Rivera v. Flagship Facility Services CA6

Filed 6/26/26 Rivera v. Flagship Facility Services CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

MA AZUCENA VARGAS RIVERA, H052759
(Santa Clara County
Plaintiff and Respondent, Super. Ct. No. 23CV421827)

v.

FLAGSHIP FACILITY SERVICES,
INC., et al.,

Defendants and Appellants.

Plaintiff Ma Azucena Vargas Rivera filed a putative wage and hour class action
against her former employer, defendant Flagship Facility Services, Inc., and three affiliated
entities, defendants Flagship Enterprises Holding, Inc.; Flagship Sweeping Services, Inc.;
and Flagship Airport Services, Inc. Defendants moved to compel arbitration of plaintiff’s
individual claims, dismiss the class claims, and stay the action. Defendants’ motion was
based on a dispute resolution agreement, which plaintiff signed during the new hire process.
The agreement required binding arbitration of employment related disputes and required the
employee to waive the right to bring a class action.
The trial court denied the motion in its entirety. The court determined that the
dispute resolution agreement was unconscionable, that severance of the multiple
problematic provisions was not appropriate, and that the entire agreement was therefore
unenforceable. Based on the unenforceability of the agreement, the court determined that
the class action waiver contained in the agreement could not be enforced, and consequently
denied defendants’ motion to dismiss the class claims.
On appeal, defendants contend that the trial court erred in denying their motion.
They argue that the Federal Arbitration Act’s (FAA; 9 U.S.C. § 1 et seq.) procedural
provisions, in addition to its substantive provisions, apply to the parties’ dispute resolution
agreement; that the agreement was not unconscionable; and that, in any event, any
problematic provisions should have been severed and the remainder of the agreement
enforced.
For reasons that we will explain, we determine that a single confidentiality provision
in the dispute resolution agreement is unconscionable, but that after severance of the
provision the agreement is enforceable. Therefore, we will reverse the trial court’s order
denying defendants’ motion and remand the matter with directions to (1) sever the dispute
resolution agreement’s confidentiality provision, and (2) grant defendants’ motion to
compel arbitration, dismiss the class claims, and stay the proceedings.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. Dispute Resolution Agreement
The dispute resolution agreement at issue in this case is a standalone four-page
arbitration agreement. On the first page, at the top, there is a box with the following three
sentences: “This Dispute Resolution Agreement is a contract and covers important issues
relating to your rights. It is your sole responsibility to read it and understand it. You are
free to seek assistance from independent advisors of your choice outside the Company or to
refrain from doing so if that is your choice.” (Boldface omitted.) Underneath this
statement, within the same box, is a translation of the three sentences in Spanish and in
another language. The remainder of the agreement is in English.
The dispute resolution agreement states that it is “governed by the Federal
Arbitration Act, 9 U.S.C. § 1 et seq. and evidences a transaction involving commerce.” The
agreement provides for “final and binding arbitration” for “any legal dispute arising out of

2
or related to” an individual’s employment with Flagship Enterprises Holding, Inc. or its
affiliates.
Regarding the class action waiver, the dispute resolution agreement states, “Private
attorney general representative actions are not arbitrable, not within the scope of this
Agreement and may be maintained in a court of law. However, you and the Company agree
to bring any dispute in arbitration on an individual basis only, and not on a class or
collective action basis. Accordingly, [¶] . . . [t]here will be no right or authority for any
dispute to be brought, heard or arbitrated as a class action (‘Class Action Waiver’). The
Class Action Waiver shall be severable from this Agreement in any case in which (1) the
dispute is filed as a class action and (2) there is a final judicial determination that the Class
Action Waiver is invalid, unenforceable, unconscionable, void or voidable. In such
instances, the class action must be litigated in a civil court of competent jurisdiction.
[¶] . . . [¶] . . . Notwithstanding any other clause contained in this Agreement, any claim
that all or part of the Class Action Waiver or Collective Action Waiver is invalid,
unenforceable, unconscionable, void or voidable may be determined only by a court of
competent jurisdiction and not by an arbitrator.” (Boldface omitted.)
The dispute resolution agreement includes a confidentiality provision as follows:
“Except as may be permitted or required by law, as determined by the Arbitrator, neither a
party nor an Arbitrator may disclose the existence, content, or results of any arbitration
hereunder without the prior written consent of all parties.”
Regarding discovery in arbitration, the dispute resolution agreement states, “In
arbitration, the parties will have the right to conduct adequate civil discovery, bring
dispositive motions, and present witnesses and evidence as needed to present their cases and
defenses, and any disputes in this regard shall be resolved by the Arbitrator. At a party’s
request or on the Arbitrator’s own initiative, the Arbitrator may subpoena witnesses or
documents for discovery purposes or for the arbitration hearing.”

3
The dispute resolution agreement indicates that it was in addition to other internal
company complaint resolution procedures that existed at the time. In this regard the
agreement states, “Nothing contained in this Agreement shall be construed to prevent or
excuse you (individually or in concert with others) or the Company from utilizing the
Company’s existing internal procedures for resolution of complaints, and this Agreement is
not intended to be a substitute for the utilization of such procedures.”
The dispute resolution agreement allowed employees to opt out of arbitration. The
agreement states, “Arbitration is not a mandatory condition of your employment at the
Company, and therefore you may submit a statement notifying the Company that you wish
to opt out and not be subject to this Agreement. If you want to opt out, you must notify the
Company of your intention to opt out by submitting a signed and dated statement on a
‘Dispute Resolution Agreement Opt Out Form’ that can be obtained from and returned to
the Company’s Human Resources Department . . . or by submitting to Human Resources a
written notice stating that you are opting out of this Agreement. In order to be effective,
your opt out notice must be provided within 30 days of your receipt of this Agreement. If
you timely opt[] out as provided in this paragraph, you will not be subject to any adverse
employment action as a consequence of that decision and may pursue available legal
remedies without regard to this Agreement. Should you not opt out of this Agreement
within 30 days of your receipt of this Agreement, continuing your employment constitutes
mutual acceptance of the terms of this Agreement by you and the Company. You have the
right to consult with counsel of your choice concerning this Agreement.” (Boldface &
underscoring omitted.)
The dispute resolution agreement also provides for severability as follows: “In
addition to as stated . . . [regarding the class action waiver], . . . in the event any portion of
this Agreement is deemed unenforceable, the remainder of this Agreement will be
enforceable.”

4
B. Plaintiff’s Putative Class Action Complaint
Plaintiff filed a putative class action complaint against defendants as her “joint
employers.” She alleges 10 causes of action for Labor Code and wage order violations,
including failure to pay all wages owed, permit meal or rest periods, provide accurate wage
statements, and indemnify for necessary expenditures. Based on the alleged Labor Code
violations, plaintiff also alleges an eleventh cause of action for violation of the unfair
competition law (Bus. & Prof. Code, § 17200, et seq.).

C. Defendants’ Motion to Compel Arbitration, Dismiss Class Claims, and Stay
Action
Defendants filed a motion to compel arbitration of plaintiff’s individual claims,
dismiss the class claims, and stay the action. The motion was based on the written “dispute
resolution agreement” that defendants contended plaintiff had signed on her first day of
work in December 2018. (Capitalization omitted.) Defendants contended that the FAA
governed the parties’ agreement, that the agreement covered plaintiff’s employment related
claims, and that the agreement was not unconscionable. Defendants further argued that
based on the class action waiver, the putative class claims should be dismissed while
plaintiff’s individual claims were subject to arbitration.
In support of the motion, defendants provided a declaration from the senior director
of human resources operations (human resources director) of defendant Flagship Facility
Services, Inc.1 The human resources director had been employed in various human
resources positions at the company for more than 10 years. According to the human
resources director, Flagship Facility Services, Inc. provided “facilities management services,
including janitorial services” to different companies throughout the United States.
Plaintiff’s personnel file reflected that she was employed by Flagship Facility Services, Inc.

