Joseph v. Sea World LLC et al

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
STEVEN JOSEPH, an individual, on
behalf of himself and on behalf of all
persons similarly situated,
Plaintiff,
v.
SEA WORLD LLC, et al.,
Defendants.
Case No.: 24-cv-01937-AJB-SBC
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS’
MOTION TO COMPEL
ARBITRATION AND TO DISMISS
CLASS AND UCL CLAIMS
(Doc. No. 30)
Before 	the 	Court 	is 	Defendants 	Sea 	World 	LLC 	and 	Seaworld 	Parks 	&
Entertainment, Inc.’s (“Defendants”) motion to compel arbitration and to dismiss Plaintiff
Steven Joseph’s (“Plaintiff”) class and unfair competition law (“UCL”) claims. (Doc. No.
30.) For the reasons set forth below, the Court GRANTS Defendants’ motion to compel
Arbitration of Plaintiff’s individual claims, GRANTS Defendants’ motion to dismiss
Plaintiff’s class claims, and DENIES Defendants’ motion to dismiss Plaintiff’s UCL
claim.
I. 	BACKGROUND
Plaintiff, a former Security Officer and then Sergeant at Sesame Place San Diego,
brings this putative class action alleging Defendants violated various wage-and-hour laws
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with regard to hourly non-exempt employees who worked in California. (See generally
Doc. No. 1-3 at 5–51, Complaint “Compl.”) Upon his hiring,1 Plaintiff was onboarded by
Defendants in July 2022. (Doc. Nos. 30-1 at 5; 39 at 9.) As a part of the onboarding process,
Defendants assigned Plaintiff a unique employee identification number and presented
Plaintiff with the SeaWorld Parks & Entertainment Dispute Resolution Program Policy
(Doc. 	No. 	30-3 	at 	5–33, 	“DRP”),2 the 	Dispute 	Resolution 	Program 	Receipt 	and
Acknowledgment form (Doc. No. 30-3 at 34–36, “DRP Acknowledgment”), and the
Intellectual Property and Confidentiality Agreement (Doc. No. 39-2 at 3–8, “IPCA”),
among others. (See Doc. Nos. 30-1 at 6; 39 at 9; McCarty Decl. ¶ 6.)
The DRP lays out a three-tier dispute resolution process consisting of “Level 1 –
Local Management Review; Level 2 – Nonbinding Mediation (if the dispute is a covered
claim); and Level 3 – Binding Arbitration (if the dispute is a covered claim).” (DRP at 9.)
“Covered claims” are “claims relating to or arising out of the employment relationship that:
(A) the Company may have against an Employee, including breach of confidentiality
and/or (B) the Employee may have against the Company . . . where the Employee
alleges . . . illegal conduct on the part of the Company including, but not limited to, [inter
alia] . . . (8) Claims of violation of public policy[] and (9) Claims for unpaid wages under
the Fair Labor Standards Act or state law.” (DRP at 12.) “Excluded claims” include
“[c]laims 	that 	seek 	to 	establish, 	modify 	or 	object 	to 	the 	Company’s 	policies 	or
procedures . . . .” (Id.) With regard to Level 3, the DRP “constitutes a written agreement to
arbitrate pursuant to the Federal Arbitration Act, 9 U.S.C.A. Sections 1–14.” (DRP at 13.)
1 	The Court notes there is a discrepancy between hiring date cited by both Plaintiff’s and
Defendants’ briefing and the employment years stated in Plaintiff’s Complaint. (Compare Doc. No. 30-1
at 5 and Doc. No. 39 at 9 with Compl. ¶ 4 (“PLAINTIFF was employed by DEFENDANT in California
from February of 2021 to April of 2024 . . . .”).)
2 	Defendants attached two identical copies of the DRP to the instant motion. (Compare Doc. No.
30-3 at 5–33 with Doc. No. 30-3 at 5–33.) For clarity, the Court will cite to the latter, whose accuracy was
verified by Jason McCarty, Information Technology Direct of Back Office Systems for Defendants. (See
Doc. No. 30-3, Declaration of Jason McCarty, “McCarty Decl.”)
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Finally, the DRP lays out procedural rules for arbitration covering how to submit covered
claims, the selection of a qualified neutral arbitrator, the location and timing of the hearing,
discovery, evidence, applicable law, and more. (Id. at 18–25.)
On July 7, 2022, Plaintiff electronically signed the DRP Acknowledgment using
unique login credentials which authenticated his identity. (Doc. Nos. 30-1 at 6; 39 at 9;
McCarty Decl. ¶ 6; 	see also 	DRP Acknowledgment.) The DRP Acknowledgment
summarizes and links to the DRP, after which Plaintiff signed the following paragraph:
By my signature below, I acknowledge that I have received a copy of the
written document for the DRP. I further acknowledge that the DRP policy
constitutes a binding legal agreement between me and the Company, and that
I have read the policy and this acknowledgment carefully. I understand and
agree that by continuing my employment with the Company, I am agreeing as
a condition of my employment to abide by the DRP policy and procedures, to
submit all covered claims to the DRP, to waive all rights to a trial in court
before a judge or jury on such claims, and to accept an arbitrator’ s decision
as the final, binding, and exclusive determination of all covered claims. In
addition, I understand that the Company is also accepting and agreeing to be
bound by and to comply with the requirements and procedures of the DRP
policy. I further acknowledge that the DRP does not change the employment-
at-will relationship between me and the Company.
(DRP Acknowledgment at 35.) The executed DRP Acknowledgment was then stored on
Defendants’ document management software. (Doc. No. 30-1 at 6; McCarty Decl. ¶ 6.)
On September 16, 2024, Plaintiff initiated the instant action bringing nine causes of
action on behalf of himself and the putative class. (See Doc. No. 1-3 at 5–51, “Compl.”)
II. 	LEGAL STANDARD
The Federal Arbitration Act (“FAA”) applies to contracts “evidencing a transaction
involving commerce.” 9 U.S.C. § 2; Brennan v. Opus Bank, 796 F.3d 1125, 1129 (9th Cir.
2015). There is a “liberal federal policy favoring arbitration agreements, notwithstanding
any state substantive or procedural policies to the contrary.” Moses H. Cone Mem’l Hosp.
v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); see also AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 344 (2011) (“The overarching purpose of the FAA, evident in
the text of §§ 2, 3, and 4, is to ensure the enforcement of arbitration agreements according
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to their terms so as to facilitate streamlined proceedings.”). The FAA “leaves no place for
the exercise of discretion by the district court, but instead mandates that district courts shall
direct the parties to proceed to arbitration on issues as to which an arbitration agreement
has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985).
Accordingly, under the FAA, the Court must, as a general matter, determine “two
‘gateway’ issues: (1) whether there is an agreement to arbitrate between the parties; and
(2) whether the agreement covers the dispute.” Brennan, 796 F.3d at 1130. If the two
factors are met, the Court must enforce the arbitration agreement in accordance with its
precise terms. Kilgore v. KeyBank, Nat. Ass’n, 673 F.3d 947, 955 (9th Cir. 2012), on reh’g
en banc, 718 F.3d 1052 (9th Cir. 2013). These gateway issues, however, “can be expressly
delegated 	to 	the 	arbitrator 	where 	‘the 	parties 	clearly 	and 	unmistakably provide
otherwise.’” Brennan, 796 F.3d at 1130 (emphasis added) (quoting AT&T Techs., Inc. v.
Commc’ns Workers of Am., 475 U.S. 643, 649 (1986)).
The party seeking to compel arbitration “has the burden of proving the existence of
an agreement to arbitrate by a preponderance of the evidence.” Knutson v. Sirius XM Radio
Inc., 771 F.3d 559, 565 (9th Cir. 2014). “In determining whether a valid arbitration
agreement exists, federal courts apply ordinary state-law principles that govern the
formation of contracts.” Heckman v. Live Nation Ent., Inc., 120 F.4th 670, 680 (9th Cir.
2024), cert. denied sub nom. Live Nation v. Heckman, No. 24-1145, 2025 WL 2823733
(U.S. Oct. 6, 2025). “Thus, generally applicable contract defenses, such as fraud, duress,
or 	unconscionability, 	may 	be 	applied 	to 	invalidate 	arbitration 	agreements 	without
contravening” federal law. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996).
“[T]he party opposing arbitration bears the burden of proving any defense, such as
unconscionability.” Pinnacle Museum Tower Assn. v. Pinnacle Mkt. Dev. (US), LLC, 55
Cal. 4th 223, 236 (2012). “Any doubts about the scope of arbitrable issues, including
applicable contract defenses, are to be resolved in favor of arbitration.” Tompkins v.
23andMe, Inc., 840 F.3d 1016, 1022 (9th Cir. 2016).
