration of Leilani Jones, paragraph 5-11, are sustained.

Plaintiff’s objections to the declaration of Melanie St. Angelo are overruled.

  1. Arbitration Agreement

CVS argues that Plaintiff must be compelled to proceed to arbitration in accordance with the terms of the agreement.

  1.  Declaration of Robert Bailey

Robert Bailey, the Director for Talent Management, testifies to CVS’s arbitration agreement embodied in the document entitled Arbitration of Workplace Legal Disputes Policy. (Bailey decl., ¶¶5-7, Exhibits 1-3.)

  1.  Objections to Bailey Declaration

Plaintiff objects to portions of the Bailey declaration. The objections are numbered according to the paragraph in the declaration. Plaintiff’s objections to paragraphs 5 through 8 are overruled.

  1. Scope of Agreement

The arbitration policy agreement states that arbitration applies to “any and all legal claims, disputes or controversies that CVS Health may have, now or in the future, against an Employee or that an Employee may have, now or in the future, against CVS Health, its parents, subsidiaries, successors or affiliates, or one of its employees or agents, arising out of or related to the Employee’s employment with CVS Health or the termination of the Employee’s employment.” (Bailey decl., Exhibit 1, Procedures, ¶2.)

The agreement to arbitrate states that arbitration will be administered by the American Arbitration Association (“AAA”) in accordance with its rules. (Id., ¶4(c).)

  1. Plaintiff’s consent to arbitrate

Here, there is no agreement signed by Plaintiff acknowledging her consent to arbitrate her disputes with CVS. Thus, CVS relies upon consent implied in fact.

In Castro v. Macy’s, Inc. (N.D. Cal., Jan. 24, 2017, No. C 16-5991 CRB) 2017 WL 344978, Macy’s moved to compel arbitration of the complaint filed by its employee, Castro. The arbitration agreement was mailed to Castro along with an opt-out form. (Id., at *3.) Macy’s established that it had mailed the arbitration agreement and opt-out form by providing mailing lists with names and addresses. (Ibid.) Castro was listed as a recipient. (Ibid.) Castro denied receiving the arbitration agreement and opt-out form but acknowledged receiving Macy’s other mail. (Ibid.) Based upon the presumption of mail receipt, the court found that Castro received the arbitration agreement. (Ibid.) The court also found that Macy’s had demonstrated that Castro had not opted out such that Castro implicitly agreed to Macy’s arbitration policy by failing to affirmatively opt out. (Id., at p. *3-4.)

Similarly, here CVS has established that the circumstances between CVS and Plaintiff were such that Plaintiff was under a duty to act or be bound. Therefore, her silence or inactivity in opting out of the arbitration agreement constitutes her consent.

As CVS has established the existence of a valid arbitration agreement which covers the dispute at issue in this case, this court must enforce the arbitration agreement unless Plaintiff establishes a defense thereto.

  1. Plaintiff’s opposition

In opposition, Plaintiff argues that courts have rejected finding the existence of an arbitration agreement where it is referred to only in an employee handbook and the employee acknowledged receipt of the handbook. (See Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164; Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal.App.4th 1511.) Plaintiff did not merely receive a handbook containing an arbitration policy. Here, she was required to review a training module which expressly told her about CVS’s arbitration policy. She was required to review the arbitration agreement as shown by her completion of the training module. During that module, she received information about opting out of the arbitration agreement.

  1. Unconscionability

Plaintiff argues that even if CVS establishes the existence of an arbitration agreement, it is unenforceable due to its unconscionability.

  1.  AAA

Plaintiff argues that the policy is silent on critical fairness safeguards, leaving Plaintiff without assurance of adequate discovery, remedies, or fee protections.

The arbitration agreement uses the AAA’s rules. Plaintiff has not cited, and this court is not aware of, any case which holds that the AAA’s rules are unconscionable.

  1.  Contract of Adhesion

Plaintiff argues that the agreement is procedurally unconscionable because it is a contract of adhesion.

An arbitration agreement is not procedurally unconscionable when it allows for the signor to opt out. (Chalian v. CVS Pharmacy, Inc. (C.D. Cal., Oct. 17, 2017, No.CV1608979ABAGRX) 2017 WL 6940520, at *3.)

Plaintiff also argues that requiring her to mail a letter within 30 days to opt out was both unfair and unrealistic. No legal authority is provided in support of this position. The simple act of mailing of a letter does not appear to be an unreasonable manner in which to require an employee to opt out of an arbitration agreement.

  1. Johal’s Joinder

Plaintiff argues that defendant Johal lacks standing to enforce arbitration agreement.

A court may entertain a joinder where it requests binding relief on behalf of the joining party. (See Barak v. Quisenberry Law Firm (2006) 135 Cal.App.4th 654, 661-662; Commonwealth Energy Corp. v. Investor Data Exchange, Inc. (2003) 110 Cal.App.4th 26, 31, fn 3.)

Plaintiff’s complaint alleges that Johal was CVS’s district manager. The allegations against him arise out of the same set of facts and circumstances. The arbitration agreement encompasses any and all legal disputes involving CVS’s employees or agents arising out of or related to the Employee’s employment. Therefore, it also pertains to Plaintiff’s allegations against Johal.

  1. Stay

Plaintiff correctly argues that, if this motion is granted, this court should stay the action instead of dismissing it. (See CCP section 1281.4)

  1. Conclusion and Order

Defendant CVS’s motion to compel arbitration is GRANTED. This action is hereby STAYED pending resolution of arbitration.

CVS’s counsel is directed to submit a written order to the court consistent with this ruling and in compliance with Cal. Rules of Court, Rule 3.1312. ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­