Filed 9/10/26 Hokanson v. Northrop Grumman Systems Corp. CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
DAVID HOKANSON, B339490
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 20STCV39324)
v.
NORTHROP GRUMMAN
SYSTEMS CORPORATION,
Defendant and Respondent.
APPEAL from an order of the Superior Court of
Los Angeles County, Holly J. Fujie, Judge. Affirmed.
Aegis Law Firm, Kashif Haque and Ali S. Carlson, for
Plaintiff and Appellant.
Gibson, Dunn & Crutcher, Jesse A. Cripps and Amber D.
McKonly, for Defendant and Respondent.
‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗
After David Hokanson sued Northrop Grumman Systems
Corporation, his former employer, Northrop moved to compel
arbitration based on an arbitration agreement in Hokanson’s
employment contract. Hokanson argued that the agreement had
expired by the time of his dispute with Northrop. Northrop
contended that the agreement remained valid, and also asserted
that the parties had agreed to delegate the resolution of
threshold disputes to the arbitrator. The trial court agreed with
Northrop’s latter argument and compelled arbitration of the
entire dispute, including the resolution of Hokanson’s expiration
argument. The arbitrator rejected Hokanson’s expiration
argument and entered an arbitration award in favor of Northrop.
The trial court later confirmed that award.
On appeal, Hokanson argues that the trial court erred by
granting Northrop’s motion to compel arbitration. He again
asserts that the arbitration agreement did not clearly and
unmistakably delegate threshold questions of arbitrability to the
arbitrator, and that the trial court was required to resolve his
threshold expiration argument. On this point, we agree with
Hokanson. However, we also conclude that the arbitration
agreement did not expire, and that it required Hokanson to
arbitrate his dispute with Northrop. Accordingly, we affirm the
order compelling arbitration.
BACKGROUND
In 2020, Hokanson sued Northrop for violations of the
Labor Code and wrongful termination based on events that
occurred in 2018.
Northrop moved to compel arbitration of the dispute in
January 2021. It argued that Hokanson was required to
arbitrate pursuant to an employment agreement that Hokanson
2
signed in 2015. Through the employment agreement, Hokanson
agreed to submit any disputes with Northrop to binding
arbitration in accordance with Northrop’s Employee
Mediation/Binding Arbitration Program, CO No. H103A (the
program), which the employment agreement incorporated by
reference.
The program specified that any dispute arising out of or
relating to Hokanson’s employment with Northrop must be
mediated or arbitrated. But the program excepted certain
categories of disputes from this requirement, including those
relating to sexual assault or harassment, workers’ compensation,
employment insurance, and tax withholding. The program
specified that “all matters of procedure [and] arbitrability of the
issues . . . will be determined by the arbitrator . . . .” The
program also stated that the arbitration must be administered by
Judicial Arbitration & Mediation Services (JAMS) or the
American Arbitration Association (AAA). Pursuant to the
program, the arbitrator was required to apply the selected
tribunal’s arbitration rules, unless those rules contradicted the
program, in which case the requirements of the program took
precedence. Finally, a severability clause within the program
required that if “any court finds any portion of this Program to be
unenforceable, the unenforceable section(s) or provision(s) will be
severed from the rest, and the remaining section(s) or
provisions(s) will be otherwise enforced as written.”
Hokanson’s opposition argued that he was not required to
arbitrate the parties’ dispute because the program expired in
2016, some two years before the events giving rise to his claims
against Northrop. The opposition cited language in the program
stating that the procedure therein was authorized from “25
3
January 2013 for a period of three years,” at which time the
procedures “must be reauthorized . . . .” Hokanson further
argued that any subsequent reauthorization of the program was
ineffective.
In its reply, Northrop asserted that the program clearly
and unmistakably delegated threshold questions of arbitrability
to the arbitrator by specifying that “all matters of procedure
[and] arbitrability of the issues . . . will be determined by the
arbitrator . . . .” Northrop therefore asserted that the arbitrator,
and not the trial court, must resolve Hokanson’s threshold
arguments. In the alternative, Northrop contended that the
program did not expire and, in any event, had been reauthorized
in 2016 and 2017.
