ORIGINAL PROCEEDING; application for writ of mandate. Soussan G. Bruguera, Judge. Petition denied. (Super. Ct. No. BC377639).
The opinion of the court was delivered by: Perluss, P. J.
CERTIFIED FOR PUBLICATION
An application for employment contains an arbitration clause providing, "I agree, in the event I am hired by the company, that all disputes and claims that might arise out of my employment with the company will be submitted to binding arbitration." Is the arbitration agreement one-sided, obligating the applicant-employee (if she is hired) to arbitrate her claims without imposing a reciprocal requirement on the employer in connection with its claims against the employee?
In her petition for writ of mandate challenging the trial court's order compelling arbitration of her discrimination and wrongful termination claims against her employer, Flo-Kem, Inc., under the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.), Gabriela Roman contends this "I agree" language manifests only a unilateral obligation to arbitrate. When the adhesive nature of the contract is also taken into account, Roman asserts the agreement to arbitrate is procedurally and substantively unconscionable and, therefore, unenforceable.
The trial court properly granted Flo-Kem's petition to compel arbitration. Absent some indicia in the agreement that arbitration is limited to the employee's claims against the employer, the use of the "I agree" language in an arbitration clause that expressly covers "all disputes" creates a mutual agreement to arbitrate all claims arising out of the applicant's employment. Accordingly, whatever elements of procedural unconscionability may be present in employment adhesion contracts, the agreement to arbitrate does not lack mutuality of obligation so as it make it substantively unconscionable.
FACTUAL AND PROCEDURAL BACKGROUND
Roman began working for Flo-Kem in 1997 as a receptionist; she was later promoted to the accounts receivable department. In February 2007 she was diagnosed with depression and placed on disability leave. Roman alleges she was unlawfully terminated later that year.
After filing a complaint with the Department of Fair Employment and Housing (DFEH) and receiving notice of a right to sue, in September 2007 Roman filed a complaint against Flo-Kem in the Los Angeles County Superior Court asserting statutory claims under FEHA for disability discrimination, failure to accommodate, failure to engage in a timely and good faith interactive process and retaliation and a common law claim for wrongful termination in violation of public policy. In November 2007 Flo-Kem demurred to the complaint without referring to the arbitration provision. Flo-Kem subsequently served a notice of deposition and request for production of documents on Roman, responded to Roman's requests for written discovery with objections only (no substantive responses) and moved to compel responses to the discovery it had served, all without raising the issue of arbitration.
In December 2007, before the hearings on the motion to compel and the demurrer, Flo-Kem petitioned the court to compel arbitration based on an arbitration provision in Roman's employment application, which she had signed just before her hire in November 1997.
The arbitration provision, contained in a separate paragraph initialed by Roman, provided, "I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by the company, that all disputes that cannot be resolved by informal internal resolution*fn1 which might arise out of my employment with the company, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules of the American Arbitration Association. This application contains the entire agreement between the parties with regard to dispute resolution, and there are no other agreements as to dispute resolution, either oral or written."
Roman opposed the petition to compel arbitration, arguing Flo-Kem had waived any right it may have had to arbitrate the dispute by engaging in discovery in the action.
In addition, she argued the arbitration agreement was unenforceable. In particular, Roman asserted the agreement was procedurally unconscionable because it was contained in a contract of adhesion and substantively unconscionable because it lacked mutuality of obligation, requiring her to arbitrate her claims without limiting Flo-Kem's right to a judicial forum. Roman also argued the arbitration agreement, which incorporated the rules of the American Arbitration Association (AAA), was substantively unconscionable in other respects because AAA rules in effect in 1997 were in conflict with the Supreme Court's articulation of minimum safeguards in Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83 (Armendariz).)
In its reply in support of its petition, Flo-Kem submitted a declaration from John Grimes, its chief operating officer. Grimes explained he began working at Flo-Kem in 2004; Roman's lawsuit was the first employment action (other than workers' compensation) since he began at the company; and, at the time Flo-Kem was served with the complaint, he was unaware of the arbitration provision in the employment applications. Flo-Kem also argued its delay in asserting its right to arbitrate was minimal and the discovery it had undertaken was not in any way inconsistent with proceeding by arbitration.
On July 8, 2008 the trial court granted Flo-Kem's petition to compel arbitration. Although the court agreed with Roman that the adhesive nature of the agreement created an element of procedural unconscionability, it rejected Roman's arguments concerning substantive unconscionability, finding the arbitration agreement required both Roman and Flo-Kem to arbitrate "all disputes" and, therefore, did not lack mutuality of obligation. In its written ruling the trial court did not address Flo-Kem's waiver argument.
On August 8, 2008 Roman filed a petition for writ of mandate challenging the trial court's order compelling arbitration. After requesting informal opposition to the petition, on November 13, 2008 we issued an order to show cause as to why the requested relief should not be granted. On December 2, 2008 Flo-Kem filed its return to the petition, and on December 15, 2008 Roman filed her reply.