1
The original declaration was not made under penalty of perjury. An amended
declaration signed by the human resources director under penalty of perjury was later filed
by defendants.

5
from December 2018 to February 2023. Flagship Facility Services, Inc. and the other three
Flagship defendants were “all affiliated entities.”
The human resources director stated that new employees were “presented with”
defendants’ policies and procedures during the “onboarding” process. When plaintiff was
hired, she was “presented with a physical copy of Flagship’s new hire documents,”
including the dispute resolution policy. According to the human resources director,
“[d]uring onboarding, . . . [h]uman [r]esources staff discuss each policy with the new hires,”
including the dispute resolution agreement. “New hires are then given as much time as they
need to review the [dispute resolution agreement] and ask any questions they might have.”
When plaintiff was hired in 2018, new employees signed the last page of the dispute
resolution agreement if they agreed with the terms. According to the human resources
director, plaintiff’s personnel file contained the signed agreement “bearing [her] signature at
the time of her hire.” A copy of the signed dispute resolution agreement was attached to the
human resource director’s declaration. The human resources director searched but did not
find any opt-out form from plaintiff.
The human resources director further stated that plaintiff was a member of a union
that had entered into a collective bargaining agreement with defendant Flagship Facility
Services, Inc. effective May 1, 2020 to 2024. A copy of the collective bargaining agreement
was attached to the human resource director’s declaration. The collective bargaining
agreement with attached appendices was nearly 150 pages.
D. Plaintiff’s Opposition
In opposition, plaintiff contended that she did not assent to the arbitration agreement
because, among other reasons, she was a Spanish speaker who was not literate in English.
She also argued that the arbitration agreement was unconscionable. Regarding procedural
unconscionability, plaintiff contended that she could not read English, was not shown the
arbitration agreement, was not informed about it, and was not told she could opt out.
Further, the agreement was apparently presented with other employment documents, and

6
she was not given a copy to take home to obtain assistance. Plaintiff argued that the
agreement used 10.5-point font, was single-spaced, contained more than 2,300 words, used
complex sentences, and had numerous statutory references along with legal jargon, all of
which made the agreement “entirely incomprehensible to a layperson.” She also contended
the arbitration agreement was substantively unconscionable with respect to the class action
waiver, the confidentiality provision, the purported authority to issue subpoenas for third
party discovery, and the reference to other, unspecified internal dispute resolution
procedures. Plaintiff argued that the defects in the agreement could not be cured by
severance and therefore the agreement should not be enforced.
Plaintiff stated in a declaration2 in opposition to the motion that she was a “custodial
worker” employed by Flagship Facility Services, Inc. from approximately January 2019,
until February 2023. Plaintiff was literate in Spanish only. She had “very little ability to
read, write, speak, or understand English with the exception of a handful of words.”
During the “onboarding process” for her job in 2018, a Spanish interpreter explained
tax documents and “informed [plaintiff] that [she] needed to sign it.” Plaintiff “was directed
to sign one or more documents, which [she] believe[s] were tax documents relating to
dependents.” She was not given a copy of that document or any other document and was
not permitted to take any document home before signing it.
The interpreter then explained “other documents relating to employment rules such
as harassment and discipline,” but the documents were not shown to plaintiff and she was
not given a copy. Plaintiff did not recall signing any of these documents.
Plaintiff had “no recollection” of seeing the dispute resolution agreement during the
onboarding process or otherwise during her employment, was not given a copy, would not
have been able to read or understand the body of the document without a translation, and
was not informed that she was signing or agreeing to an arbitration agreement. She also was

2
Plaintiff executed the declaration in Spanish. She also filed an English translation
of the declaration by a certified interpreter.

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not provided with an explanation of arbitration during the onboarding process. Plaintiff
stated that although the signature on the document “bears a slight resemblance to [her]
signature,” she does “not believe it is [her] signature.” She further stated that she was not
informed she could opt out of an arbitration agreement, and that she would have opted out if
she had been informed.
E. Defendants’ Reply
In reply, defendants contended that plaintiff’s “self-serving” declaration was
insufficient to create a factual dispute regarding the authenticity of her signature or the
authenticity of the dispute resolution agreement. Second, her inability to read or understand
the signed agreement did not prevent its enforcement. Third, the agreement was not
procedurally unconscionable because it was written in “plain language,” only four pages in
length, and in a readable font. Further, plaintiff was given as much time as she wanted to
read it, to show it to anyone, and to ask questions. Fourth, the agreement was not
substantively unconscionable.
F. Plaintiff’s Second Civil Action Against Defendants
In the meantime, a few months after plaintiff filed the putative wage and hour class
action for Labor Code violations against defendants, she filed a second civil action against
defendants, alleging a single cause of action under the Labor Code Private Attorneys
General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.). In response, defendants filed a
motion to compel arbitration of plaintiff’s individual PAGA claim and to dismiss her
representative PAGA claim. Regarding the representative PAGA claim, defendants
contended that plaintiff was “exempt from PAGA” based on Labor Code section 2699.8,
which provides that PAGA does not apply to janitorial employees working under a
collective bargaining agreement in specified circumstances.
Plaintiff opposed the motion in the PAGA action in a single “consolidated”
opposition that also addressed defendants’ motion to compel arbitration in the putative class

8
action. (Boldface & capitalization omitted.) Plaintiff contended that defendants failed to
meet their burden of showing that the PAGA exemption applied.
In reply, defendants referred to a collective bargaining agreement that applied to
plaintiff. A copy of the collective bargaining agreement was attached to the human
resources director’s declaration filed in the putative class action.3
G. Trial Court’s Order
A combined hearing was held on defendants’ motions to compel arbitration in the
putative class action and in the PAGA case. The trial court issued a single written order
denying the motion to compel arbitration, dismiss the class claims, and stay the proceedings
in the putative class action, and granting the motion to dismiss the representative PAGA
claim in the PAGA action. Relevant to this appeal in the putative class action case, the
court determined that the FAA applied, but that California law governed the procedure. The
court found that plaintiff had signed the dispute resolution agreement and therefore an
arbitration agreement existed between the parties.
However, the trial court found the dispute resolution agreement was unconscionable
and declined to enforce it. The trial court determined that there was “a high degree of
procedural unconscionability” in the circumstances of plaintiff’s agreement to the contract.
The court found the dispute resolution agreement to be an adhesive contract. It was on a
preprinted form and was included as a part of plaintiff’s new hire paperwork. Although the
agreement contained an opt out clause, plaintiff’s uncontradicted declaration established that
she was not given a copy of the agreement, she was not informed about its content, she
could not read the substantive provisions which were in English, and she was told that she
“ ‘needed’ ” to sign other new hire paperwork. Further, although a Spanish interpreter was
present, the interpreter did not explain the agreement to plaintiff, and there was no evidence

3
The record on appeal does not contain the separate record from the PAGA action.
The limited information we have regarding the PAGA action is based on references to that
action contained in the record on appeal for the putative class action.