///
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III. 	DISCUSSION
Defendants move to compel arbitration of Plaintiff’s individual claims pursuant to
the DRP and to dismiss Plaintiff’s class and UCL claims. (See generally Doc. No. 30-1.)
Plaintiff opposes the motion, arguing that his claims are expressly excluded from
arbitration by the DRP and, alternatively, the DRP is unconscionable. (See generally Doc.
No. 39.) The Court addresses each issue in turn.3
A. 	Whether the Agreement Encompasses the Claims at Issue
1. 	Plaintiff’s Individual California Labor Code Claims
Defendants state the DRP mandates arbitration of Plaintiff’s individual claims
because they “directly arise from Plaintiff’s employment with SeaWorld” and “seek[] to
recover unpaid wages, including minimum wages, overtime wages, meal period premiums,
rest period premiums, and sick pay, along with derivative penalties for untimely payment
of wages and inaccurate itemization of unpaid wages under state law.” (Doc. Nos. 30-1 at
6–7; 42 at 5–6.) Following Defendants’ logic, the claims are expressly covered under
category B.9 of the Covered Claims. (See DRP at 12.)
In opposition, Plaintiff asserts his claims all “seek to modify and/or object to
Defendant’s policies and procedures,” which are excluded from the DRP. (Doc. No. 39 at
10–11.) Specifically, Plaintiff argues that “[e]very cause of action alleged in Plaintiff’s
Complaint is based on harm caused to him and the Class Members as a result of
Defendant’s company policies and procedures.” (Id. at 11.) Because the claims include
excluded 	components—Defendants’ 	policies 	and 	procedures 	and 	injunctive 	relief
therefrom—Plaintiff asserts the claims in their entirety should be considered excluded. (Id.
at 9–10 (relying on Jack v. Ring LLC, 91 Cal. App. 5th 1186 (2023), review denied (Sept.
13, 2023)).)
The Court is not persuaded by Plaintiff’s recharacterization of wage-and-hour
3 	As a threshold matter, the parties agree that the Court should decide the arbitrability of the DRP.
(See Doc. Nos. 30-1 at 13; 39 at 11.)
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violation claims seeking damages as challenges to Defendants’ policies and procedures.
Although the Complaint references Defendants’ policies and procedures in the claims, at
the foundation, these are claims for unpaid wages under California state law. (Compare
Compl. ¶¶ 62–118 with DRP at 12.) This is highlighted by the relief sought for all eight
non-UCL claims: compensatory damages, liquidated damages, interest, and penalties.
(Compl. at 49–50.) Although it may be the practical implication of such claims, Plaintiff
does not explicitly seek Defendants to change their policies or procedures in bringing these
claims. Moreover, as Defendants note (see Doc. No. 42 at 6–7), to rule otherwise would
convert every wage-and-hour claim from covered to excluded, thereby making the
distinction meaningless. Accordingly, the Court finds that the second through ninth claims
fall within the scope of the arbitration agreement as covered claims pursuant to category
B.9.
2. 	Plaintiff’s Class Claims
Having 	found 	the 	non-UCL 	individual 	claims 	covered, 	the 	Court 	turns 	to
Defendants’ arguments regarding those brought on a representative basis. Defendants
argue that because the DRP and IPCA “are silent on the availability of class arbitration”
and “the parties did not affirmatively agree to submit class claims to arbitration,
[Defendants] cannot be compelled to do so.” (Doc. No. 30-1 at 12–13.) Plaintiff, relying
solely on his recharacterization of the wage claims, fails to substantively address this
argument. (See generally Doc. No. 39.)
“Arbitration is strictly a matter of consent and thus is a way to resolve those
disputes—but only those disputes—that the parties have agreed to submit to arbitration.”
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 299 (2010) (cleaned up)
(emphasis in original). Because of “‘crucial differences’ between individual and class
arbitration, . . . courts may not infer consent to participate in class arbitration absent an
affirmative ‘contractual basis for concluding that the party agreed to do so.’” Lamps Plus,
Inc. v. Varela, 587 U.S. 176, 185 (2019) (quoting Stolt-Nielsen S.A. v. AnimalFeeds Int’l
Corp., 559 U.S. 662, 684 (2010)) (emphasis in original). “Silence is not enough; the ‘FAA
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requires more.’” Id. (quoting Stolt-Nielsen S.A., 559 U.S. at 687).
Here, the agreement is silent on the issue of class arbitration. (See generally DRP.)
Because the parties did not affirmatively consent to class arbitration, the parties cannot be
compelled to submit their dispute to class arbitration. See Stolt-Nielsen S.A., 559 U.S. at
687; see also, e.g., Freeman v. Seaworld Parks & Ent., Inc., No.: 22-cv-01127-AJB-DEB,
2023 WL 6370632, at *5 (S.D. Cal. May 9, 2023) (ruling Sea World’s DRP Policy and
Agreement do not permit class wide arbitration). Rather, Plaintiff must arbitrate his
California Labor Code claims against Defendants on an individual basis.
3. 	Plaintiff’s UCL Claim
Defendants do not separately address Plaintiff’s UCL claims. (See generally Doc.
Nos. 30; 42.) Rather, Defendants argue these claims are “derivative” and lump them with
Plaintiff’s other individual and class claims. (See Doc. No. 30-1 at 5, 12–13.) Similarly,
Plaintiff does not separately address the UCL claims (see generally Doc. No. 39); however,
Plaintiff relies on Jack, a case involving inter alia a UCL claim, in support of his argument
that all his claims are excluded from arbitration. See supra § III.A.1.
In Jack, the Court of Appeal applied California’s “McGill rule” that “an arbitration
agreement is invalid and unenforceable insofar as it purports to waive a claimant’s statutory
right to seek public injunctive relief in any forum.” Jack, 91 Cal. App. 5th at 1208 (citing
McGill v. Citibank, N.A., 2 Cal. 5th 945, 961 (2017)). Finding the arbitration provision at
issue to do so, the Jack court turned to the severability clause with regard to the plaintiff’s
claims for public injunctive relief, including a UCL claim. Id. at 1208–09. The court
disagreed with the defendant that the severability clause should carve only out the remedy
to be severed and require arbitration of the liability, damages, and non-public injunctive
relief. Id. at 1209–10. Instead, the court severed the entirety of the causes of action seeking
public injunctive relieve, permitting those claims to proceed in court. Id. at 1210.
In opposition, Defendants dismiss Plaintiff’s argument by stating that the DRP does
not limit access to injunctive relief or contain a wholesale waiver of PAGA claims, unlike
the agreement at issue in Jack. (Doc. No. 42 at 7 n.2.)
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Unlike Plaintiff’s other claims, the UCL cause of action is more persuasively framed
as an objection to Defendants’ policies or procedures. (See DRP at 12 (listing as excluded
“[c]laims 	that 	seek 	to 	establish, 	modify 	or 	object 	to 	the 	Company’s 	policies 	or
procedures”).) Plaintiff’s UCL cause of action alleges that Defendants engage in an
unlawful, deceptive, and fraudulent business practice of violating state and federal labor
laws by implementing non-compliant policies. (Compl. ¶¶ 47–61.) For relief, Plaintiff
seeks restitutionary disgorgement and an order enjoining Defendants from engaging in
similar unlawful conduct. (See Compl. at 49.) Considering that Plaintiff seeks to enjoin
Defendants from engaging in their current practices and implementing the current policies,
the Court finds Plaintiff’s first cause of action is an excluded claim.4
B. 	Whether the Agreement Is Enforceable
Plaintiff further argues the DRP is unenforceable because it is unconscionable. (Doc.
No. 39 at 11–31.) Defendants respond that the DRP is procedurally and substantively fair,
but if any portion is found to be unconscionable, the Court may sever the unconscionable
portion and enforce the remainder of the arbitration provision. (See generally Doc. No. 42.)
“Under 	the 	Federal 	Arbitration 	Act, 	generally 	applicable 	contract 	defenses,
including unconscionability, may invalidate an arbitration agreement.” Ronderos v. USF
Reddaway, Inc., 114 F.4th 1080, 1089 (9th Cir. 2024). “Under California law, a contract is
unconscionable if one of the parties lacked a meaningful choice in deciding whether to
agree and the contract contains terms that are unreasonably favorable to the other party.”
Ronderos, 114 F.4th at 1089. “To establish this defense, the party opposing arbitration must
demonstrate procedural and substantive unconscionability, but both need not be present in
the same degree.” Lim v. TForce Logistics, LLC, 8 F.4th 992, 1000 (9th Cir. 2021) (citation
omitted). Rather a “sliding scale is invoked,” such that “the more substantively oppressive
4 	Any potential argument Defendants could have made that Plaintiff’s UCL claim is covered as a
“[c]laim[] of violation of public policy” is not addressed herein because Defendants fail to make any such
argument. (Compare DRP at 12 with Doc. Nos. 30 and 42, generally.)
