Taylor v. Starbucks Corporation

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
SHEENA TAYLOR,
Plaintiff,
v.
STARBUCKS CORPORATION,
Defendant.
Case No.: 3:24-cv-01511-RBM-MMP
ORDER:
(1) GRANTING DEFENDANT’S
MOTION TO COMPEL
ARBITRATION
(2) STAYING CASE PENDING
ARBITRATION
[Doc. 9]
Plaintiff Sheena Taylor (“Plaintiff”), proceeding pro se, brought this action against
Defendant Starbucks Corporation (“Defendant”) asserting claims for racial discrimination,
discrimination based on marital status, retaliation under Title VII, breach of employment
contract, wrongful termination, intentional infliction of emotional distress, defamation, and
invasion of privacy. (Doc. 1 (“Complaint”).) Defendant responded to the Complaint by
filing a Motion to Compel Arbitration (“Motion”) based on an arbitration agreement that
Plaintiff signed when she was hired by Defendant in September 2022. (Doc. 9.) Plaintiff
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has filed an Opposition. 	(Doc. 11.) 	Defendant has filed a Reply (Doc. 12) and Plaintiff
filed an unauthorized Sur-Reply (Doc. 13.)
The Court finds the matter suitable for determination on the papers and without oral
argument pursuant to Civil Local Rule 7.1(d)(1). 	For the reasons set forth below, the
Motion is GRANTED.
I. 	BACKGROUND
A. 	Complaint
Plaintiff 	alleges 	that 	she 	“experienced 	racial 	discrimination 	throughout 	her
employment with [Defendant].” 	(Compl. ¶¶ 8, 14.1) 	She also asserts Defendant’s
“recruiter engaged in a pattern of discriminatory behavior, including: … [i]mproperly
sharing [Plaintiff’s] personal information with another employee; … [m]arginalizing
[Plaintiff] based on her single mother status; … [s]tereotyping [Plaintiff] by pressuring her
to connect with another Black manager during relocation, whom [Plaintiff] had never met;
[and] … [d]iscriminating against [Plaintiff] due to her unmarried status.” 	(Id. ¶ 9.) 	She
claims her employment offers were rescinded and she was terminated when she refused to
comply with the recruiter’s request that she “‘group up’ with the other Black manager” and
did “not conform[] to stereotypical expectations.” (Id. ¶¶ 10–11, 13.)
Plaintiff claims Defendant retaliated against her, including by pursing an invalid debt
related to relocation benefits and falsely claiming she declined a job offer. (Id. ¶¶ 15, 20–
22.) She also alleges Defendant’s retaliation became increasingly aggressive after she filed
with the United States Equal Employment Opportunity Commission (“EEOC”). (Id. ¶ 16.)
The Complaint references emails, phone messages, and text messages that Plaintiff asserts
contradict Defendant’s position and support Plaintiff’s claims. (Id. ¶¶ 20, 24–25.) Plaintiff
attaches right to sue letters from the EEOC and California Civil Rights Department to her
Complaint. 	(Doc. 1-2 at 3–5.) 	Plaintiff seeks compensatory damages of $5,000,000 for
1 The Court cites the paragraph numbers of the Complaint and the CM/ECF electronic
pagination for all other cites to the record unless otherwise noted.
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lost wages and benefits, emotional distress, mental anguish, and damage to professional
reputation; punitive damages of $200,000 for Defendant’s “malicious and reckless
conduct;” injunctive relief in the form of antidiscrimination policies and training; and
attorney’s fees and costs. (Compl. Prayer at 6–7.)
B. 	Arbitration Agreement
Defendant’s Motion details how Plaintiff set up and utilized Defendant’s online
application system to apply for jobs. 	(Doc. 9-1 at 7–9 (citing Decl. of Marangwanda
(“Marangwanda Decl.”) ¶¶ 3, 6–9)). 	Defendant also explains how, after receiving a job
offer, Plaintiff used the same online system to consent to electronically sign documents
and then electronically signed the Mutual Arbitration Agreement (“the Arbitration
Agreement”). (Doc. 9-1 at 9–10 (completed the Arbitration Agreement task in the system
by reading and then electronically signing it by entering last four digits of social security
number) (citing Marangwanda Decl. ¶¶ 9–12).) Plaintiff signed the Arbitration Agreement
on September 12, 2022. (Id. ¶¶ 13–14, Exs. F–G.)