9
that she was given the opportunity to review the document, request a copy, or consult with
others before signing.
On these issues, the court found that the human resources director did “not provide[]
sufficient facts from which the court could conclude that he has personal knowledge of the
actual circumstances of [p]laintiff’s onboarding. Additionally, [p]laintiff . . . provided
uncontradicted evidence that she was not told she was signing an arbitration agreement.”
The court determined that although some of the new hire paperwork was translated, the
arbitration agreement was not. “Thus, the content of the arbitration agreement was
essentially hidden from [p]laintiff.” The court also found that the agreement, “which
contains numerous references to various laws, would be difficult to decipher by a
layperson.”
The trial court also determined that the dispute resolution agreement contained
multiple substantively unconscionable provisions. First, the class action waiver was one-
sided, applying only to employees. Second, confidentiality provisions, as in this case,
usually benefit only the employer and may inhibit the plaintiff employee’s ability to
communicate with potential witnesses or otherwise prove the employee’s case. Third,
although the agreement authorizes the arbitrator to issue third party subpoenas, the FAA
prohibits it and therefore the subpoena power is unavailable. Fourth, the requirement that
both parties utilize existing internal dispute resolution procedures “binds” the parties “to an
informal resolution procedure that [was] not described in the agreement and that
[d]efendants control.”
Lastly, although the agreement contained a severability clause, the trial court
declined to sever the unconscionable provisions “in light of the high degree of procedural
unconscionability it ha[d] found.” Because the dispute resolution agreement was
unenforceable, the court determined that the class action waiver contained within the
agreement was also unenforceable. The court therefore denied the request to dismiss the
class claims.

10
Regarding the PAGA action, the trial court dismissed plaintiff’s representative
PAGA claim. The court found, based on the collective bargaining agreement governing
plaintiff and other undisputed evidence, that Labor Code section 2699.8 precluded her
representative PAGA claim.
Defendants filed a timely notice of appeal from the order denying their motion to
compel arbitration, dismiss the class claims, and stay the proceedings in the putative class
action.4
II. DISCUSSION
Defendants contend that the trial court erred in denying their motion to compel
arbitration, dismiss the class claims, and stay the action. They argue that the FAA’s
procedural provisions, in addition to its substantive provisions, apply to the parties’ dispute
resolution agreement; that the agreement was not unconscionable; and that in any event, any
problematic provisions should have been severed and the remainder of the agreement
enforced. For the first time on appeal, defendants also argue that an arbitration provision
contained in the collective bargaining agreement between plaintiff’s union and them applies
in this case and requires arbitration of plaintiff’s individual claims and dismissal of the class
claims.
A. Governing Agreement
To determine whether the trial court erred in denying defendants’ motion to compel
arbitration, we must first determine the operative arbitration agreement – the
December 2018 dispute resolution agreement signed by plaintiff at the outset of her
employment, and/or the May 2020 collective bargaining agreement between plaintiff’s
union and defendants. The record reflects that defendants, in moving to compel arbitration,
relied solely on the earlier December 2018 dispute resolution agreement. The trial court

4
Code of Civil Procedure section 1294, subdivision (a) provides that a party may
appeal from an order denying a petition to compel arbitration.

11
found that plaintiff signed this agreement, but that the agreement was unconscionable and
unenforceable.
Defendants now contend for the first time on appeal that plaintiff is also bound by an
arbitration provision contained in the later May 2020 collective bargaining agreement.
Specifically, defendants argue that one of the appendices to the collective bargaining
agreement, at page 132, contains an arbitration clause covering plaintiff’s claims in this
case. In response, plaintiff contends that defendants waived this issue by failing to raise it in
the trial court. In reply, defendants do not dispute that they failed to argue this issue in the
trial court. They contend, however, that they were not required to argue the issue and
instead were only required to provide evidence of the agreement, which they accomplished
by attaching a copy of the collective bargaining agreement to the human resource director’s
declaration. Further, defendants contend that a new theory based on undisputed facts may
be raised for the first time on appeal.
We determine that defendants may not rely on the collective bargaining agreement as
a basis for their contention that the trial court erred in denying their motion to compel
arbitration or that plaintiff’s claims must be compelled to arbitration. First, defendants’
motion to compel arbitration was based solely on the dispute resolution agreement, not the
collective bargaining agreement. (See Engineers & Architects Assn. v. Community
Development Dept. (1994) 30 Cal.App.4th 644, 653 [“The right to arbitration depends upon
contract; a petition to compel arbitration is simply a suit in equity seeking specific
performance of that contract”].) The record reflects that the collective bargaining agreement
was the basis for defendants’ contention in plaintiff’s separate PAGA action that she could
not pursue a representative PAGA claim under Labor Code section 2699.8, which provides
that PAGA does not apply to janitorial employees working under a collective bargaining
agreement in specified circumstances. Defendants simply did not move to compel
arbitration in the trial court in the instant case based on the collective bargaining agreement.

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Second, defendants’ act of attaching a copy of the collective bargaining agreement to
the human resources director’s declaration, without raising or arguing in their motion papers
that the issue of the collective bargaining agreement’s arbitration clause required plaintiff to
arbitrate her claims, was not sufficient to preserve the issue for appeal. Indeed, the cases
cited by defendants themselves indicate that pursuant to Code of Civil Procedure
section 1281.2, the party petitioning to compel arbitration must “alleg[e] the existence of a
written agreement to arbitrate . . . .” (See Espejo v. Southern California Permanente
Medical Group (2016) 246 Cal.App.4th 1047, 1057; Rosenthal v. Great Western Fin.
Securities Corp. (1996) 14 Cal.4th 394, 413; Condee v. Longwood Management Corp.
(2001) 88 Cal.App.4th 215, 218.) In this case, defendants never alleged or argued in the
trial court that the collective bargaining agreement formed the basis for compelling plaintiff
to arbitrate her claims. Further, it is well established that “ ‘[a]ll issues . . . are subject to the
rule of forfeiture, and a [party’s] failure to raise the issue before the trial court will generally
result in the appellate court’s refusal to consider it.’ [Citation.] Considering an issue for the
first time on appeal is often unfair to the trial court, unjust to the opposing party, and
contrary to judicial economy because it encourages the embedding of reversible error
through silence in the trial court.” (In re M.H. (2016) 1 Cal.App.5th 699, 713-714; see
Johnson v. Greenelsh (2009) 47 Cal.4th 598, 603 [stating that “ ‘issues not raised in the trial
court cannot be raised for the first time on appeal’ ”].)
Third, we are not persuaded by defendants’ contention that the issue involves a
question of law on undisputed facts and no unfairness would occur in this case. According
to defendants, plaintiff did not dispute in the trial court the enforceability of the collective
bargaining agreement and therefore the issue of whether the agreement requires arbitration
of her claims may be presented for the first time on appeal. “[A]n appellate court may allow
an appellant to assert a new theory of the case on appeal where the facts were clearly put at
issue at trial and are undisputed on appeal. [Citation.] However, ‘if the new theory
contemplates a factual situation the consequences of which are open to controversy and