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the contract term, the less evidence of procedural unconscionability is required to come to
the conclusion that the term is unenforceable, and vice versa.” Armendariz v. Found.
Health Psychcare Servs., Inc., 24 Cal. 4th 83, 114 (2000).5
1. 	Procedural Unconscionability
“The procedural element addresses the circumstances of contract negotiation and
formation, focusing on oppression or surprise due to unequal bargaining power.” OTO,
L.L.C. v. Kho, 8 Cal. 5th 111, 125 (2019). “‘Oppression arises from an inequality of
bargaining power that results in no real negotiation and an absence of meaningful choice,’
while ‘surprise involves the extent to which the supposedly agreed-upon terms are hidden
in a prolix printed form drafted by the party seeking to enforce them.’” Nagrampa v.
MailCoups, Inc., 469 F.3d 1257, 1280 (9th Cir. 2006) (quoting Flores v. Transamerica
HomeFirst, Inc., 93 Cal. App. 4th 846, 853 (2001)).
Plaintiff argues the DRP and IPCA are procedurally unconscionable due to both
oppression and surprise. With regard to oppression, Plaintiff argues that both the DRP and
IPCA 	are 	contracts 	of 	adhesion 	presented 	on 	a 	“take-it-or-leave-it” 	basis 	without
opportunity to negotiate. (Doc. No. 39 at 13; see also Doc. No. 39-1, Declaration of Steven
Joseph, “Joseph Decl.”, at ¶ 4.) Plaintiff further asserts he was “pressured into signing it
promptly, before being considered for employment and beginning work.” (Doc. No. 39 at
14; Joseph Decl. ¶¶ 3–4.) Finally, Plaintiff asserts that, because the DRP is “silent on
Plaintiff’s ability to consult with an attorney before being bound,” Defendants “did not
permit Plaintiff to review the Agreement with an attorney[.]” (Doc. No. 39 at 14; Joseph
Decl. ¶ 6.) With regard to surprise, Plaintiff states the DRP is a long document, “written in
extremely small font” and filled with “statutory references and legal jargon,” the intricacies
5 	Defendants assert that “California’s Armendariz standards are preempted by the FAA[] and are
therefore not relevant to the Court’s ruling on this motion.” (Doc. No. 30-1 at 10 n.3 (citing Concepcion,
563 U.S. at 346–47 n.6).) To broadly read Concepcion as deeming the entire unconscionability doctrine
in conflict with or otherwise frustrating the purpose of the FAA is untethered from the Supreme Court’s
language and over a decade of subsequent interpretation.
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and limitations of which he was unfamiliar. (Doc. No. 39 at 14–15; Joseph Decl. ¶ 5.)
Moreover, 	the 	DRP 	was 	“presented 	with 	the 	litany 	of 	other 	onboarding
documents/acknowledgments that Plaintiff was required to sign[.]” (Doc. No. 39 at 14;
Joseph Decl. ¶¶ 3–4.)
Defendants concede the DRP is a contract of adhesion. (Doc. No. 42 at 12.)
However, Defendants argue Plaintiff was not rushed to complete the onboarding and there
was a representative available to answer questions regarding the DRP. (Id. at 13.)
Defendants state they have designed the DRP to enhance readability and allow applicants
to reschedule their onboarding if they wish to have someone help them review their
documents. (Id. at 14.)
The Court agrees with both parties that the DRP is a contract of adhesion. See
Ronderos, 114 F.4th at 1089 (“A contract of adhesion is a standardized contract imposed
and drafted by the party of superior bargaining strength and gives the subscribing party
only the opportunity to adhere to the contract or reject it.”) (internal quotation marks and
citation omitted). Thus, the DRP exhibits some degree of procedural unconscionability due
to the presence of oppression. See Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899,
915 (2015) (“[T]he adhesive nature of the contract is sufficient to establish some degree of
procedural unconscionability.”); Szetela v. Discover Bank, 97 Cal. App. 4th 1094, 1100
(2002) (“When the weaker party is presented the clause and told to ‘take it or leave it’
without the opportunity for meaningful negotiation, oppression, and therefore procedural
unconscionability, are present.”). The Court finds unpersuasive Plaintiff other arguments
asserting oppression, including the leap that silence regarding consulting counsel regarding
the DRP means that Defendants prevented Plaintiff from doing so. Plaintiff cites no
authority for such a tenuous assertion. The Court finds that there is no more oppression
than a typical contract of adhesion in a pre-employment on-boarding setting. 	See
Armendariz, 24 Cal. 4th at 115 (“[I]n the case of preemployment arbitration contracts, the
economic pressure exerted by employers on all but the most sought-after employees may
be particularly acute, for the arbitration agreement stands between the employee and
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necessary employment, and few employees are in a position to refuse a job because of an
arbitration requirement.”).
However, based on the parties’ representations and the Court’s independent review
of the DRP, there is no surprise with regard to arbitration. The binding arbitration provision
is referenced throughout the DRP, is listed on the “Dispute Resolution Program” flow
chart, and is extensively explained in its dedicated section entitled “Procedural Rules for
Level 3.” (See generally DRP.) Additionally, despite Plaintiff’s characterization of the
agreement as using “extremely small font,” the Court notes that the DRP is clearly labeled
with large headings, includes significant white space between article provisions, and uses
charts and tables to provide additional clarity in organizing information. (See generally id.)
Having found some procedural unconscionability due to the DRP’s adhesive nature,
the Court turns next to whether there is sufficient substantive unconscionability to render
the DRP’s arbitration provision unenforceable. See Prostek v. Lincare Inc., 662 F. Supp.
3d 1100, 1115 (E.D. Cal. 2023) (“[I]f an employee must sign a non-negotiable employment
agreement as a condition of employment but there is no other indication of oppression or
surprise, 	then 	the 	agreement 	will 	be 	enforced 	unless 	the 	degree 	of 	substantive
unconscionability is high.”) (quoting Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1261
(9th Cir. 2017)); Ramirez v. Charter Commc’ns, Inc., 16 Cal. 5th 478, 494 (2024)
(“[A]lthough 	adhesion 	alone 	generally 	indicates 	only 	a 	low 	degree 	of 	procedural
unconscionability, the potential for overreaching in the employment context warrants close
scrutiny of the contract’s terms.”).
2. 	Substantive Unconscionability
“Substantive unconscionability examines the fairness of a contract’s terms.” Lim, 8
F.4th at 1001 (quoting 	OTO, 8 Cal. 5th at 129). “[T]he standard for substantive
unconscionability—the requisite degree of unfairness beyond merely a bad bargain—must
be as rigorous and demanding for arbitration clauses as for any contract clause.” Valencia
Holding Co., 61 Cal. 4th at 912. “The substantive element looks to the actual terms of the
parties’ agreement to ensure that contracts, particularly contracts of adhesion, do not
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impose terms that have been variously described as overly harsh, unduly oppressive, so
one-sided as to shock the conscience or unfairly one-sided.” Magno v. The Coll. Network,
Inc., 1 Cal. App. 5th 277, 287–88 (2016) (internal quotation marks omitted).
Plaintiff challenges the DRP and the IPCA as substantively unconscionable on
myriad grounds. (Doc. No. 39 at 15–31). The Court will address each of Plaintiff’s
concerns in turn.
i. 	Reading the DRP with the IPCA
First, Plaintiff asserts that the DRP must be considered in conjunction with the IPCA
for purposes of determining substantive unconscionability. (See Doc. No. 39 at 12, 28–29
(relying on Alberto v. Cambrian Homecare, 91 Cal. App. 5th 482, 491 (2023)).
Instead of addressing the propriety of analyzing the DRP and the IPCA in
conjunction for purposes of determining unconscionability, Defendants only challenge the
applicability of the Alberto court’s ultimate finding of unconscionability to the instant
circumstances. (See Doc. No. 42 at 7–8.)
California Civil Code § 1642 provides that “[s]everal contracts relating to the same
matters, between the same parties, and made as parts of substantially one transaction, are
to be taken together.” Cal. Civ. Code § 1642. In applying § 1642, the Alberto court found
that an arbitration agreement and a confidentiality agreement should be considered together
because they: (1) “were executed on the same day”; (2) “were both separate aspects of a
single primary transaction—[the employee’s] hiring”; and (3) “both governed, ultimately,
the same issue—how to resolve disputes . . . arising from [the employee’s] employment.”
91 Cal. App. 5th at 490–91. As with Alberto, here Plaintiff executed the DRP and IPCA
on the same day, execution of both was required as a part of Plaintiff’s hiring, and both
address disputes that may arise from Plaintiff’s employment.