Under the heading “Mutual Agreement to Arbitrate,” the Arbitration Agreement
states that:
[Defendant] and [Plaintiff] agree to use binding individual arbitration to
resolve any ‘Covered Claims’ that arise between [Plaintiff] and [Defendant]
… . ‘Covered Claims’ are those brought under any statute, local ordinance, or
common law relating to [Plaintiff’s] employment, including those concerning
any 	element 	of 	compensation, 	harassment, 	discrimination, 	retaliation,
recovery of bonus or relocation benefits, leaves of absence, accommodations,
or termination of employment.
(Marangwanda Decl. ¶ 13, Ex. F [Doc. 9-3 at 32].) The Arbitration Agreement states
that it is “enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. Sections
1 et. seq.” (Id.)
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Defendant’s counsel contacted Plaintiff numerous times after Plaintiff filed this
action and requested she stipulate to arbitration pursuant to the terms of the Arbitration
Agreement Plaintff signed on September 12, 2022. 	(Decl. of Danielle Zobel 	(“Zobel
Decl.”) ¶ 3, Ex. A [Doc. 9-2].) Plaintiff did not respond. (Id.)
II. 	DISCUSSION
The Federal Arbitration Act (“FAA”) provides that a written provision in “any . . .
contract evidencing a transaction involving commerce to settle by arbitration a controversy
thereafter arising out of such contract or transaction …shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation of any
contract or as otherwise provided in chapter 4.” 	9 U.S.C. § 2. 	“The Arbitration Act
establishes that, as a matter of federal law, 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.” Chiron Corp. v. Ortho Diagnostic Sys. Inc., 207 F.3d 1126, 1131
(9th Cir. 2000) (quoting Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S.
1, 24–25 (1983)). Any party bound to an arbitration agreement that falls within the scope
of the FAA may bring a motion to compel arbitration. 	9 U.S.C. § 4 (party aggrieved by
refusal of another to arbitrate “may petition any United States district court … for an order
directing that such arbitration proceed in the manner provided for in such agreement.”);
see also 9 U.S.C. § 3 (stay of case until arbitration is completed)).
The FAA 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) (emphasis in original). 	The Court must
consider “(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the
agreement encompasses the dispute at issue.” 	Kilgore v. KeyBank, Nat’l Ass’n, 718 F.3d
1052, 1058 (9th Cir. 2013) (en banc) (citation omitted); see also 9 U.S.C. § 2.
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A. 	A Valid Arbitration Agreement Exists
The Arbitration Agreement Plaintiff signed on September 12, 2022, as part of her
onboarding, is a valid arbitration agreement between Plaintiff and Defendant. As detailed
above (see Section I.B), Plaintiff entered into the Arbitration Agreement after she accepted
a position and electronically signed the Arbitration Agreement. 	See Chamber of Com. of
the United States of Am. v. Bonta, 62 F.4th 473, 488 (9th Cir. 2023) (“It has long been
established that parties to a contract are generally deemed to have consented to all the terms
of a contract they sign, even if they have not read it.”).
Here, the Arbitration Agreement is valid because, as discussed further below,
Plaintiff agreed to arbitrate any disputes with Defendant related to her employment and the
Arbitration Agreement encompasses the claims Plaintiff raises in this case. Plaintiff does
not suggest she did not sign the Arbitration Agreement, rather she challenges its
presentation to her and its terms as unconscionable. However, the Arbitration Agreement
is not unconscionable. Additionally, Plaintiff’s EEOC letter does not preclude Defendant’s
enforcement of the Arbitration Agreement, and Defendant did not waive its right to enforce
the Arbitration Agreement by offering her a settlement before she filed this case.
1. 	The Arbitration Agreement is Not Unconscionable
“Under California law, the party opposing arbitration bears the burden of proving
any defense, such as unconscionability.” 	Bielski v. Coinbase, Inc., 87 F.4th 1003, 1013
(9th Cir. 2023) (citations omitted). 	“For a court to refuse to enforce a provision due to
unconscionability, a party must show the provision has elements of both procedural and
substantive unconscionability.” Id. (citations omitted). Courts analyze unconscionability
on a sliding scale: “the more substantively oppressive the contract term, the less evidence
of procedural unconscionability is required ... and vice versa.” Id.
“[P]rocedural unconscionability addresses contract negotiation and formation and
focuses on ‘oppression or surprise due to unequal bargaining power.’” 	Id. (quoting
Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 247
(2012)). “A court may find oppression where unequal bargaining power ‘results in no real
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negotiation and an absence of meaningful choice’ and surprise where ‘the challenged term
is hidden in a prolix printed form or is otherwise beyond the reasonable expectation of the
weaker party.’” 	Id. (quoting Grand Prospect Partners v. Ross Dress for Less, Inc., 232
Cal. App. 4th 1332, 1347 (2015) and Morris v. Redwood Empire Bancorp, 128 Cal. App.