13
were not put in issue or presented at trial the opposing party should not be required to
defend against it on appeal. [Citations.]’ [Citation.]” (Richmond v. Dart Industries, Inc.
(1987) 196 Cal.App.3d 869, 879.)
In this instance, it does not appear that the enforceability of the collective bargaining
agreement’s arbitration clause and whether it encompassed plaintiff’s claims were raised as
factual or legal matters in the trial court. Instead, the existence of the collective bargaining
agreement was apparently raised in connection with the separate PAGA action on a
different issue. Defendants’ motion to compel arbitration in this case was based exclusively
on a completely different agreement—the dispute resolution agreement. The arbitration-
related provisions now cited by defendants in this court are buried in a more than 100-page
collective bargaining agreement with appendices. We thus are troubled that defendants
contend that plaintiff failed to contest the enforceability or applicability of the collective
bargaining agreement’s arbitration clause, and that the trial court “failed to decide . . . in the
first instance” whether plaintiff should be compelled to arbitrate under the collective
bargaining agreement, where defendants themselves never thought to locate and identify the
relevant provisions and raise the issue in the trial court. (Italics added.)
Further, even if the existence or enforceability of the arbitration clause in the
collective bargaining agreement raises only a legal issue on undisputed facts, we decline to
consider this new theory on appeal as a basis for compelling arbitration of plaintiff’s claims.
“Merely because an issue is one of law, does not give a party license to raise it for the first
time on appeal . . . . Whether an appellate court will entertain a belatedly raised legal issue
always rests within the court’s discretion. [Citation.]” (Farrar v. Direct Commerce,
Inc. (2017) 9 Cal.App.5th 1257, 1275, fn. 3; Richmond, supra, at p. 879; see Greenwich
S.F., LLC v. Wong (2010) 190 Cal.App.4th 739, 767 [explaining that an appellate court has
the discretion, but is not required, to consider a new theory on appeal even if it raises a pure
question of law]; Ramirez v. Department of Motor Vehicles (2023) 88 Cal.App.5th 1313,
1335 [stating that “an appellate court is under no mandatory duty to consider ‘forfeited

14
arguments that raise pure questions of law’ ”].)5 Given that defendants’ notice of motion
and motion to compel arbitration were based solely on the arbitration clause in the dispute
resolution agreement, we decline to exercise our discretion to entertain their new appellate
argument.
We therefore turn to the question of whether the trial court erred in denying
defendants’ motion to compel arbitration based on the arbitration clause contained in the
parties’ dispute resolution agreement.
B. Whether Federal or State Procedural Provisions Apply
On appeal, defendants contend that the procedural provisions of the FAA apply in
this case, and that the trial court erred in determining in a footnote that the procedure in this
case was governed by California law.
“The FAA governs agreements in contracts involving interstate commerce . . . .
[Citations.]” (Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1351
(Cable Connection).) Section 2 of the FAA provides in part that “[a] written provision
in . . . a 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 . . . .” (9 U.S.C. § 2.) This statute, “declaring the enforceability
of arbitration agreements, ‘create[s] a body of federal substantive law of arbitrability,
applicable to any arbitration agreement within the coverage of the Act.’ [Citation.]” (Id. at
pp. 1350-1351.)
Generally, the FAA’s procedural provisions do not apply in state court proceedings.
(Cable Connection, supra, 44 Cal.4th at p. 1351.) Instead, the procedural rules of the

5
We also note that plaintiff’s complaint in the instant case alleges some claims
arising at least four years prior to the filing of the complaint, that is, claims arising as early
as August 2019. The record reflects, however, that the collective bargaining agreement was
not in effect until May 2020.

15
California Arbitration Act (CAA; Code Civ. Proc., § 1280 et seq.) “apply by default to cases
brought in California courts, including those in which the FAA governs the arbitrability of
the controversy.” (Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 582
(Quach).) However, “the FAA’s procedural rules may apply if the parties expressly agree
they do or if the CAA’s procedural rules are preempted. [Citations.]” (Ibid.)
“[W]e examine the language of the contract to determine whether the parties intended
to apply the FAA to the exclusion of California procedural law . . . .” (Cronus Investments,
Inc. v. Concierge Services (2005) 35 Cal.4th 376, 383.) We review this issue de novo when
there is no conflicting extrinsic evidence. (Nixon v. AmeriHome Mortgage Co., LLC (2021)
67 Cal.App.5th 934, 946.)
In this case, the parties’ dispute resolution agreement states that it is “governed by
the Federal Arbitration Act, 9 U.S.C. § 1 et seq. and evidences a transaction involving
commerce.” Based on this language alone, defendants contend that the parties’ agreement
therefore “encompass[ed] both substantive and procedural provisions of the FAA.”6
We are not persuaded by defendants’ contention. First, regarding the agreement’s
reference to “a transaction involving commerce,” assuming this language implies the
application of the FAA (see Cable Connection, supra, 44 Cal.4th at p. 1351 [“FAA governs
agreements in contracts involving interstate commerce”), generally “the CAA’s procedural

6
Defendants do not provide a record citation showing that they expressly argued in
the trial court that the procedural provisions of the FAA applied in this case instead of the
CAA’s procedural rules. It appears defendants only generally argued in their motion to
compel arbitration that the FAA “governed” or “controls” in this case. Further, although
defendants in their motion cited a case with a parenthetical indicating that a contract must be
examined to determine whether the parties intended to apply the FAA to the exclusion of
California procedural law, their motion also cited to Code of Civil Procedure section 1281.2,
which is part of the CAA. Given that defendants did not expressly argue for application of
the FAA’s procedural provisions and indeed cited a procedural provision of the CAA, it is
not surprising that the trial court indicated that the CAA’s procedural rules applied in this
case.

16
rules apply by default to cases brought in California courts, including those in which the
FAA governs the arbitrability of the controversy.” (Quach, supra, 16 Cal.5th at p. 582.)
Second, in Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899 (Sanchez),
the arbitration agreement stated, “Any arbitration under this Arbitration Clause shall be
governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.) and not by any state law
concerning arbitration.” (Id. at p. 908, italics added.) Regarding this language, the
California Supreme Court explained that “[a]lthough the arbitration agreement . . . provides
that the arbitration is to be governed by the FAA and not California law, generally the
California Arbitration Act governs arbitral procedures brought in California courts.” (Id. at
p. 922.) In the present case, in view of Sanchez, defendants fail to persuasively demonstrate
that the “governed by” language in the parties’ dispute resolution agreement requires the
application of the FAA’s procedural provisions.
Accordingly, we determine that the trial court did not err in finding that California
law governed the procedure in this case.
C. Unconscionability
1. General legal principles and standard of review
“ ‘[G]enerally applicable contract defenses, such as . . . unconscionability, may be
applied to invalidate arbitration agreements without contravening’ the FAA. [Citations.]”
(Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012)
55 Cal.4th 223, 246 (Pinnacle).) “Unconscionability consists of both procedural and
substantive elements.” (Id. at p. 246.) “ ‘ “The prevailing view is that [procedural and
substantive unconscionability] must both be present in order for a court to exercise its
discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.”
[Citation.] But they need not be present in the same degree. . . . [T]he more substantively
oppressive the contract term, the less evidence of procedural unconscionability is required to
come to the conclusion that the term is unenforceable, and vice versa.’ [Citation.]”
(Sanchez, supra, 61 Cal.4th at p. 910, italics omitted.) “The ultimate issue in every case is