Based on Alberto and Defendants’ lack of opposition, the Court finds that the DRP
and IPCA are to be construed together. See, e.g., Ly v. Tesla, Inc., 757 F. Supp. 3d 1033,
1047 (N.D. Cal. 2024).
///
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ii. 	Mutuality
Plaintiff asserts the agreements are unconscionable because the DRP and IPCA lack
mutuality. (Doc. No. 38 at 16–17, 28–29.) First, Plaintiff argues that “the DRP primarily
requires arbitration of the types of claims only employees bring against employers” and
forces Defendants only to arbitrate an employee’s beach of the DRP’s confidentiality
requirements. (Doc. No. 39 at 16–17.) Specifically, Plaintiff states that “[t]he only
Company claims that are identified as being subject to the DRP are those the Company
may have against an Employee ‘for breach of confidentiality.’” (Id. at 17.) Second, Plaintiff
argues that the IPCA lacks mutuality because it “allows Defendant to obtain an injunction
in court, without having to show irreparable harm or no adequate remedy[.]” (Id. at 28–29
(relying on Alberto, 91 Cal. App. 5th at 492).)
“[I]f 	an 	agreement 	singles 	out 	certain claims 	for arbitration, 	there must 	be
mutuality.” Ramirez, 16 Cal. 5th at 495 (citation omitted); see also Ronderos, 114 F.4th at
1094 (“Agreements to arbitrate must contain at least a modicum of bilaterality to avoid
unconscionability.”). “The agreement cannot require one contracting party, but not the
other, to arbitrate all claims arising out of the same transaction or occurrence or series of
transactions or occurrences.” Ramirez, 16 Cal. 5th at 495 (citation omitted). “Not all one-
sided terms are unconscionable, but the party seeking to enforce a one-sided term must
provide at least some reasonable justification for such one-sidedness based on business
realities.” Ronderos, 114 F.4th at 1094 (citation omitted). “Without reasonable justification
for this lack of mutuality, arbitration appears less as a forum for neutral dispute resolution
and more as a means of maximizing employer advantage.” Ramirez, 16 Cal. 5th at 495
(quoting Armendariz, 24 Cal.4th at 118).
Here, Plaintiff mischaracterizes the language of the covered claims by intimating
that the DRP limits Defendants’ covered claims to breach of confidentiality. However, the
DRP in actually provides that “claims relating to or arising out of the employment
relationship that . . . the Company may have against an employee, including breach of
confidentiality[.]” (DRP at 12 (emphasis added).) As noted by the California Supreme
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Court, “[i]t is not particularly remarkable that the agreement’s list of examples might
highlight certain types of claims . . . . The examples do not alter the substantive scope of
the agreement, nor do they render the agreement sufficiently unfair as to make its
enforcement unconscionable.” Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1249, 367
P.3d 6, 15 (2016). Similarly, here, the DRP does not provide an exhaustive list of all of the
types of claims that Defendants can bring against an employee for work-related conduct.6
Having found the covered claims mutual, the Court must still analyze the excluded
claims to determine if those excluded are to the benefit of Defendants without reasonable
justification. See Ronderos, 114 F.4th at 1094. The DRP excludes claims arising under the
Employment Retirement Income Security Act of 1974, workers’ compensation, and the
National Labor Relations Act, which would be brought by employees. (DRP at 12.)
Additionally, the DRP excludes “[c]laims that seek to establish, modify or object to the
Company’s policies or procedures, except claims alleging discriminatory application of
such policies or procedures,” which would also be brought by employees. (Id.) The only
excluded claims typically brought by employers are claims involving patents, trademarks,
trade secrets, or other intellectual property and claims against an individual employee that
do not involve conduct within the scope of the employee’s employment. (Id.)
Plaintiff points only to the exclusion of intellectual property claims without
addressing the four other categories of claims that would be brought by employees. (See
Doc. No. 39 at 17.) However, considering the list of excluded claims in totality, the Court
does not find that there is a lack of mutuality with regard to the excluded claims either. See
Gutierrez v. Sea World LLC, No. 14-CV-0131-BTM-JMA, 2014 WL 4829087, at *5 (S.D.
Cal. Sept. 26, 2014) (“The DRP’s language makes clear that both the employer and the
employee’s claims arising from or related to the employment relationship would be subject
6 The only case to which Plaintiff analogizes—Navas v. Fresh Venture Foods, LLC, 85 Cal. App.
5th 626 (2022)—addresses a starkly different arbitration agreement, one that limited covered claims to
only those brought by employees. See Navas, 85 Cal. App. 5th at 636.
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to the DRP in the same capacity. The excluded categories include, e.g., intellectual property
claims, ERISA claims, worker’s compensation claims, and claims objecting to the
company’s policies and procedures (except those alleging discriminatory application of
such policies). Only the intellectual property claims are claims likely to be brought by the
employer. The other excluded claims are more likely to be brought by an employee.”).
Turning to the mutuality of the IPCA, Plaintiff claims the IPCA is not mutual
because it “requires employees to agree that: (1) any breach of its terms ‘will cause
immediate or irreparable damage to the Company’; (2) ‘such damage may be extremely
difficult or impossible to measure precisely’; (3) ‘there is no adequate remedy at law for
such failure’; and (4) ‘upon any breach or violation . . . the Company shall be entitled, as a
matter of right . . . to []injunctive relief in any court of competent jurisdiction.’” (Doc. No.
39 at 28 (quoting IPCA § 9; citing Alberto, 91 Cal. App. 5th at 492).) Defendants respond
that “the DRP and I[PC]A, together, contain only one of the provisions that Alberto
identified as unconscionable,” namely the agreement regarding the existence of irreparable
injury. (Doc. No. 42 at 7–8 (emphasis in original).)
California courts have found that:
[P]rovisions that allow employers to seek a preliminary injunction outside of
arbitration for breach of a confidentiality agreement are not, by themselves,
unconscionable, simply because they primarily benefit employers[; however,]
additional provisions that waive the employer’s need to obtain a bond before
seeking an injunction, waive the employer’s need to show irreparable harm,
and 	require 	an 	employee 	to 	consent 	to 	an 	immediate 	injunction 	are
unconscionable[ because t]hey exceed the legitimate margin of safety for the
employer and are not mutual.
Alberto, 91 Cal. App. 5th at 492; see also Lange v. Monster Energy Co., 46 Cal. App. 5th
436, 451 (2020); Gurganus v. IGS Sols. LLC, 115 Cal. App. 5th 327, 338 (2025); Silva v.
Cross Country Healthcare, Inc., 111 Cal. App. 5th 1311, 1329 (2025).
Defendant provided no reasonable justification based on business realities for the
IPCA to grant Defendant relief from having to “establish[] all of the essential elements for
the issuance of an injunction.” See Lange, 46 Cal. App. 5th at 451. Accordingly, that
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provision of the IPCA is substantively unconscionable, albeit to a lesser degree than the
combined provisions at issue in Alberto and other cited cases. See, e.g. Gonzalez v. CVS
Health Corp., 781 F. Supp. 3d 1006, 1010 (N.D. Cal. 2025) (finding substantively
unconscionable provisions permitting the company but not the employee to an injunction
without showing irreparable harm and without posting a bond); Ly, 757 F. Supp. 3d at 1048
(same).
iii. 	Level 1 Procedures Imposed on Employees
Plaintiff also asserts the DRP is a “one-sided shield” that requires employees to agree
to use “an employer’s internal dispute procedures as a prerequisite to arbitration” even
though “employees do not know what they are agreeing to.” (Doc. No. 39 at 18 (relying on
Navas, 85 Cal. App. 5th at 636).) Specifically, Plaintiff argues that the “DRP does not
provide employees with any means of finding out what the Level 1 procedures are for their
specific locations” before having to agree to the terms. (Id.)
Plaintiff relies only on a quote from the DRP’s Overview. (See id. (quoting DRP at
9).) Absent from Plaintiff’s argument on this point is any discussion, analysis, or even
reference to the section entitled Procedural Rules for Level 1 Local Management Review.
As Plaintiff notes, the DRP states that “Level 1 problem-solving procedures vary
according to the needs of the individual Company location. Therefore, each location has
implemented its own procedures for Local Management Review.” (DRP at 14.) However,
the DRP provides “minimum requirements” that apply across all locations:
Using the DRP Notice of Dispute form, the Employee shall submit the dispute
to the local Human Resources department or designated HR management for
that department or facility. The Employee should provide a detailed account
of his/her claim(s), the individuals involved, and a desired outcome. The
Employee may retain a copy of the completed document and keep a record of
the date and names of the individuals to whom the document is submitted.
The local HR manager is responsible for immediately forwarding a copy of
the form to the DRP Administrator.