Because Northrop raised its delegation argument for the
first time on reply, the trial court permitted Hokanson to file a
sur-reply. The sur-reply argued that the program did not clearly
and unmistakably delegate all threshold questions of
arbitrability to the arbitrator. It acknowledged that the program
specified that the arbitrator must decide “all matters of procedure
[and] arbitrability of the issues,” but argued that this was
insufficient because the program did not expressly mention
issues of contract formation or enforceability.
The trial court granted the motion to compel arbitration. It
concluded that the program clearly and unmistakably delegated
threshold issues of arbitrability to the arbitrator, and that the
arbitrator must therefore resolve Hokanson’s challenge.
The arbitrator rejected Hokanson’s gateway challenge and
eventually entered a final arbitration award in favor of Northrop.
The trial court granted Northrop’s petition to confirm the award
4
and entered judgment accordingly. Hokanson timely appealed
from the order.
DISCUSSION
Hokanson argues that the trial court erred by granting
Northrop’s motion to compel arbitration. Specifically, Hokanson
asserts that no agreement to arbitrate existed because the
program expired before the parties’ dispute arose. He further
argues that the trial court was required to resolve this threshold
question because the parties did not clearly and undisputedly
delegate all gateway questions of arbitrability to the arbitrator.
Although we agree that the trial court should have resolved
Hokanson’s threshold argument, we also conclude that the
arbitration agreement remained in effect at the time of the
parties’ dispute. We therefore affirm the order compelling
arbitration.
I. The parties did not clearly and unmistakably
delegate all threshold issues of arbitrability to the
arbitrator
A. Legal framework and standard of review
“Courts presume that the parties intend courts, not
arbitrators, to decide threshold issues of arbitrability.” (Wilson-
Davis v. SSP America, Inc. (2021) 62 Cal.App.5th 1080, 1087.)
Thus, “the ‘question of arbitrability,’ is ‘an issue for judicial
determination [u]nless the parties clearly and unmistakably
provide otherwise.’ ” (Howsam v. Dean Witter Reynolds, Inc.
(2002) 537 U.S. 79, 83; Dennison v. Rosland Capital LLC (2020)
47 Cal.App.5th 204, 209 (Dennison) [“Under California law, it is
presumed the judge will decide arbitrability, unless there is clear
and unmistakable evidence the parties intended the arbitrator to
5
decide arbitrability.”].) “The ‘clear and unmistakable’ test
reflects a ‘heightened standard’ of proof.” (Ajamian v.
CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 782 (Ajamian).)1
As a matter of state law, “[w]e construe ambiguities against . . .
the drafting party. [Citation.]” (Hartley v. Superior Court (2011)
196 Cal.App.4th 1249, 1258 (Hartley).)
Threshold questions of arbitrability include “ ‘whether the
parties have agreed to arbitrate or whether their agreement
covers a particular controversy.’ ” (Henry Schein, Inc. v. Archer &
White Sales, Inc. (2019) 586 U.S. 63, 68 (Henry Schein).) Such
questions also include whether the parties’ agreement was “still
operative” when the underlying dispute arose. (Local 659,
I.A.T.S.E. v. Color Corp. of America (1956) 47 Cal.2d 189, 195.)
We review de novo whether an arbitration agreement
clearly and unmistakably delegated questions of arbitrability to
the arbitrator. (Malone v. Superior Court (2014) 226 Cal.App.4th
1551, 1562 (Malone).)
B. The program did not clearly and unmistakably
delegate gateway questions of contract
formation and continuing validity to the
arbitrator
Hokanson argues that the program did not clearly and
unmistakably delegate all gateway questions of arbitrability—
including whether the program remained in effect at the time of
the parties’ dispute—to the arbitrator. We agree.
1 Additionally, “the delegation must not be revocable under
state contract defenses” such as fraud, duress, or
unconscionability. (Pinela v. Neiman Marcus Group, Inc. (2015)
238 Cal.App.4th 227, 240.) Hokanson does not raise any such
defenses.
6
Through the program, Hokanson and Northrop agreed that
the “arbitrability of the issues . . . will be determined by the
arbitrator . . . .” However, “merely including the word
‘arbitrability’ ” does not import an arbitration agreement with
“some magical power that immediately transforms an ambiguous
clause into a ‘clear and unmistakable’ one.” (Beco v. Fast Auto
Loans, Inc. (2022) 86 Cal.App.5th 292, 304 (Beco).) Instead, “the
context in which a [contractual] term appears is critical.” (Mount
Vernon Fire Ins. Co. v. Busby (2013) 219 Cal.App.4th 876, 882.)