17
whether the terms of the contract are sufficiently unfair, in view of all relevant
circumstances, that a court should withhold enforcement.” (Id. at p. 912.)
“In resolving a claim of unconscionability, a court’s inquiry is whether the contract
provision was unconscionable at the time it was made. [Citation.]” (Prima Donna
Development Corp. v. Wells Fargo Bank, N.A. (2019) 42 Cal.App.5th 22, 37 (Prima Donna
Development).) The party opposing arbitration bears the burden of proving the defense of
unconscionability. (Pinnacle, supra, 55 Cal.4th at pp. 236, 247.)
“On appeal from the denial of a motion to compel arbitration, ‘[u]nconscionability
findings are reviewed de novo if they are based on declarations that raise “no meaningful
factual disputes.” [Citation.] However, where an unconscionability determination “is based
upon the trial court’s resolution of conflicts in the evidence, or on the factual inferences
which may be drawn therefrom, we consider the evidence in the light most favorable to the
court’s determination and review those aspects of the determination for substantial
evidence.” [Citation.]’ ” (Lhotka v. Geographic Expeditions, Inc. (2010) 181 Cal.App.4th
816, 820-821; accord, Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 493
(Ramirez); NORCAL Mutual Ins. Co. v. Newton (2000) 84 Cal.App.4th 64, 71 [“we must
‘ “accept the trial court’s resolution of disputed facts when supported by substantial
evidence; we must presume the court found every fact and drew every permissible inference
necessary to support its judgment, and defer to its determination of the credibility of
witnesses and the weight of the evidence” ’ ”].)
We review de novo a trial court’s interpretation of the law. (Contreras v. Superior
Court (2021) 61 Cal.App.5th 461, 468.) In addition, the interpretation of a contract “ ‘when
it is based on the words of the instrument alone’ ” or “ ‘when there is no conflict in the
extrinsic evidence’ ” is a question of law subject to de novo review. (Oakland-Alameda
County Coliseum Authority v. Golden State Warriors, LLC (2020) 53 Cal.App.5th 807, 818-
819; see Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419, 1425.)

18
2. Procedural unconscionability
Consistent with the Supreme Court’s guidance in Pinnacle and Sanchez, we first
consider whether the dispute resolution agreement is procedurally unconscionable. “The
procedural element addresses the circumstances of contract negotiation and formation,
focusing on oppression or surprise due to unequal bargaining power. [Citation.]”
(Pinnacle, supra, 55 Cal.4th at p. 246.) “ ‘ “Oppression occurs where a contract involves
lack of negotiation and meaningful choice, surprise where the allegedly unconscionable
provision is hidden within a prolix printed form.” ’ [Citation.]” (Id. at p. 247.) The
procedural “element is generally established by showing the agreement is a contract of
adhesion . . . .’ [Citation.]” (Ramirez, supra, 16 Cal.5th at p. 492.) “An adhesive contract
is standardized, generally on a preprinted form, and offered by the party with superior
bargaining power ‘on a take-it-or-leave-it basis.’ [Citation.] Arbitration contracts imposed
as a condition of employment are typically adhesive [citations] . . . .” (OTO, L.L.C. v. Kho
(2019) 8 Cal.5th 111, 126 (OTO).)
“ ‘The circumstances relevant to establishing oppression include, but are not limited
to (1) the amount of time the party is given to consider the proposed contract; (2) the
amount and type of pressure exerted on the party to sign the proposed contract; (3) the
length of the proposed contract and the length and complexity of the challenged provision;
(4) the education and experience of the party; and (5) whether the party’s review of the
proposed contract was aided by an attorney.’ [Citation.]” (OTO, supra, 8 Cal.5th at
pp. 126-127.)
The California Supreme Court has “explained that there are ‘ “degrees of procedural
unconscionability. At one end of the spectrum are contracts that have been freely negotiated
by roughly equal parties, in which there is no procedural unconscionability. . . . Contracts
of adhesion that involve surprise or other sharp practices lie on the other end of the
spectrum. [Citation.] Ordinary contracts of adhesion, although they are indispensable facts
of modern life that are generally enforced [citation], contain a degree of procedural

19
unconscionability even without any notable surprises, and ‘bear within them the clear
danger of oppression and overreaching.’ [Citation.]” ’ [Citations.] Courts ‘must be
“particularly attuned” to this danger in the employment setting, where “economic pressure
exerted by employers on all but the most sought-after employees may be particularly
acute.” ’ [Citations.] Thus, although 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.” (Ramirez, supra, 16 Cal.5th at pp. 493-
494.)
On appeal, defendants contend there was no procedural unconscionability.
Defendants argue that the dispute resolution agreement had an opt-out provision that
specifically stated in boldface that arbitration was “not a mandatory condition” of
employment. (Boldface omitted.) Defendants contend that plaintiff’s inability to read
English does not establish surprise for purposes of procedural unconscionability and that
plaintiff had the obligation to read it or have it explained to her. Further, an interpreter was
provided for her. In addition, the agreement itself instructed in Spanish that it was a
contract, contained important information about her rights, that plaintiff had the sole
responsibility to read and understand it, and that she could obtain assistance from an outside
advisor of her choice. Defendants describe the agreement as being “only four pages long”
with “easy-to-read font” and “informative headings.” According to defendants, plaintiff
“was under no time pressure,” could have had the interpreter read the agreement “to her as
many times as she wished,” and could have shown the agreement to anyone, including an
attorney.
We determine that substantial evidence supports the trial court’s finding that the
agreement as presented to plaintiff was characterized by procedural unconscionability. The
evidence reflects that the dispute resolution agreement was adhesive in nature and that other
facts further demonstrate oppression. The agreement was on a preprinted form, offered by
an employer with greater bargaining power over an employee, and was provided during the

20
onboarding process where the circumstances indicated that the employee needed to sign the
agreement to work for the employer. (See OTO, supra, 8 Cal.5th at pp. 126, 127.) On this
latter point, plaintiff was told during the onboarding process that she needed to sign certain
new hire paperwork, and the dispute resolution agreement was given to her to sign during
this process. (See Gentry v. Superior Court (2007) 42 Cal.4th 443, 472 [determining that,
given the inequality and the economic power wielded by the employer, “it is likely that
Circuit City employees felt at least some pressure not to opt out of the arbitration
agreement”].)
The agreement itself was four pages long and densely worded. Further, defendants
knew that plaintiff could not read the dispute resolution agreement’s substantive provisions
in English, including the opt-out provision, given that they provided an interpreter for other
documents, yet they did not provide a translation of the substantive portion of the dispute
resolution agreement either by the interpreter or in the agreement itself. Instead, the few
sentences of the agreement that were in Spanish informed plaintiff that it was her “sole
responsibility” to read and understand it, and that she could seek independent advice about
the agreement “outside the Company.” Consistent with these sentences in Spanish, the
company-provided interpreter did not translate the remainder of the agreement to plaintiff.
Plaintiff was not permitted to take the agreement home before signing it, and she was not
given a copy of the agreement after signing, which would have provided her the opportunity
to seek independent consultation or translation outside of the company, and an opportunity
to consider opting out of the agreement in the timeframe and manner specified in the
agreement. (See OTO, supra, 8 Cal.5th at pp. 127-128 [finding oppression based on, among
other factors, the employer’s failure to provide a copy of the signed agreement].)
The evidence also supports the trial court’s finding of surprise. As we have just
explained, although an interpreter was present during the onboarding process to translate
some of the new hire documents, no oral translation was provided of the dispute resolution
agreement. Further, although the dispute resolution agreement contained a few sentences in