(DRP at 14.) The DRP also sets forth details regarding timeliness of Level 1 claims and
presence of attorneys to further explain the process. (Id.) Completely inapposite to the
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DRP, the agreement in Navas set forth that the employee was to “utiliz[e] the internal
complaint procedures” but “those procedures [we]re not described” in the agreement.
Navas, 95 Cal. App. 5th at 636.
The Court finds the DRP sufficiently details the required procedures such that the
requirement to participate in the Level 1 Local Management Review is not a one-sided
shield keeping employees in the dark.7 The provision is not unconscionable on this ground.
iv. 	“Peek” at Employees’ Claims
Plaintiff argues that the DRP is unconscionable because “it provides the employer
with a ‘free peek’ at the employee’s case, ‘thereby obtaining an advantage if and when
[the] plaintiff were to later demand arbitration.’” (Doc. No. 39 at 18 (quoting Pokorny v.
Quixtar, Inc., 601 F.3d 987 (9th Cir. 2010); then citing Navas, 85 Cal. App. 5th at 636;
Nyulassy v. Lockheed Martin Corp., 120 Cal. App. 4th 1267, 1282 (2004)).)
The courts in Pokorny, Navas, and Nyulassy all found unconscionable provisions in
which employees, but not employers, were required to submit their claims to a non-binding,
internal dispute resolution process, without the benefit of a neutral decision-maker, prior
to submitting their claims to arbitration. See Pokorny, 601 F.3d at 998–99; Navas, 85 Cal.
App. 5th at 636; Nyulassy, 120 Cal. App. 4th at 1282–83.
In contrast, here, both Defendants and employees are required to submit any covered
claims to non-binding mediation at Level 2. (See DRP at 15.) The DRP sets forth the
process for the parties to “select a mediatory by mutual agreement.” (Id. at 16.) Moreover,
if the parties “cannot agree to the selection of a mediator, the DRP Administrator will
request that the [American Arbitration] Association appoint a mediator in accordance with
its procedures.” (Id.) Because the DRP sets forth a mutual requirement for non-binding
mediation before a neutral mediator prior to arbitration, the Court finds Plaintiff’s reliance
on Pokorny, Navas, and Nyulassy inapposite and the provision not unconscionable.
7 	In fact, Plaintiff’s utter failure to address the actual provision about which he selectively quotes
the introduction raises questions about whether Plaintiff’s argument on this point is made in good faith.
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v. 	Time Restrictions
Plaintiff alleges the DRP imposes unreasonable time restrictions on employees in
three ways. (Doc. No. 39 at 19–21.) First, Plaintiff asserts that by permitting an employee
to bring a covered claim to Level 1 within the statute of limitations, the employee could
miss the statute of limitations to file the claim in court if the DRP Administrator determines
it is in fact an excluded claim. (Id. at 20.) On the other end of the spectrum, Plaintiff argues
that requiring an employee to initiate subsequent levels of the DRP no more than 30 days
after the previous level’s determination “could result in shortening the statute of limitations
from several years to just several months.” (Id.) Additionally, Plaintiff asserts that the 30-
day turn around will impact the employee’s ability to find an attorney for subsequent levels
and to bring newly identified claims. (Id.) Either way, Plaintiff argues, “these mandated
time limitations could result in shortening the statute of limitations from several years to
just several months.” (Id. (citing Ramirez, 16 Cal. 5th at 502).) Third, Plaintiff argues that
“the DRP is set up in such a way to deprive employees of their rights to have an
investigation conducted by the [Department of Faire Employment and Housing (‘DFEH’)]
before the employee is required to pursue [Fair Employment and Housing Act (‘FEHA’)]
claims in arbitration” because “it is highly unlikely that the 30 days employees are given
after an unsuccessful mediation to submit their dispute to arbitration at Level 3 would be
sufficient for an administrative claim to be filed with and fully investigated by the
DFEH.”8,9 (Id. at 21.)
In response, Defendants state “the DRP does not shorten limitations periods”
because “there are no time limits on submitting a dispute to Level 1,” and if an employee
intends to proceed beyond Level 1 “the only ‘untimely’ claim is one that would also be
8 	In July 2022, DFEH changed its name to the Civil Rights Department (“CRD”). Cal. Civ. Rights
Dep’t, 	About 	Civil 	Rights 	Department 	(CRD) 	(2025), 	https://calcivilrights.ca.gov/aboutcrd/
[https://perma.cc/GK2J-VYZP]. The parties use both acronyms in their briefing to refer to the same state
administrative agency.
9 	The Court notes that, despite Plaintiff not bringing any FEHA claims against Defendants in the
instant action, Plaintiff raises no less than five unconscionability defenses on the basis of FEHA.
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untimely in a civil court.” (Doc. No. 42 at 10.) Further, Defendants assert that Plaintiff’s
argument regarding the time limitations’ impact on pursuing administrative charges is a
“red herring” that incorrectly puts into conflict “the DRP timings requirements for
requesting each Level” with “the employee’s rights to pursue an administrative charge for
claims such as wage theft, discrimination, or retaliation.” (Id. at 10–11.) Defendants note
that “under the DRP, a timely request for Level 1 could be made at any time after the charge
was filed, including after the employee had engaged a lawyer,” and “[t]he request for
Level 1 would still be timely under the DRP because the limitations period would not have
expired (due to tolling).” (Id. at 11.)
The DRP provides that “[t]here are no time limits for an Employee’s submission of
disputes at Level 1[; h]owever, if the Employee intends to submit a covered claim to Levels
2 or 3,” (DRP at 14) then “the dispute must have been submitted to Level 1 within 180
days of the date the dispute arose or before the expiration of the statute of limitations
applicable to the alleged unlawful conduct or violation of law, whichever is longer” (DRP
at 13). Finally, any request for Level 2 Nonbinding Mediation or Level 3 Binding
Arbitration must be made within 30 days of the date of the notice or determination for the
prior level. (Id.)
Plaintiff reliance on Ramirez’s affirming the unconscionability of a filing limit is
unpersuasive because there the employee’s deadline to raise a FEHA claim with his
employer was limited from three years (the FEHA statute of limitations) to one year (the
deadline to submit an administrative claim to DFEH). Ramirez, 16 Cal. 5th at 502. The
California Supreme Court found the filing limitation substantively unconscionable because
it “substantially shorten[ed] the time for fully pursuing a FEHA claim and may preclude a
DFEH investigation.” Id. Here, however, the deadline to initiate the Level 1 process is the
longer of either 180 days from when the dispute arose or the statute of limitations for the
relevant civil action. As such, the DRP does not necessarily shorten the statute of
limitations, in contrast to Ramirez and all the California Courts of Appeal decisions it
discusses. If an employee chooses to pursue Level 1 prior to filing an administrative claim
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with CRD, then the limitations for requesting Level 2 and 3 may arise before the statute of
limitations would have run. However, those choices—as is the choice of when to file a civil
lawsuit—fall within the employee’s power. Plaintiff’s concerns about the panoply of
decisions, some more strategic than others, that one who seeks potential legal action faces
does not make the limitations in this DRP per se unreasonable and Plaintiff has not
demonstrated that the limitations to request Level 2 or Level 3 review “would effectively
eliminate any meaningful participation by DFEH.” See Ramirez, 16 Cal. 5th at 501.
Accordingly, because the DRP does not shorten the limitations period or preclude
meaningful participation by CRD, the Court finds the DRP does not impose unreasonable
time restrictions on employees. Thus, this provision is not unconscionable.
vi. 	Adequacy of Discovery
Plaintiff next argues the DRP limits discovery to the point it is “insufficient for
employees to vindicate their statutory rights under the Labor Code and FEHA.” (Doc. No.
39 at 22–23.) Specifically, Plaintiff points to the number of depositions, the number of
interrogatories, the scope of what is discoverable, and that the cost of document production
is to be borne by the party serving the request. (Id.) Plaintiff further argues that “the DRP
gives the arbitrator unfettered discretion over how much discovery does or does not take
place” because “upon a showing of good cause, the arbitrator may grant either party’s
request for additional or alternative discovery above or beyond that which the DRP
expressly provides.” (Id. at 23.)
Defendants counter that the “DRP’s discovery provisions are sufficient” because
other courts have found similar limitations sufficient. (See Doc. No. 42 at 11 (citing Sheelit
v. Amerisave Mortgage Corp., 2024 WL 5317305 (C.D. Cal. Oct. 21, 2024); Siglain v.
Trader Publ’g Co., 2008 U.S. Dist. LEXIS 92095 (N.D. Cal. July 25, 2008)).)