In this case, the phrase “arbitrability of the issues” does not
clarify precisely what sort of issues the arbitrator should resolve.
(Hartley, supra, 196 Cal.App.4th at p. 1258 [court must construe
ambiguous delegation clause against drafting party].) And the
program separately specified that several categories of disputes
would be resolved by a court. Thus, considering the entire
context, the program could be reasonably understood to delegate
to the arbitrator questions of substantive arbitrability, i.e.,
“ ‘whether their agreement covers a particular controversy.’ ”
(Henry Schein, supra, (2019) 586 U.S. at p. 68.) The delegation
language does not clearly and unmistakably encompass the
threshold issue that Hokanson raised in opposing arbitration:
whether the program remained in effect when the parties’
dispute arose.
Clauses that courts have found to clearly delegate all
threshold questions of contract formation and enforceability
included much more explicit language. (See Malone, supra, 226
Cal.App.4th at p. 1560 [“ ‘exclusive authority to resolve any
dispute relating to the interpretation, applicability, or
enforceability’ ”]; Tiri v. Lucky Chances, Inc. (2014) 226
Cal.App.4th 231, 237 [“exclusive authority to resolve any dispute
7
relating to the interpretation, applicability, enforceability, or
formation”].) Here, the parties chose not to include language
expressly delegating questions of applicability or enforceability to
the arbitrator. “The absence of such express language (or
extrinsic evidence to the same effect) therefore gives rise to the
inference that the parties did not consider the matter.” (Ajamian,
supra, 203 Cal.App.4th at p. 786; Beco, supra, 86 Cal.App.5th at
p. 304 [“ ‘dispute concerning the arbitrability of any such
controversy or claim’ ” did not clearly and unmistakably
encompass threshold questions of enforceability].)
In addition, the severability clause in the program further
supports our conclusion.2 That clause specified what should
happen if “any court” found any aspect of the program
unenforceable. “As a general matter, where one contractual
provision indicates that the enforceability of an arbitration
provision is to be decided by the arbitrator, but another provision
indicates that the court might also find provisions in the contract
unenforceable, there is no clear and unmistakable delegation of
authority to the arbitrator.” (Ajamian, supra, 203 Cal.App.4th at
p. 792.) As the parties recognize, several courts in this state have
reached this same conclusion where a severability clause
2 Northrop argues that Hokanson forfeited any argument
based on the severability clause by failing to raise it in the trial
court. Although Hokanson cited this clause for the first time on
appeal, this theory falls within the scope of Hokanson’s argument
below: that the program did not clearly and undisputedly
delegate threshold issues of arbitrability to the arbitrator. And
the facts are not in dispute. “[I]t is settled that a change in
theory is permitted on appeal when ‘a question of law only is
presented on the facts appearing in the record. . . .’ [Citation.]”
(Ward v. Taggart (1959) 51 Cal.2d 736, 742.)
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contemplated that a court might interpret the agreement. (Ibid.;
Dennison, supra, 47 Cal.App.5th at p. 209; Hartley, supra, 196
Cal.App.4th at p. 1258; Baker v. Osborne Development Corp.
(2008) 159 Cal.App.4th 884, 891.) The severability clause in the
program is therefore “inconsistent with the assumption” that all
threshold questions of arbitrability “must be determined by the
arbitrator,” further supporting the parties did not clearly
delegate such questions to the arbitrator. (Ajamian, at p. 792.)
Northrop cites several cases in which courts have concluded
that severability clauses referencing court involvement were not
inconsistent with an otherwise clear and unmistakable
delegation of specific threshold issues to the arbitrator. We find
these cases distinguishable, because the agreement in each case
expressly delegated to the arbitrator the resolution of the exact
issue raised by the party opposing arbitration. For example, in
B.D. v. Blizzard Entertainment, Inc. (2022) 76 Cal.App.5th 931,
the party opposing arbitration argued that the arbitration
agreement was unenforceable under the McGill rule3 because it
included a class action waiver provision. (Id. at p. 954.) But the
agreement in that case delegated to the arbitrator the power to
resolve any dispute over that specific clause. (Id. at p. 957.)