21
Spanish, none of the substantive provisions describing binding arbitration was translated.
(See Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 85
[finding surprise based on, among other facts, the employers’ knowledge that the plaintiffs
required translation to Spanish but the employers only translated part of the agreement].)
Moreover, even if the document had been translated for plaintiff, the agreement is a lengthy
four pages, single-spaced. It is dense, complex, and a layperson “would not have an easy
journey” in trying to understand it. (OTO, supra, 8 Cal.5th at p. 128 [finding surprise based
on the agreement being “a paragon of prolixity,” dense, and “opaque” in substance with
complex sentences “filled with statutory references and legal jargon”].) For example, the
agreement states: (1) “Regardless of any other terms of this Agreement, a claim may be
brought before and remedies awarded by an administrative agency if applicable law permits
the agency to adjudicate the claim notwithstanding the existence of an agreement to arbitrate
governed by the Federal Arbitration Act”; and (2) “This Agreement shall not be construed to
require the arbitration of claims against a contractor that may not be the subject of a
mandatory arbitration agreement as provided by Pub. L. 111-118 (Section 8116),
Pub. L. 112-10 (Section 8102), Pub. L. 112-74 (Section 8101), Pub. L. 113-6
(Section 8097), and their implementing regulations, or any successor Department of
Defense Appropriations Act addressing the arbitrability of claims.”
On this record, we determine that defendants failed to meet their burden of showing
that the trial court erred in finding procedural unconscionability. (See Subcontracting
Concepts (CT), LLC v. De Melo (2019) 34 Cal.App.5th 201, 211 [finding procedural
unconscionability due in part to the adhesive nature of the agreement containing the
arbitration clause, one party was not sufficiently fluent in English to understand the
agreement, and no one explained “any of the 27 clauses in the five-page [a]greement,
including the arbitration clause”].)
Defendants cite Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237 (Baltazar) and
Caballero v. Premier Care Simi Valley LLC (2021) 69 Cal.App.5th 512 in support of their

22
argument that plaintiff’s inability to read English “does not mean that she was ‘surprised’ by
her agreement to arbitrate.” However, neither case addresses whether an employer’s
presentation of a contract written in language that the employer knows the employee does
not speak or read may be a factor in the procedural unconscionability analysis. In Baltazar,
a case in which there was no language barrier, the employee actually “knew about the
arbitration agreement” and “initially sought to avoid it” and hence “there was no element of
surprise.” (Baltazar, supra, at p. 1245.) In Caballero, the appellate court addressed
whether a valid arbitration agreement was formed when it was written in English and the
plaintiff could only read and write Spanish, not whether limited English proficiency may be
a factor in the procedural unconscionability context. (Caballero, supra, at pp. 514-515,
518-519.) Moreover, Caballero determined that if the plaintiff had told the defendant that
he could not read English, “the burden would have shifted to [the defendant] to explain the
contents of the Arbitration Agreement.” (Id. at p. 519.) In this case, defendants were aware
of plaintiff’s limited English proficiency, as they provided an interpreter to translate some
plaintiff’s new hire documents, but they did not translate the substance of the dispute
resolution agreement which contained an agreement for binding arbitration.
Defendants also contend that plaintiff was given as much time as she needed to
review the agreement, to ask questions, to have the interpreter read the agreement to her,
and to show it to anyone, including an attorney. The basis for these factual assertions is the
declaration by defendants’ human resources director. However, as the trial court properly
determined, the human resources director in his declaration did “not provide[] sufficient
facts from which the court could conclude that he has personal knowledge of the actual
circumstances of [p]laintiff’s onboarding.” As we have explained, the interpreter translated
the content of documents other than the dispute resolution agreement, and that agreement
itself notified plaintiff in Spanish that it was her “sole responsibility” to read and understand
it, and that independent advice about the agreement could be obtained “outside the

23
Company.” However, plaintiff was not given a copy of the agreement or the opportunity to
take it home before signing.
In sum, defendants fail to meet their burden of showing error in the trial court’s
finding that the agreement suffered from procedural unconscionability.
3. Substantive unconscionability
We next consider whether specific terms in the dispute resolution agreement are
substantively unconscionable. “Substantive unconscionability examines the fairness of a
contract’s terms. This analysis ‘ensures that contracts, particularly contracts of adhesion, do
not impose terms that have been variously described as “ ‘ “overly harsh” ’ ” [citation],
“ ‘unduly oppressive’ ” [citation], “ ‘so one-sided as to “shock the conscience” ’ ” [citation],
or “unfairly one-sided” [citation]. All of these formulations point to the central idea that the
unconscionability doctrine is concerned not with “a simple old-fashioned bad bargain”
[citation], but with terms that are “unreasonably favorable to the more powerful party.” ’
[Citation.]” (OTO, supra, 8 Cal.5th at pp. 129-130.)
a. Class Action Waiver
The dispute resolution agreement contains a class action waiver that bars “any
dispute to be brought, heard or arbitrated as a class action.” The trial court acknowledged
that “class action waivers are not categorically substantively unconscionable” but
nevertheless concluded that the provision was unconscionable because “class action waivers
are one-sided in that they only apply to the employee.”
Defendants contend that the trial court erred in determining that the class action
waiver was substantively unconscionable. Plaintiff contends that the court properly
concluded that such waivers are substantively unconscionable.
Resolution of this issue requires a brief summary of the treatment of class action
waivers by the courts. Initially, in “Discover Bank v. Superior Court[ (2005) 36 Cal.4th
148], [the California Supreme Court] announced a rule that class arbitration waivers in
consumer contracts are unconscionable when they are found ‘in a setting in which disputes

24
between the contracting parties predictably involve small amounts of damages and, when it
is alleged that the party with the superior bargaining power has carried out a scheme to
deliberately cheat large numbers of consumers out of individually small sums of money.’
[Citation.]” (Sanchez, supra, 61 Cal.4th at p. 923.)
Thereafter, the United States Supreme Court in AT&T Mobility LLC v. Concepcion
(2011) 563 U.S. 333 (Concepcion) held “that the Federal Arbitration Act . . . preempts
California’s unconscionability rule prohibiting class waivers in consumer arbitration
agreements.” (Sanchez, supra, 61 Cal.4th at p. 906.) “The high court in Concepcion . . .
held that ‘[r]equiring the availability of classwide arbitration interferes with fundamental
attributes of arbitration and thus creates a scheme inconsistent with the FAA.’ [Citation.]
According to Concepcion, classwide arbitration ‘sacrifices the principal advantage of
arbitration—its informality—and makes the process slower, more costly, and more likely to
generate procedural morass than final judgment.’ [Citation.] Class arbitration also ‘greatly
increases risks to defendants’ and ‘is poorly suited to the higher stakes of class litigation’
because of the lack of judicial review, ‘thus rendering arbitration unattractive’ to defendants.
[Citation.] The court concluded that ‘[b]ecause it “stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress,” [citation],
California’s Discover Bank rule is preempted by the FAA.’ [Citation.]” (Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 362 (Iskanian).)
“Concepcion did not address [another California Supreme Court opinion,] Gentry v.
Superior Court (2007) 42 Cal.4th 443, which found certain class action waivers in
employment arbitration agreements to be unenforceable . . . .” (Marenco v. DirecTV LLC
(2015) 233 Cal.App.4th 1409, 1421 (Marenco).) However, subsequently, “[b]ased on
Concepcion, the [California Supreme Court in Iskanian, supra, 59 Cal.4th 348] concluded
that Gentry’s rule—that certain class action waivers in employment arbitration agreements
are invalid under state law—is preempted by the FAA. [Citation.]” (Ibid.) Specifically, in
Iskanian, the California Supreme Court concluded that “a state’s refusal to enforce . . . a