“The assessment of whether a discovery clause is unconscionable should focus
on . . . factors includ[ing] the types of claims covered by the agreement, the amount of
discovery allowed, the degree to which that amount may differ from the amount available
in conventional litigation, any asymmetries between the parties with regard to discovery,
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and the arbitrator’s authority to order additional discovery.” Ramirez, 16 Cal. 5th at 506.
Plaintiff’s emphasis on the permissive language granting the arbitrator authority to
order additional discovery in attempt to characterize possible declination of additional
discovery as unconscionable is misplaced. The California Supreme Court has clearly held
that “[a]llowing the arbitrator to deviate from agreed-upon default discovery limits ensures
that neither party will be unfairly hampered in pursuing a statutory claim based on
circumstances that arise post-formation.” Id. In fact, “giving the arbitrator authority to
expand discovery based on Armendariz’s requirement is one way the adequacy[-of-
discovery] concern can be addressed.” Id.
Plaintiff fails to provide any analysis as to why the discovery provided for in the
DRP is inadequate. (See Doc. No. 39 at 22–23 (listing permissible discovery and cursorily
stating that it is insufficient).) Instead, Plaintiff cites to Ontiveros v. DHL Express (USA),
Inc., 164 Cal. App. 4th 494 (2008), with a parenthetical summarizing that the court
“[affirmed the lower court’s finding that] an arbitration agreement that allowed each party
to take only one deposition in addition to expert depositions and document requests, with
the right to additional discovery by order of the arbitrator ‘upon a showing of substantial
need’, to be inadequate to vindicate statutory rights under FEHA.” (Doc. No. 39 at 23
(quoting Ontiveros, 164 Cal. App. 4th at 511–14).) Despite Plaintiff’s assertion to the
contrary, the California Supreme Court in Ramirez expressly disapproved of the reasoning
the Ontiveros court used to assess and deem unconscionable the discovery provision. See
Ramirez, 16 Cal. 5th at 505–06 (“The Court of Appeal is correct that several appellate
decisions have assessed the unconscionability of discovery provisions in the manner
described. (See . . . Ontiveros v. DHL Express (USA), Inc. (2008) 164 Cal. App. 4th 494,
513–514 . . . .) This approach to addressing unconscionability challenges to discovery
clauses in arbitration agreements seems to be taking hold, and it clearly looks to post-
contract formation circumstances. We disapprove this line of reasoning.”). Even if the
analysis of Ontiveros on this issue had not been expressly disapproved of, there the
standard for additional discovery was substantial need where here it is good cause.
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“[S]howing ‘good cause’ is not a shocking or oppressive threshold.” Gutierrez, 2014 WL
4829087, at *5. The Court finds the DRP’s discovery provision is not unconscionable.
vii. 	Confidentiality Requirement
Plaintiff also asserts the DRP imposes an unlawful confidentiality requirement
because, “[i]n the employment context, confidential arbitration ‘tilts the scales of justice’
against potential victims of abuse ‘by denying them access to any information about other
claims’ against the wrongdoer.” (Doc. No 39 at 23–24 (quoting Haydon v. Elegance at
Dublin, 97 Cal. App. 5th 1280, 1290 (2023)).) Plaintiff argues Haydon is “on point”
because “the Court of Appeals [sic] found a similar confidentiality provision barring the
parties from ‘discols[ing] [sic] the existence, content or results of the arbitration’ ‘to be
unconscionable to a high degree.’” (Doc. No. 39 at 24 (quoting Haydon, 97 Cal. App. 5th
at 1290) (alterations and errors in original).)
Without addressing Plaintiff’s reliance on Haydon, Defendants assert that the Ninth
Circuit has held that “a confidentiality provision identical to the DRP’s provision was not
substantively unconscionable.” (Doc. No. 42 at 11–12 (citing Poublon v. C.H. Robinson
Co., 846 F.3d 1251 (9th Cir. 2017).)
The DRP’s confidentiality provision in its entirety provides:
All aspects of the arbitration including without limitation the record of the
proceeding, are confidential and shall not be open to the public except: (a) to
the extent that both parties agree otherwise in writing; (b) as may be
appropriate in any subsequent proceedings between the parties; or (c) as may
otherwise be appropriate in response to a governmental agency request
pursuant to, or as otherwise required by, law.
At the request of either party, or upon his or her own initiative, the Arbitrator
shall issue protective orders appropriate to the circumstances and shall enforce
the confidentiality of the arbitration as set forth in this Article 19.
(DRP at 25.)
The Court finds the provision “substantially identical” to a provision upheld by both
the Ninth Circuit in Poublon and by the California Court of Appeal in Sanchez v. CarMax
Auto Superstores Cal. LLC, 224 Cal. App. 4th 398 (2014). In those cases, as in the instant
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action, the confidentiality provisions “require that the arbitration, including the record of
the proceeding, be confidential, and . . . include the same enumerated exceptions.” See
Poublon, 846 F.3d at 1266 (relying on Sanchez v. CarMax Auto Superstores Cal. LLC, 224
Cal. App. 4th at 408).
Despite Plaintiff’s summary conclusion that the provisions are similar, the provision
in Haydon was substantially more restrictive than that at issue here. See Haydon, 97 Cal.
App. 5th at 1290. In fact, the Haydon court expressly distinguished the confidentiality
provisions at issue in Sanchez as “narrower provisions requiring only the proceedings
themselves to remain confidential.” Id.
Having found the provision at issue identical to those in upheld by both the Ninth
Circuit and California Courts of Appeal, the Court finds that the confidentiality provision
at issue in the DRP is not unconscionable.
viii. 	Employees’ Statutory Rights under FEHA
Plaintiff contends “the DRP purports to waive an employee’s statutory right under
FEHA to the remedy of reinstatement” because it permits the arbitrator to grant the
terminated employee reasonable front pay at the request of the employer without requiring
the employer “to show that there were legitimate, nondiscriminatory reasons that would
have led the employer to terminate the employee in any event,” which “runs afoul of
FEHA[.]” (Doc. No. 39 at 24–25.)
It is clear from Armendariz and its progeny that where an arbitration clause excludes
remedies accessible in court, such as reinstatement for a FEHA claim, the provision will
be found substantive unconscionable. See Armendariz, 24 Cal. 4th at 104 (concluding an
arbitration provision that required the employee to expressly disclaim “any other remedy,
at law or in equity, including but not limited to reinstatement and/or injunctive relief” was
“contrary to public policy and unlawful” when applied to statutory claims, like FEHA).
Following Armendariz, California Courts of Appeal have similarly found unconscionable
arbitration 	agreements 	that 	expressly 	proscribe 	plaintiffs 	from 	obtaining 	remedies
otherwise available for statutory claims. See, e.g., Ramos v. Superior Ct., 28 Cal. App. 5th
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1042, 1060 (2018), as modified (Nov. 28, 2018) (holding a provision unenforceable where
it “preclude[d] the arbitrators from providing remedies that would otherwise be available
in a court of law” for the plaintiff’s FEHA and Equal Pay Act claims).
However, unlike the provisions at issue in Armendariz and Ramos, the DRP does
not preclude reinstatement as relief available to Plaintiff in arbitration.
Upon a finding that a party has sustained his or her burden of persuasion, the
Arbitrator shall, except as provided by Article 13 (Authority of the Arbitrator)
and Article 16 below (Front Pay Option Instead of Reinstatement), have the
same power and authority as a judge or a jury in a court trial to grant any relief
available under applicable law in the relevant jurisdiction.
. . .
If the Arbitrator orders the reinstatement of a terminated Employee, there may
be situations where the Employee does not want to return to work or the
Company does not wish to reinstate the Employee. In such situations, the
Arbitrator, at the request of either party, shall issue a supplementary award
granting 	the 	terminated 	Employee 	reasonable 	front 	pay 	instead 	of
reinstatement, in accordance with the applicable state or federal law.
(DRP at 23–24.)
Plaintiff fails to establish the unconscionability of a provision such as the one at issue
here where reinstatement is relief within the arbitrator’s authority to award but subject to
replacement with reasonable front pay at the option of either party. Directly on point,
however, the district court in 	Asher v. E! Ent. Television, LLC 	found a provision
substantially identical to the one at issue here to not be substantively unconscionable in the
face of the same arguments asserted by Plaintiff. No. CV 16-8919-RSWL-SSX, 2017 WL
3578699, at *7 (C.D. Cal. Aug. 16, 2017) (“Plaintiff misinterprets this provision as a
limitation on remedies. Unlike arbitration agreements that bar recovery to reinstatement,
injunctive relief, or other remedies provided by state and federal law, the provision here
does not entirely foreclose avenues to certain damages and relief. Rather, the employee
may receive reinstatement, but if either party would prefer reasonable front pay, they may
pursue this alternative option with the arbitrator through evidence and supplemental
arguments.”) (citation omitted).