4th 1305, 1321 (2005)).
The Court is not persuaded there was any surprise in the Arbitration Agreement.
Plaintiff reviewed and signed the Arbitration Agreement as part of her onboarding process
with Defendant and while she argues the Arbitration Agreement was buried amongst other
documents (Doc. 11 at 2, 4–5), the Court is not persuaded that the inclusion of the
Arbitration Agreement amongst other employment documents invalidates it, particularly
given Plaintiff consented to signing documents electronically, and signed it by entering a
portion of her social security number. (Marangwanda Decl. ¶¶ 11–13.) Additionally, the
Arbitration Agreement was its own task in the online system (Marangwanda Decl. ¶¶ 12–
13) and it is a separate document, with a heading in all caps and bold letters identifying it
as an arbitration agreement (id. ¶ 13, Ex. F [Doc. 9-3 at 32]). The Arbitration Agreement
is just over two pages and written in clear and concise language that explicitly states in
bold that she and Defendant are waiving “the right to trial before a judge or jury in federal
or state court.” (Id.) While there may be some procedural unconscionability because the
Arbitration Agreement was a precondition for employment, that alone is not sufficient to
find the Arbitration Agreement invalid. 	Poublon v. C.H. Robinson Co., 846 F.3d 1251,
1260–61 (9th Cir. 2017) (if 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 enforceable unless the degree of substantive unconscionability
is high.”); see Bielski, 87 F.4th at 1013 (“For a court to refuse to enforce a provision due
to unconscionability, a party must show the provision has elements of both procedural and
substantive unconscionability.”) (emphasis added).
“Courts in California have used various standards for determining when an
agreement is substantively unconscionable such as where the agreement is ‘overly harsh,’
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‘unduly oppressive,’ ‘unreasonably favorable,’ or ‘shock[s] the conscience.’” 	Keebaugh
v. Warner Bros. Ent. Inc., 100 F.4th 1005, 1022 (9th Cir. 2024) (quoting Sanchez v.
Valencia Holding Co., LLC, 61 Cal.4th 899, 910–11 (2015)). 	“Unconscionability ‘is
concerned 	not 	with 	a 	simple 	old-fashioned 	bad 	bargain, 	but 	with 	terms 	that 	are
unreasonably favorable to the more powerful party.’” Id. (quoting Sanchez, 61 Cal. 4th at
911).
None of the terms of the Arbitration Agreement fall into these categories or could
be considered unreasonably favorable to Defendant. The Arbitration Agreement provides
for a neutral arbitrator that issues a written arbitration award, adequate discovery, the same
remedies available in court, and provides that any filing fee will not exceed what would be
required in court up to a maximum of $225. (Marangwanda Decl. ¶ 13, Ex. F [Doc. 9-3 at
32–33]); see Armendariz v. Foundation Health Psychcare Servs., Inc. 24 Cal. 4th 83, 102–
114 (Cal. 2000) (explaining lawful arbitration agreements: (1) provide for a neutral
arbitrator; (2) provide for adequate discovery; (3) require a written arbitration award; (4)
provide for the same remedies available to the employee in court; and (5) do not require
the employee to bear more expense than they would to proceed in court). 	First, there is
nothing in the Arbitration Agreement that would limit Plaintiff’s ability to pursue her
claims in arbitration. 	The Arbitration Agreement provides for reasonable discovery,
including expansion of it by the arbitrator if needed. 	(Marangwanda Decl. ¶ 13, Ex. F
[Doc. 9-3 at 33].) Additionally, while the “Covered Claims” are largely the types of claims
an employee would bring against an employer, the Arbitration Agreement is mutual with
the waiver of the right to trial applicable to both parties. (Id. ¶ 13, Ex. F [Doc. 9-3 at 32]
(“[B]oth Starbucks and I waive the right to a trial before a judge or jury in federal or state
court.”).) 	Finally, the Court is not persuaded by Plaintiff’s unsupported assertion that
“[t]he arbitrator selection process unfairly favors [Defendant] as a repeat player in the
arbitration system.” (Doc. 11 at 6.) Plaintiff has not shown the Arbitration Agreement is
substantively unconscionable.
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Because there is only minimal procedural unconscionability based on the Arbitration
Agreement being a precondition for employment and no substantive unconscionability has
been shown, the Court finds the Arbitration Agreement is not unconscionable.