Similarly, in Bell v. Redfin Corporation (S.D. Cal., Aug. 12, 2021,
No. 20-cv-2264-AJB-AGS) 2021 WL 5444791, the plaintiff argued
that the arbitration agreement was unconscionable, and the
agreement expressly delegated to the arbitrator “questions of
3 “[A] provision in any contract . . . that purports to waive, in
all fora, the statutory right to seek public injunctive relief under
the UCL, the CLRA, or the false advertising law is invalid and
unenforceable under California law.” (McGill v. Citibank, N.A.
(2017) 2 Cal.5th 945, 962.)
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procedural and/or substantive unconscionability.” (Id. at *3.)
And in MegaCorp Logistics, LLC v. Turvo, Inc. (N.D. Cal., July
30, 2018, No. 18-cv-01240-EMC) 2018 WL 3619656, the opposing
party argued that the arbitration agreement did not apply to the
parties’ dispute, but the agreement specified that the arbitrator
would determine the “scope or applicability” of the agreement.
(Id. at *5.) In contrast, here, the program did not specifically
delegate to the arbitrator the threshold issue that Hokanson
identified. In the absence of such an express delegation, the
severability clause in this case creates ambiguity that did not
exist in Blizzard, Bell, or Megacorp.
Northrop also cites several cases involving severability
clauses that referenced court action in which the arbitration
agreements incorporated the JAMS or AAA arbitration rules.
Because both sets of rules require the arbitrator to resolve
threshold questions of arbitrability, courts have concluded that
this sort of incorporation reflects a clear and unmistakable intent
to delegate threshold questions to the arbitrator. Courts have
further reasoned that a severability clause referencing court
involvement does not contradict this clear and unmistakable
intent. (Sandler v. Modernizing Medicine, Inc. (9th Cir. 2026)
170 F.4th 1209, 1212–1213 [JAMS rules]; Taylor v. Shutterfly,
Inc. (N.D. Cal., Sept. 11, 2018, No. 18-cv-00266-BLF) 2018 WL
4334770, at *4 [AAA rules]; McLellan v. Fitbit, Inc. (N.D. Cal.,
Oct. 11, 2017, No. 3:16-cv-00036-JD) 2017 WL 4551484, at *2
[AAA rules].) Although the program in this case stated that the
arbitrator should use the rules of whatever tribunal the parties
selected for arbitration, it further specified that the provisions in
the program took precedence in the event of any conflict with the
tribunal’s rules. Thus, even if the arbitration was ultimately
10
conducted pursuant to the JAMS or AAA rules, the ambiguous
delegation clause in the program would take precedence over any
parallel provision in the tribunal’s rules.
Because the program did not clearly and unmistakably
delegate to the arbitrator all threshold questions of arbitrability,
the trial court should have resolved Hokanson’s argument that
the program had expired prior to his dispute with Northrop.
II. The arbitration program remained in effect at the
time of the parties’ dispute
We next consider whether, as Hokanson asserts, the 2013
version of Northrop’s arbitration program expired before the
parties’ dispute arose. We conclude that the program remained
in effect and governed all future disputes between the parties
relating to Hokanson’s employment or termination. Accordingly,
we affirm the order compelling arbitration.
A. Legal framework and standard of review
“The party seeking arbitration bears the burden of proving
the existence of an arbitration agreement . . . .” (Pinnacle
Museum Tower Assn. v. Pinnacle Market Development (US), LLC
(2012) 55 Cal.4th 223, 236 (Pinnacle).) We apply general
principles of contract law to determine whether an agreement to
arbitrate exists. (Ibid.) “If contractual language is clear and
explicit, it governs. [Citation.]” (Bank of the West v. Superior
Court (1992) 2 Cal.4th 1254, 1264 (Bank of the West).)
