United States District Court, N.D. California
ORDER GRANTING DEFENDANT’S MOTION TO COMPEL
ARBITRATION AND STAY PROCEEDINGS DOCKET NO. 24
M. CHEN UNITED STATES DISTRICT JUDGE.
Ron Caviani filed suit in Alameda County superior court
alleging various FEHA discrimination claims. Defendant Mentor
Graphics removed to federal court. Docket No. 1. The parties
exchanged multiple meet-and-confer correspondences regarding
the enforceability of an arbitration agreement. Pending
before the Court is Defendant’s motion to compel
arbitration and to stay proceedings (“Mot.”).
Docket No. 24.
parties do not dispute most facts. Defendant extended an
offer of employment to Plaintiff on June 18, 2008; he signed
the following day. Mot. at 2; Opp. at 4. Plaintiff began
working on June 26, 2008, and he signed the at-issue
arbitration agreement (“Agreement”) on June 30,
2008. Mot. at 2; Opp. at 4. The Agreement is one page, and
its “Final and Binding Arbitration” clause reads
All Disputes shall be submitted to and resolved by final and
binding arbitration. The arbitration will be conducted under
the rules and procedures of JAMS (formerly known as Judicial
Arbitration & Mediation Services, Inc.) or its successor,
before a mutually agreed upon neutral arbitrator selected in
accordance with the JAMS Employment Arbitration Rules or
their equivalent. Mentor Graphics will pay any required
arbitrator’s fees. Each party will be responsible for
its own attorney’s fees and other costs, fees and
disbursements incurred. The arbitration will be held in the
state and county in which you are/were employed.
of Sandy Bradshaw in Support of Defendant’s Motion to
Compel Arbitration (“Bradshaw Decl.”), Ex. D.
parties dispute whether Defendant included the Agreement with
the initial offer letter. Reply at 6; Opp. at 6. The parties
also dispute the characterization of Plaintiff’s
transition into a new role with Defendant in 2012 when he
received a promotion from inside sales representative to
territory account manager. Defendant contends it was an
internal transfer that maintained the parties’
preexisting employment relationship and agreement to
arbitrate all claims. Mot. at 4. Plaintiff argues it was an
entirely new employment offer in which Defendant did not
provide a new agreement to arbitrate. Opp. at 4. Plaintiff
never signed the 2012 letter; Defendant does not dispute
this. Id. Defendant terminated Plaintiff in 2017.
Defendant brought this motion to compel arbitration.
agreements are “valid, irrevocable, and
enforceable” under the Federal Arbitration Act. 9
U.S.C. § 2. Section 2, however, “permits
arbitration agreements to be declared unenforceable
‘upon such grounds as exist at law or in equity for the
revocation of any contract.’ This saving clause permits
agreements to arbitrate to 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, 563 U.S. 333,
339–40 (2011) (quoting Doctor's Associates,
Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). “By
its terms, the [FAA] leaves no place for the exercise of
discretion by a district court, but instead mandates that
district courts shall direct the parties to proceed to
arbitration.” Dean Witter Reynolds, Inc. v.
Byrd, 470 U.S. 213, 218 (1985). Plaintiff bears the
burden of showing that an arbitration agreement should not be
enforced. Green Tree Fin. Corp.-Ala. v. Randolph,
531 U.S. 79, 91 (2000).
California law, for a party to claim a contract is
unconscionable, it must show that it is both procedurally and
substantively unconscionable. Dalton v. J. Mann
Inc., 2016 WL 5909710, at *3 (N.D. Cal. Oct. 11, 2016).
“A sliding scale is applied so that the more
substantively oppressive the contract term, the less evidence
of procedural unconscionability is required to come to the
conclusion that the term is unenforceable, and vice
versa.” Serafin v. Balco Props. Ltd., LLC, 235
Cal.App.4th 165, 178 (2015). When evaluating procedural
unconscionability, courts focus on oppression or surprise
that results from unequal bargaining power; while evaluating
substantive unconscionability, courts are more concerned with
overly harsh or one-sided results. Sonic-Calabasas A,
Inc. v. Moreno, 57 Cal.4th 1109, 1133 (2013).
challenges enforcement in three ways: (1) Plaintiff contends
there is no valid Agreement because of formation defects; (2)
the Agreement is substantively unconscionable; and (3) the
Agreement is procedurally unconscionable. Defendant responds
by arguing that it has demonstrated the existence of an
arbitration agreement by a preponderance of the evidence, and
that the parties clearly and unmistakably delegated
arbitrability of the Agreement to the arbitrator.
Formation of Arbitration Agreement
makes two formation arguments. First, he contends he did not
agree to arbitrate his claims because at the time he signed
his offer of employment, it did not contain the Agreement,
despite the offer expressly stating that employment was
conditioned on signing the Agreement. Opp. at 6. More
specifically, he signed the employment offer on June 19,
2008, began working for Defendant on June 26, 2008, but
signed the Agreement to arbitrate all claims on June 30,
2008-which is Plaintiff’s way of saying he did not
agree to arbitration at the time he formed an
employment relationship with Defendant.
Plaintiff’s second argument against formation relates
to his 2012 promotion, which did not come with a new
arbitration agreement. Plaintiff contends that this new job
offer required a separate arbitration ...