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Tamara Morgan v. Xerox Corporation

May 15, 2013



This matter is before the court on Defendant's "motion to compel arbitration and dismiss, or in the alternative, to stay proceedings pending arbitration." (Def.'s Mot. to Compel Arbitration, ECF 7-1.) Plaintiff opposes the motion. (Pl.'s Opp'n, ECF 9.) For the reasons set forth below, Defendant's motion is GRANTED.*fn1


Plaintiff brings one claim for "wrongful termination in violation of public policy," alleging that she was wrongfully retaliated against "for simply informing her employer of her good faith belief that false claims were being submitted by her employer to the State of California in the role a fiduciary intermediary for Medi-Cal payments to providers." (Def.'s Notice of Removal, ECF 1, Ex. 1, ¶ 15.) Plaintiff seeks damages "the exact amount of which have not yet been fully ascertained . . . ." (Id. ¶ 16.)

Plaintiff does not dispute that, in accepting her application for employment with Defendant, she electronically signed and agreed to Defendant's Dispute Resolution Program ("DRP"),*fn2 "which provides [Defendant's] employees with a mandatory system for settling workplace conflicts, including conflicts arising out of the termination of employment." (ECF 7-1 at 2:9-12.) Specifically, the program "constitutes the exclusive and binding methods for [Defendant's] employees to resolve workplace disputes through the following options: Open Door, Internal Conference, Mediation, and Arbitration." (Decl. Of Jamie Son, ECF 7-2, ¶ 7.)*fn3

Plaintiff also does not dispute that the program is referenced in Defendant's employee guidebook. Finally, Plaintiff does not dispute that she electronically submitted and signed an acknowledgment of receipt and review of the employee guidebook. (See Id., Ex A-4.)


"[T]he federal law of arbitrability under the Federal Arbitration Act ("FAA") governs the allocation of authority between courts and arbitrators." Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008). Defendant's motion to compel arbitration concerns Section 2 of the FAA, whichs provides that:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. In deciding a motion to compel arbitration, "a court must determine: '(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.'" McLeod v. Ford Motor Co., 2005 WL 3763354, at *2 (C.D. Cal.) (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000), and citing Wagner v. Stratton Oakmont, Inc., 83 F.3d 1046, 1048-49 (9th Cir. 1996)).

There is an "emphatic federal policy in favor of arbitral dispute resolution." Mitsubishi Motors Corp. v. Soler Chrysler--Plymouth, 473 U.S. 614, 631 (1985). As such, "'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" Id. at 626 (quoting Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1 at 24--25 (1983)). "Because waiver of the right to arbitration is disfavored, 'any party arguing waiver of arbitration bears a heavy burden of proof.'" Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986) (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)). Therefore, an arbitration agreement may only "be invalidated by 'generally applicable contract defenses, such as fraud, duress, or unconscionability,' but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue." AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1748 (2011)(quoting Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681, 687, (1996)). Courts may not apply traditional contractual defenses, like duress and unconscionability, in a broader or more stringent manner to invalidate arbitration agreements and thereby undermine FAA's purpose to "ensur[e] that private arbitration agreements are enforced according to their terms." Id. at 1748 (quoting Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478(1989).


Through its motion, Defendant seeks to compel arbitration under the DRP. Should the court grant the motion to compel, Defendant also seeks to either "dismiss this action pursuant to [Federal Rule of Civil Procedure] 12(b)(1) for lack of subject matter jurisdiction and/or [Federal Rule of Civil Procedure] 12(b)(6) for failure to state a claim upon which relief can be granted or stay the action pending resolution of the arbitration." (ECF 7-1 at 11:7-16.)

Plaintiff does not argue that the agreement does not encompasses the dispute at issue; Plaintiff, instead, argues that the agreement was not valid because the electronic agreement governing the DRP is both procedurally and substantively unconscionable, and thus, Defendant's motion should be denied. Plaintiff also Argues that "California Contract law ...

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