25
[class action] waiver on grounds of public policy or unconscionability is preempted by the
FAA.” (Iskanian, supra, at p. 360.)
In view of Concepcion and Iskanian, the trial court in the instant case erred in
determining that the class action waiver in the parties’ arbitration agreement was
unenforceable based on the defense of unconscionability. (See Marenco, supra,
233 Cal.App.4th at pp. 1420-1421.) In concluding otherwise, the trial court relied on Navas
v. Fresh Venture Foods, LLC (2022) 85 Cal.App.5th 626 (Navas) and Hasty v. American
Automobile Assn. etc. (2023) 98 Cal.App.5th 1041 (Hasty).
In Navas, the appellate court determined that the arbitration agreement was
“primarily one-sided in favor of [the employer]” and ultimately unconscionable. (Navas,
supra, 85 Cal.App.5th at p. 636; see id. at p. 630.) The court identified specific claims that
were covered by the agreement, such as termination of employment, wage and hour
violations, and discrimination claims. The court also observed that the agreement stated,
“ ‘There will be no right or authority under this Agreement for any dispute to be brought,
heard, or arbitrated as a class or collective action.’ ” (Id. at p. 636.) The court then
explained, “But these are the type of claims that only employees bring against employers.
Arbitration agreements that primarily require arbitration of the type of claims only
employees bring against employers are substantively unconscionable as being ‘one-sided
and harsh.’ [Citations.] They are unfair to employees where, for example, ‘[t]he mandatory
arbitration requirement can only realistically be seen as applying primarily . . . to claims
arising out of the termination of employment, which are virtually certain to be filed against,
not by, [the employer].’ [Citation.] In such cases the agreement is not neutral or mutual.
[Citation.]” (Ibid., italics omitted.)
Subsequently, citing Navas, the appellate court in Hasty stated, “[T]he arbitration
agreement is . . . one-sided because it requires the parties to bring their claims ‘in an
individual capacity,’ not ‘in a private attorney general capacity,’ and prohibits class,
representative, or private attorney general proceedings. These requirements can fairly be

26
read to limit only the employee’s rights. [Citation.]” (Hasty, supra, 98 Cal.App.5th at
pp. 1062-1063.) The court then proceeded to discuss the fact that PAGA claims are not
waivable. (Id. at p. 1063.) The court ultimately found the agreement unconscionable.
(Ibid.)
The conclusion in Navas that the arbitration agreement was “one-sided” and “not . . .
mutual” appears to have been based primarily on the types of claims for relief that were
encompassed by the agreement, such as those related to termination of employment, rather
than the procedural device of a class action. (Navas, supra, 85 Cal.App.5th at p. 636.)
Similarly, in Hasty, the appellate court’s conclusion that the arbitration agreement was “one-
sided” likewise appears to focus on PAGA claims, rather than class claims. (Hasty, supra,
98 Cal.App.5th at p. 1062.) However, to the extent these two opinions may be understood
to hold that class action waivers are one-sided and therefore unconscionable and
unenforceable, we observe that neither case addressed Concepcion or Iskanian in relation to
such a holding. As we find Concepcion and Iskanian relevant and binding on this court, we
are compelled to conclude in the instant case that the class action waiver in the parties’
dispute resolution agreement was not substantively unconscionable. (See Auto Equity Sales,
Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.)
b. Confidentiality
The dispute resolution agreement includes a confidentiality provision which states,
“Except as may be permitted or required by law, as determined by the Arbitrator, neither a
party nor an Arbitrator may disclose the existence, content, or results of any arbitration
hereunder without the prior written consent of all parties.” The trial court found this
provision was substantively unconscionable because confidentiality provisions usually
benefit only the employer and may inhibit discovery by the plaintiff employee.
On appeal, defendants contend that the enforceability of this provision must be
determined by the arbitrator and that in any event, it is not substantively unconscionable.
Plaintiff argues, among other things, that the provision is one-sided in favoring the

27
employer, prevents a “claimant from contacting other employees to obtain helpful
information and also prevent[s] other employees from building similar claims.” We find no
error by the trial court in finding the provision substantively unconscionable.
First, defendants contend that “the enforceability of a confidentiality clause is a
‘matter distinct from the enforceability of [an] arbitration clause’ and is instead a procedural
issue to be decided by the arbitrator.” We determine that defendants fail to meet their
burden on appeal to show error in this regard. The entirety of defendants’ argument on this
point in the trial court and in this court consists of one sentence with two case citations. In
one case cited by defendants, Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, the
appellate court did not address whether the arbitrator or the court must determine if a
confidentiality provision renders an arbitration agreement substantively unconscionable. In
the other case, Kilgore v. KeyBank, N.A. (9th Cir. 2013) 718 F.3d 1052 (Kilgore), the Ninth
Circuit Court of Appeals determined that a confidentiality provision “preventing disclosure
of any arbitration award” did not render an arbitration provision substantively
unconscionable. (Id. at pp. 1058-1059 & fn. 9.) In a footnote, the Ninth Circuit stated that
“the enforceability of the confidentiality clause is a matter distinct from the enforceability of
the arbitration clause in general,” and that the plaintiffs were “free to argue during
arbitration that the confidentiality clause is not enforceable.” (Id. at p. 1059, fn. 9.)
The Ninth Circuit thus did not state that only the arbitrator, not the court, may decide
the issue of whether an arbitration agreement is substantively unconscionable based on a
confidentiality clause, and indeed it appears the Ninth Circuit itself decided the
unconscionability issue. (Kilgore, supra, 718 F.3d at pp. 1058-1059 [stating that “nothing
else in the arbitration clause in the Note suggests substantive unconscionability”].)
Defendants thus fail to provide persuasive legal authority establishing that the arbitrator, not
the court, must decide whether the arbitration agreement is unconscionable based on the
confidentiality clause.

28
Second, defendants argue on appeal that “California courts have found that
confidentiality clauses are not substantively unconscionable,” the confidentiality clause does
not preclude plaintiff from investigating her claims or conducting discovery, and the
confidentiality clause “does not require strict confidentiality and instead allows disclosure
‘as may be permitted or required by law . . . .’ ”
Courts have observed that “although confidentiality provisions are facially neutral,
they usually favor companies over individuals. [Citation.]” (Murrey v. Superior
Court (2023) 87 Cal.App.5th 1223, 1254 (Murrey).) Indeed, certain confidentiality
provisions serve “no purpose other than to benefit [the employer].” (Id. at p. 1255; accord,
Hasty, supra, 98 Cal.App.5th at p. 1062.) At the same time, depending on the breadth of the
confidentiality provision, employees are impaired from engaging in informal discovery or
contacting witnesses. (Ramos v. Superior Court (2018) 28 Cal.App.5th 1042, 1065, 1066
(Ramos); see id. at p. 1067 [finding confidentiality provision substantively
unconscionable].) Some confidentiality provisions also prevent employees from “ ‘tak[ing]
advantage of findings in past arbitrations . . . .” (Hasty, supra, 98 Cal.App.5th at p. 1062.)
For example, in employment discrimination cases, “ ‘[f]uture employees cannot . . . prove a
pattern of discrimination and/or retaliation.’ ” (Ibid.)
However, even if a confidentiality provision is for the benefit of only the employer,
the provision is not necessarily unconscionable. For example, in Baltazar, supra, 62 Cal.4th
1237, the California Supreme Court determined that an arbitration agreement’s
confidentiality provision that expressly protected only the employer’s trade secrets and other
confidential information was not unduly harsh or one-sided. (Id. at p. 1250.) The court
explained that “the basis for the extra measure of protection is a legitimate commercial need
to protect [the employer’s] ‘valuable trade secrets and proprietary and confidential
information’ from public disclosure.” (Ibid.) The court stated that a “ ‘ “contract can
provide a “margin of safety’ that provides the party with superior bargaining strength a type