In this case, the facts relevant to this threshold issue are
not in dispute. Accordingly, our review is de novo. (Pinnacle,
supra, 55 Cal.4th at p. 236; cf. Peleg v. Neiman Marcus Group,
Inc. (2012) 204 Cal.App.4th 1425, 1445 [concluding trial court
erred by compelling arbitration of threshold issues of
11
arbitrability; resolving threshold argument that contract was
illusory for first time on appeal].)4
B. The 2013 program remained in effect as of the
parties’ 2018 dispute
Hokanson concedes that he signed an employment
agreement with Northrop in 2015, and there is no dispute that he
remained employed until late 2018. He also does not dispute that
this agreement required him to “submit disputes between
[himself] and [Northrop] to final and binding arbitration in
accordance with [the program], which is incorporated into this
agreement by reference.” The program covered all Northrop
employees who were employed on or after November 1, 2006, and
required all such employees “to submit any covered disputes to
binding arbitration, rather than to have such disputes heard by a
court or jury.” And, the program specifically required covered
4 Northrop argues that the matter should be remanded for
further proceedings, citing Carter v. California Dept. of Veterans
Affairs (2006) 38 Cal.4th 914. We do not agree. In Carter, the
trial court entered judgment in the plaintiff’s favor, and the court
of appeal reversed. (Id. at p. 919.) While the appeal was pending
before our Supreme Court, the Legislature amended the
applicable statute. (Id. at pp. 919–920.) The Supreme Court
remanded the matter to the court of appeal to determine in the
first instance whether the trial court ruling adequately addressed
the specific considerations itemized in the newly amended
statute. (Id. at pp. 930–931.) The court noted that remand was
appropriate “ ‘to permit further evidence to be taken or additional
findings to be made’ ” under the new legal framework. (Id. at p.
931.) This case involves no similar change in the law, and the
parties have not identified any basis for the trial court to consider
additional evidence on remand.
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employees to arbitrate “any claim, controversy, or dispute, past,
present, or future,” arising out of his or her employment with
Northrop or the termination of that employment. Together, this
“clear and explicit” language required Hokanson to arbitrate all
future disputes concerning his employment or termination.
(Bank of the West, supra, 2 Cal.4th at p. 1264.)
Hokanson notes that the 2013 version of the program was
“authorized by the Process Owner on 25 January 2013 for a
period of three years,” after which time the program “must be
reauthorized . . . .” Hokanson therefore argues that the 2013
version of the program expired in 2016, and that he did not agree
to arbitrate any dispute arising thereafter. We do not agree with
this interpretation. Although the program stated that it “must be
reauthorized” after three years, the language left ambiguous
what would happen if no reauthorization occurred. For example,
the program does not state that it would expire or otherwise
become ineffective after the three-year authorization period. We
may not “ ‘add a term to a contract about which the agreement is
silent.’ ” (Arriagarazo v. BMW of North America, LLC (2021) 64
Cal.App.5th 742, 748.) Relatedly, we must harmonize
contractual language unless it is irreconcilably inconsistent. (See
Civ. Code, § 1641; Southern Pacific Land Co. v. Westlake Farms,
Inc. (1987) 188 Cal.App.3d 807, 822.) As we have discussed, by
its plain language, the program required Hokanson to arbitrate
all “future” disputes with Northrop stemming from his
employment or termination, without temporal limitation.
Because the reauthorization requirement is somewhat
ambiguous, we decline to construe it as meaning that the
program would expire if not reauthorized, and we instead
construe the reauthorization language in harmony with the clear
13
requirement that Hokanson arbitrate all future disputes relating
to his employment.
Since the 2013 program applied to all future disputes, and
since Hokanson does not otherwise dispute that his lawsuit
against Northrop lawsuit is governed by the program, we affirm
the order compelling arbitration.5
Finally, Hokanson also asks this court to reverse the order
confirming the arbitration award because the arbitrator lacked
jurisdiction. This argument is entirely contingent on the success
of Hokanson’s challenge to the court’s order compelling
arbitration. Because we affirm that order, we also affirm the
order confirming the award and the resulting judgment.
5 The parties also dispute whether subsequent
reauthorizations of the program governed Hokanson’s dispute
with Northrop. The employment agreement specified that
Hokanson would be bound by any modification to the program,
but only if he received advanced notice thereof. Hokanson
asserts that there is no evidence that he received such notice. We
need not resolve this dispute. As we have discussed, the plain
terms of the 2013 program required Hokanson to arbitrate any
“future” dispute with Northrop relating to his employment or
termination. Accordingly, even assuming that subsequent
reauthorizations did not supersede the 2013 version of the
program, the 2013 version remained in effect and governed
Hokanson’s 2018 dispute with Northrop.
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DISPOSITION
We affirm the order. The parties shall bear their own
appellate costs.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
HANASONO, J.
We concur:
ADAMS, P. J.
KARNOW, J.*
* Retired Judge of the San Francisco Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.
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