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Moreover, it is not clear to the Court that Plaintiff’s characterization of reinstatement
as mandated is accurate. The court in Ramos used permissive—not prescriptive—language
to explain that, if a plaintiff prevails on statutory FEHA causes of action, “she may be
entitled to a variety of remedies, including backpay, front pay, or both, reinstatement, or
punitive damages.” Ramos, 28 Cal. App. 5th at 1060 (emphasis added); see also Asher,
2017 WL 3578699, at *7 (“Plaintiff does not show that reinstatement is a required remedy
under FEHA; rather, when ‘feasible,’ it is ‘the preferred remedy’ in Title VII intentional
discrimination cases.”). Plaintiff points to Harris v. City of Santa Monica, 56 Cal. 4th 203
(2013), as stating “the only circumstances under which a Company may be relieved of its
obligations to reinstate wrongfully terminated employees.” (Doc. No. 39 at 25.) However,
the Harris court held “when a jury finds that unlawful discrimination was a substantial
factor motivating a termination of employment, and when the employer proves it would
have made the same decision absent such discrimination, a court may not award damages,
backpay, or an order of reinstatement.” Harris, 56 Cal. 4th at 211. Nowhere in the ruling
does the California Supreme Court state that this is the only circumstance where
reinstatement is not required. See generally id. In fact, nowhere in the opinion does the
California Supreme Court state that reinstatement is ever required or a statutory right as
Plaintiff characterizes it.10 See generally id.
Accordingly, the Court finds Plaintiff has failed to meet his burden in demonstrating
that the remedy provisions are substantively unconscionable.
ix. 	Costs Unique to Arbitration
Next, Plaintiff states the DRP “unconscionably subjects employees to costs that are
unique to arbitration” because “employees would not be subject to the imposition of
attorney’s fees and costs for failing to comply with requirements of confidentiality if he or
10 	The remaining case cited by Plaintiff—Dougherty v. Roseville Heritage Partners, 47 Cal. App.
5th 93, 260 Cal. Rptr. 3d 580 (2020)—addresses neither FEHA nor limitations on relief accessible in
arbitration and is only relied upon for the general proposition that advanced waiver of an employee’s
statutory rights is substantively unconscionable. As such, the Court does not address it further.
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she were free to bring the action in court[.]” (Doc. No. 39 at 25–26.)
Defendants counter that, because “a civil court may impose monetary sanctions for
unreasonable delay, failure to cooperative in discovery, and violating a confidentiality or
protective order,” any monetary sanctions an arbitrator may award pursuant to the DRP’s
sanction provision “are not costs unique to arbitration.” (Doc. No. 42 at 12 (emphasis in
original).)
The relevant DRP sanctions provision states:
The Arbitrator may sanction either party by awarding the other party
reasonable attorneys’ fees and costs associated with production of witnesses
or proof; upon a finding that the other party (a) engaged in unreasonable delay,
(b) failed to cooperate in discovery, or (c) failed to comply with requirements
of confidentiality.
(DRP at 24.)
Plaintiff improperly conflates ordering payment of attorneys’ fees as a discovery
sanction with the award of attorneys’ fees to the prevailing party. Relying on the California
Supreme Court’s ruling in Ramirez, Plaintiff asserts that “allowing the Company to recover
attorney’s fees in a FEHA action where the arbitrator has made no finding of frivolity,
groundlessness, or continued litigation also undermines the public policy embodied in
FEHA's asymmetric fee shifting rule.” (Doc. No. 39 at 26 (citing Ramirez, 16 Cal. 5th at
508).) In Ramirez, the court held that a provision requiring an employee who opposes the
arbitration agreement in court to pay the employer’s attorney’s fees was unconscionable
because it required the employee to bear an expense “only in an arbitral setting.” Ramirez,
16 Cal. 5th at 508 (citing Armendariz, 24 Cal. 4th at 111).
Unlike Ramirez, the sanction provision here does not impose a cost unique to
arbitration. In federal court, plaintiffs may be ordered to pay the defendant’s attorney’s fees
incurred in relation to the plaintiffs’ violation of a discovery order, such as a protective
order. See Fed. R. Civ. P. 37(b)(2)(C) (authorizing the court to order “the disobedient party,
the attorney advising that party, or both to pay the reasonable expenses, including
attorney’s fees, caused by the failure [to comply with a court order], unless the failure was
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substantially justified or other circumstances make an award of expenses unjust”); see also,
e.g., Brewer v. Leprino Foods Co., Inc., No. CV-1:16-1091-SMM, 2019 WL 356657, at
*11 (E.D. Cal. Jan. 29, 2019) (awarding attorney’s fees pursuant to Rule 37 to the defendant
in a FEHA action incurred due to the plaintiff’s behavior); McLaurin v. Russell Sigler, Inc.,
155 F. Supp. 3d 1042, 1047 (C.D. Cal. 2016) (“[T]he Policy’s provisions requiring Plaintiff
to pay a $100 filing fee and imposing attorney fees as sanctions for discovery abuses aren’t
unconscionable[ in a FEHA action], as Plaintiff could bear those costs in a judicial forum
as well.”).
Moreover, the DRP requires Defendants to pay the costs unique to arbitration,
including “(a) any filing and other administrative fees required by the Association; (b) the
Arbitrator’s fees and reasonable travel expenses; (c) the cost of renting an arbitration
hearing room; (d) the Employee’s salary or wages up to a maximum of seven hearing days
(if still employed by the Company) for the time spent at the arbitration hearing; and (e) the
salary or wages of current Employees called as witnesses for the time spent at the
arbitration hearing up to a maximum of two hearing days.” (DRP at 25.)
Accordingly, the Court finds that the sanctions provision does not unconscionably
require Plaintiff to incur a cost unique to arbitration.
x. 	Discretion in Awarding Attorney’s Fees
Plaintiff argues that the DRP’s fee clause is unconscionable because it “gives the
arbitrator discretion in the determination of whether to award reasonable attorney’s fees to
a prevailing employee.” (Doc. No. 39 at 26–28.) Defendants respond that “the DRP does
not diminish the employee’s rights to recover fees” because it permits the arbitrator to
award attorneys’ fees to the employee “as provided under applicable law.” (Doc. No. 42 at
12.)
The relevant provision of the DRP provides: “Each party shall bear all costs normally
associated with litigation including but not limited to, its own experts’ and/or attorneys’
fees. The Arbitrator may award costs, including reasonable experts’ and/or attorneys’ fees,
to the Employee or the Company as provided under applicable law.” (DRP at 18.)
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“Several courts have held an arbitration provision is substantively unconscionable
when it purports to deprive an employee of his or her statutory right to recover attorney
fees if the employee prevails on a Labor Code claim for unpaid wages and other benefits,
or on a discrimination claim under the California Fair Employment and Housing Act.”
Carbajal v. CWPSC, Inc., 245 Cal. App. 4th 227, 251 (2016) (collecting cases). Here,
Plaintiff points to two specific statutes FEHA and California Labor Code § 1194(a).
“FEHA grants a trial court discretion to award ‘reasonable attorney’s fees and costs’ to
‘the prevailing party.’” Ramirez, 16 Cal. 5th at 507 (emphasis added). California Labor
Code § 1194 states that, upon prevailing on minimum wage and overtime claims, an
employee “is entitled to recover in a civil action the unpaid balance of the full amount of
this minimum wage or overtime compensation, including interest thereon, reasonable
attorney’s fees, and costs of suit.” Cal. Lab. Code § 1194(a).
Plaintiff relies heavily on California Court of Appeal cases where the arbitration
agreement included a pure fee splitting provision. (See Doc. No. 39 at 26–28 (relying on
Beco v. Fast Auto Loans, Inc., 86 Cal. App. 5th 292 (2022); Carbajal v. CWPSC, Inc., 245
Cal. App. 4th 227 (2016); Serpa v. California Sur. Investigations, Inc., 215 Cal. App. 4th
695 (2013), as modified (Apr. 26, 2013)).) However, the provisions at issue in those cases
did not provide the arbitrator with discretion to award attorney’s fees as the DRP here does.
See Serpa, 215 Cal. App. 4th at 709–10 (“Had the agreement to arbitrate been silent on the
question of attorney fees, or provided for the recovery of attorney fees in an appropriate
circumstance or in accordance with applicable law, we might agree with the CSI parties.
However, the attorney fee provision is not ambiguous. It expressly requires each party to
bear his, her or its own attorney fees regardless of the type of action brought. It provides
for this 	approach 	even 	while expressly stating 	the agreement governs 	actions for
harassment and discrimination. For that reason, the provision limiting the recovery of
attorney fees is unenforceable.”); Carbajal, 245 Cal. App. 4th at 251 (“The arbitration
provision’s plain language requires the parties to be responsible for their own attorney fees
without any exceptions. Nothing in the provision’s language suggestions the parties
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intended to limit or qualify this provision by also granting the arbitrators broad authority
to award all types of relief authorized by law.”).