2. 	Arbitration is Not Precluded by Waiver or EEOC Letter
“[T]he test for waiver of the right to compel arbitration consists of two elements: (1)
knowledge of an existing right to compel arbitration; and (2) intentional acts inconsistent
with that existing right.” Hill v. Xerox Bus. Servs., LLC, 59 F.4th 457, 468 (9th Cir. 2023)
(explaining a third element, prejudice to the person opposing arbitration from the
inconsistent acts, was eliminated by Morgan v. Sundance, 596 U.S. 411 (2022)). Because
Defendant does not suggest it was unaware of its right to arbitration, the only issue is if
Defendant engaged in intentional acts inconsistent with its right to compel arbitration. Id.
Defendant did not. “‘There is no concrete test to determine whether a party has engaged
in acts inconsistent with its right to arbitrate; rather, [courts] consider the totality of the
parties’ actions.’” 	Id. at 471 (quoting Newirth by & through Newirth v. Aegis Senior
Communities, LLC, 931 F.3d 935, 941 (2019)).
Plaintiff argues Defendant waived the right to arbitrate when, prior to this litgation,
it offered her a settlement that failed to sufficiently address the harm she suffered. (Doc.
11 at 7–8.) 	She asserts Defendant could have “invoke[d] arbitration during those
discussions but strategically chose not to do so.” 	(Id. at 7.) 	However, offering a pre-
litigation settlement of Plaintiff’s complaints to Defendant is not inconsistent with
Defendant’s right to arbitrate. The Ninth Circuit has found “this element satisfied when a
party chooses to delay [its] right to compel arbitration by actively litigating [its] case to
take advantage of being in federal court.” Hill, 59 F.4th at 471 (quoting Martin v. Yasuda,
829 F.3d 1118, 1125 (9th Cir. 2016) (summarizing cases finding waiver, including
answering and moving to dismiss without asserting right to arbitration and conducting
discovery and litigating motions without asserting a right to arbitration). Defendant’s offer
of settlement prior to Plaintiff’s filing of this case was not inconsistent with Defendant’s
right to arbitrate and certainly was not done to take advantage of being in federal court
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given this case had not even been filed. 	Defendant did not file a motion to dismiss or
answer without asserting a right to arbitrate or attempt to pursue discovery or litigate any
facet of the case other than its right to arbitration. Defendant’s first filing in this case was
the Motion seeking to enforce Defendant’s right to arbitration.
Plaintiff seems to assert in Opposition that her receipt of a right-to-sue letter
somehow negates the Arbitration Agreement she signed. (Doc. 11 at 9–10.) However, she
cites no authority for this proposition. 	In Reply, Defendant notes that while Defendant
could not compel the EEOC to arbitrate claims if the EEOC were bringing claims on
Plaintiff’s behalf, here the EEOC is not pursuing litigation on behalf of Plaintiff. (Doc. 12
at 10.) 	The Court finds Plaintiff’s EEOC right-to-sue letter does not invalidate the
Arbitration Agreement.
B. 	The Arbitration Agreement Encompasses Plaintiff’s Claims
Contrary to Plaintiff’s arguments in her Opposition (Doc. 11 at 2, 8–9), all of
Plaintiff’s claims are encompassed by the Arbitration Agreement. 	As noted above (see
section I.B), the Arbitration Agreement defines “Covered Claims” as those “brought under
any statute, local ordinance, or common law 	relating to 	[Plaintiff’s] 	employment.”
(Marangwanda Decl. ¶ 13, Ex. F [Doc. 9-3 at 32] (emphasis added).) 	Plaintiff’s
characterization of these claims as separate from her employment and outside the scope of
the Arbitration 	Agreement because 	some are based 	on 	conduct that 	followed 	her
termination or “involve third parties” is inaccurate. 	All of the conduct Plaintiff alleges
Defendant engaged in as a basis for her claims was related to her employment because it
was part of employing or relocating her for the position she accepted or followed directly
from that employment-related conduct, i.e. disputes over relocation expenses or whether
she later declined a job offer. To the extent that there could be any question these claims
are related to her employment, the list of “Covered Claims” in the Arbitration Agreement,
including particularly “retaliation [and] recovery of bonus or relocation benefits” makes
clear that all Plaintiff’s claims are covered by the Arbitration Agreement. (Id.)
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III. 	CONCLUSION
For the reasons set forth above, Defendant’s Motion to Compel Arbitration (Doc. 9)
is GRANTED. This case is STAYED pending conclusion of arbitration pursuant to the
terms of the Arbitration Agreement. 	Within 14 days of the completion of arbitration
proceedings, the parties shall jointly submit a report advising the Court of the outcome of
the arbitration and request to dismiss the case or vacate the stay.
IT IS SO ORDERED.
Dated: March 10, 2026
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