Additionally, Plaintiff relies on California Court of Appeal cases where the
arbitration provisions mandated the prevailing party be awarded attorney fees, even if the
prevailing party is the defendant in a FEHA action, which is similarly inapposite to the
DRP. See Wherry v. Award, Inc., 192 Cal. App. 4th 1242, 1249 (2011) (“Here, the
agreements provide that the prevailing party is entitled to attorney fees, without any
limitation for a frivolous action or one brought in bad faith.”); Trivedi v. Curexo Tech.
Corp., 189 Cal. App. 4th 387, 394–95 (2010), disapproved of by Baltazar v. Forever 21,
Inc., 62 Cal. 4th 1237, 367 P.3d 6 (2016) (“In contrast to case law under FEHA, the
agreement does not limit Curexo’s right to recover to instances where Trivedi’s claims are
found to be ‘frivolous, unreasonable, without foundation, or brought in bad faith.’ Thus,
enforcing the arbitration clause and compelling Trivedi to arbitrate his FEHA claims
lessens his incentive to pursue claims deemed important to the public interest, and weakens
the legal protection provided to plaintiffs who bring nonfrivolous actions from being
assessed fees and costs.”).
Finally, Plaintiff’s reliance on Gentry v. Superior Court, 42 Cal.4th 443 (2007), is
unavailing because the issue before the California Supreme Court was “whether class
arbitration waivers in employment arbitration agreements may be enforced to preclude
class arbitrations by employees whose statutory rights to overtime pay pursuant to Labor
Code sections 500 et seq. and 1194 allegedly have been violated,” not whether the
attorney’s fees provision of the arbitration agreement was unconscionable. Gentry, 42 Cal.
4th at 450, 470–71. In dicta, the Gentry court characterized “a provision that parties will
‘generally’ be liable for their own attorney fees, with the arbitrator having the ‘discretion’
to award the employee attorney fees,” as a “significant disadvantage[]” when compared to
“section 1194’s provision that a prevailing employee ‘is entitled to’ reasonable attorney
fees and costs.” Id. at 574. Not every provision that benefits the stronger party to the
disadvantage of the weaker party is necessarily overly harsh, unduly oppressive, so one-
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sided as to shock the conscience or unfairly one-sided. See Magno, 1 Cal. App. 5th at 287–
88 (internal quotation marks omitted). Such a provision may be to Plaintiff’s disadvantage
in the context of California Labor Code minimum wage and overtime claims, but the Court
is 	not 	persuaded 	that 	Plaintiff 	has 	met 	his 	“rigorous 	and 	demanding” 	burden 	of
demonstrating “the requisite degree of unfairness beyond merely a bad bargain” to support
a finding of unconscionability. See Valencia Holding Co., 61 Cal. 4th at 912.
xi. 	IPCA’s Forum Selection and Governing Law Clauses
Finally, Plaintiff argues the forum selection and choice of law clauses in the IPCA
violate California Labor Code § 925 because the IPCA sets the governing law as “the
internal laws of the State of Florida and the applicable federal laws of the United States”
and sets the state and federal courts in Orlando, Florida as the venue. (Doc. No. 39 at 29
(quoting IPCA § 12).)
Pursuant to California Labor Code § 925, “[a]n employer shall not require an
employee who primarily resides and works in California, as a condition of employment, to
agree to a provision that would . . . (1) [r]equire the employee to adjudicate outside of
California a claim arising in California[ or] (2) [d]eprive the employee of the substantive
protection of California law with respect to a controversy arising in California.” Cal. Lab.
Code § 925(a). “Any provision of a contract that violates subdivision (a) is voidable by the
employee, and if a provision is rendered void at the request of the employee, the matter
shall be adjudicated in California and California law shall govern the dispute.” Cal. Lab.
Code § 925(b).
Considering that Plaintiff is a California resident who was employed by Defendants
in San Diego, California, and considering that Plaintiff signed the IPCA as a condition of
his employment, the choice of law and forum selection provisions of the IPCA violate
California Labor Code § 925 and thus are void. See Sheelit, 754 F. Supp. 3d at 1012 (“In
line with this public policy embodied in Section 925, courts in California have also
recognized that agreements requiring employees to pursue arbitration in a distant forum
often impose too great a burden and are substantively unconscionable.”) (cleaned up).
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However, none of Plaintiff’s claims pertain to or arise from the IPCA. Rather, they
are claims covered by the DRP, which has its own forum selection clause. The DRP states
that “[u]nless the parties agree otherwise, the arbitration hearing shall take place within 25
miles of the work.” (DRP at 19.) As such, arbitration for Plaintiff would take place in
California, absent the parties’ agreement to the contrary.
3. 	Severability
No provisions of the DRP itself are substantively unconscionable; however, one
provision of the IPCA is substantively unconscionable, see supra § III.2.B.ii, and another
is void, see supra § III.2.B.xi. Having so found, the Court turns to whether the offending
provisions are severable.
Defendants request the Court strike any clause found unenforceable, enforce the
remainder of the DRP, and compel individual arbitration because “the contract is not
‘permeated’ with unconscionability.” (Doc. No. 42 at 14.)
Plaintiff, on the other hand, asserts that “the defects in the DRP indicate that
Defendant[s] engaged in a systematic effort to impose arbitration on the weaker party not
simply as an alternative to litigation, but to secure a forum that works to the stronger party’s
advantage, the interest of justices would not be furthered through severance or restriction.”
(Doc. No. 39 at 31.) Based on Plaintiff’s alleged “show[ing of] a heightened degree of
procedural unconscionability and twelve (12) substantively unconscionable provisions,”
Plaintiff 	requests 	the 	Court 	“decline 	to 	sever 	the 	offending 	provisions 	and 	deny
Defendant[s’ m]otion.” (Id.)
“If a contractual clause is found unconscionable, the court may, in its discretion,
choose to do one of the following: (1) refuse to enforce the contract; (2) sever any
unconscionable clause; or (3) limit the application of any clause to avoid unconscionable
results.” Ramirez, 16 Cal. 5th at 513; see also Cal. Civ. Code § 1670.5(a). “Though the
‘statute appears to give a trial court some discretion as to whether to sever or restrict the
unconscionable provision or whether to refuse to enforce the entire agreement,’ it ‘also
appears to contemplate the latter course only when an agreement is ‘permeated’ by
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unconscionability.’” Ramirez, 16 Cal. 5th at 513 (quoting Armendariz, 24 Cal. 4th at 122);
see also Ronderos, 114 F.4th at 1099 (“California law provides, as a general rule, that
unlawful contractual provisions should be severed and the remainder of the contract
enforced.”).
Here, the only offending provisions are in the IPCA, not the DRP. Considering that
Plaintiff’s claims to not implicate the IPCA and the offending provisions are not “the
central purpose of the contract,” the unconscionable and void provisions “can be extirpated
from the contract by means of severance[,]” and, as such, severance is appropriate. See
Armendariz, 24 Cal. 4th at 124.
4. 	Conclusion
Having severed the two provisions of the IPCA found to be problematic, the Court
finds that the remaining agreement to arbitrate is valid and enforceable. Because Plaintiff’s
individual claims fall within the scope of the agreement, those claims are compelled to
arbitration pursuant to the DRP. Having so compelled Plaintiff’s individual claims and
having found the DRP silent as to class arbitration, Plaintiff’s class claims are dismissed.
Plaintiff’s UCL claim is excluded from the DRP’s scope and, thus, remains.
IV. 	CONCLUSION
For the reasons discussed above, the Court GRANTS in part and DENIES in part
Defendants’ motion. Specifically, the Court GRANTS Defendants’ motion to compel
arbitration of Plaintiff’s individual claims, GRANTS Defendants’ motion to dismiss
Plaintiff’s class claims, and DENIES Defendants’ motion to dismiss Plaintiff’s UCL
claim. Plaintiff must arbitrate his individual claims pursuant to the terms of the DRP.
Plaintiff’s UCL claim for injunctive relief is stayed pending the resolution of the arbitration
proceedings. The Court further ORDERS:
1. 	The instant action is STAYED pending arbitration.
2. 	The parties must file a joint status report addressing the status of arbitration is
due no later than March 10, 2026, with specific details including the date when the parties
submitted the matter to arbitration.
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3. 	Every sixty days thereafter, the parties must file joint status reports
informing the Court about the status of arbitration, including specific details regarding
subsequent dates, any changes to dates, and actions the parties are taking to facilitate the
process.
IT IS SO ORDERED.
Dated: January 6, 2026
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