29
of extra protection for which it has a legitimate commercial need without being
unconscionable. [Citation.]” ’ ” (Ibid.)
Some confidentiality provisions are also not absolute. For example, in Hasty, the
arbitration agreement indicated that the confidentiality provision applied only to the
“ ‘extent permitted by law.’ ” (Hasty, supra, 98 Cal.App.5th at p. 1062.) The appellate
court nevertheless determined that this language did “not save” the confidentiality clause
from being substantively unconscionable “because the employees would have no way of
knowing what would be covered or not covered by this provision.” (Ibid.)
In the present case, the confidentiality provision applies equally to all parties, rather
than protecting only one party’s information. However, the provision, which is contained in
defendants’ preprinted agreement, appears to benefit only the defendant employers.
Defendants do not identify a “ ‘ “legitimate commercial need” ’ ” for the “ ‘ “extra
protection” ’ ” provided by the confidentiality provision. (Baltazar, supra, 62 Cal.4th at
p. 1250.) At the same time, the provision broadly prohibits disclosure of “the existence,
content, or results of any arbitration . . . .” Given that the provision precludes disclosure of
not only the content of the arbitration, but its very existence, we agree with the trial court
and plaintiff that it inhibits her ability to investigate, communicate with, and gather evidence
from current and former employees that may be helpful to prove her claims. Moreover,
although the provision applies “[e]xcept as may be permitted or required by law, as
determined by the Arbitrator,” “employees would have no way of knowing what would be
covered or not covered by this provision” (Hasty, supra, 98 Cal.App.5th at p. 1062).
However, the California Supreme Court has explained that “ ‘a substantive
unconscionability analysis is sensitive to “the context of the rights and remedies that
otherwise would have been available to the parties.” [Citation.] We must examine both the
features of dispute resolution adopted as well as the features eliminated.’ [Citation.]”
(Ramirez, supra, 16 Cal.5th at p. 506.) For example, in Ramirez, the court found that
“[a]llowing the arbitrator to deviate from agreed-upon default discovery limits ensures that

30
neither party will be unfairly hampered . . . .” (Ibid.) The court further stated that,
“[n]ormally, we assume the arbitrator will act reasonably and in conformity with the law.
[Citation.]” (Ibid.) Consequently, if a contract is ambiguous and “susceptible to two
interpretations, one which renders it valid and the other which renders it void, a court should
select the interpretation that makes the contract valid,” and thereby eliminate any
unconscionability. (Id. at p. 507.)
In this case, we could assume that an arbitrator would determine that the law permits
or requires plaintiff to have the ability to communicate with current and former employees
about the arbitration for the purpose of gathering information that may be helpful to her
case. Alternatively, we could determine, based on defendants’ failure to articulate a
legitimate need for the provision, that the provision is substantively unconscionable on its
face and that it should be severed from the dispute resolution agreement. Under either
scenario, the result would appear to be the same—defendants would not be able to enforce
the confidentiality provision against plaintiff. Given that “employees would have no way of
knowing what would be covered or not covered by this provision” at the outset (Hasty,
supra, 98 Cal.App.5th at p. 1062), and to avoid the risk that employees might then be
deterred from pursuing arbitration based on the belief that the confidentiality provision will
prevent them from being able to talk to potential witnesses (see Murray, supra,
87 Cal.App.5th at p. 1255 [confidentiality provision “ ‘potentially discourages’ ” an
employee from pursuing a discrimination claim]), we determine that the clause is
substantively unconscionable but, as we shall later discuss, severable.
We are not persuaded by defendants’ reliance on Sanchez v. Carmax Auto
Superstores California, LLC (2014) 224 Cal.App.4th 398, and Woodside Homes of Cal.,
Inc. v. Superior Court (2003) 107 Cal.App.4th 723, to support their argument that the
confidentiality clause in this case is not substantively unconscionable. As explained by
another appellate court, “neither of those opinions addressed [the] argument that a
confidentiality clause like the one at issue in this case would impair [a plaintiff’s] ability to

31
engage in informal discovery in pursuit of her litigation claims.” (Ramos, supra, 28
Cal.App.5th at p. 1066.) For that reason, defendants’ citation to a Ninth Circuit Court of
Appeals opinion does not advance their argument, as the Ninth Circuit relied on these two
cases and addressed a narrower confidentiality provision that did not limit the plaintiffs’
ability to share information. (See Poublon v. C.H. Robinson Co. (9th Cir. 2017) 846 F.3d
1251, 1266, 1067 & fn. 4.)
We also find unpersuasive defendants’ contention that Murrey, supra, 87
Cal.App.5th 1223, which found that a confidentiality provision added to an agreement’s
substantive unconscionability, is materially distinguishable. The plaintiff in Murrey alleged
a sexual harassment claim in addition to Labor Code violations, whereas plaintiff in the
instant case does not allege any harassment or discrimination claim. (See id. at p. 1231.)
Defendants do not articulate why a confidentiality provision may be unfairly one-sided in
relation to a sexual harassment claim but would nevertheless be fair when Labor Code
violations or other types of claims are alleged. Further, “[i]n resolving a claim of
unconscionability, a court’s inquiry is whether the contract provision was unconscionable at
the time it was made. [Citation.]” (Prima Donna Development, supra, 42 Cal.App.5th at
p. 37; see Ramirez, supra, 16 Cal.5th at pp. 506-507 [explaining that the analysis of an
unconscionability challenge to a discovery clause in an arbitration agreement should not
“look[] to postcontract formation circumstances”].) Thus, we do not agree with defendants
that an arbitration agreement containing a confidentiality provision cannot be substantively
unconscionable unless the claims later alleged by the plaintiff involve sexual harassment.
In sum, we determine that the confidentiality clause is substantively unconscionable.
c. Discovery
The dispute resolution agreement provides for discovery as follows: “In arbitration,
the parties will have the right to conduct adequate civil discovery, bring dispositive motions,
and present witnesses and evidence as needed to present their cases and defenses, and any
disputes in this regard shall be resolved by the Arbitrator. At a party’s request or on the

32
Arbitrator’s own initiative, the Arbitrator may subpoena witnesses or documents for
discovery purposes or for the arbitration hearing.” (Italics added.)
In the trial court, plaintiff contended in opposition to defendants’ motion to compel
arbitration that although this discovery provision authorized the arbitrator to issue
subpoenas for discovery purposes, the FAA does not allow discovery from third parties.
Further, according to plaintiff, because the dispute resolution agreement did not incorporate
the relevant section of the CAA, third party discovery subpoenas were also not permitted
under California law. Plaintiff contended that “the unavailability of third-party discovery
unreasonably favors the employer,” who has “superior knowledge of former employees who
[p]laintiff cannot depose,” and former employees, who are not subject to the constraints of
an ongoing employment relationship, are more likely to disclose damaging information.
Plaintiff argued that as a result, the discovery provision was one-sided, impeded her ability
to vindicate her claims, and was substantively unconscionable.
The trial court determined that defendants in their reply brief did “not respond to this
argument, thereby impliedly conceding it is meritorious.” The court “[a]ccordingly” found
the discovery provision substantively unconscionable.
On appeal, defendants contend that their reply brief filed in the trial court addressed
the discovery provisions. Defendants further argue that “no waiver occurred because it is
not a new theory, and it only pertains to questions of law on undisputed facts.” On the
merits, defendants contend that (1) the parties’ agreement provides for third party discovery
subpoenas, and (2) even without this provision the agreement could not be unconscionable
because it is in accordance with the FAA.
Although defendants did not specifically address in their reply brief in the trial court
the third party discovery issue that was raised by plaintiff in opposition to the motion to
compel arbitration, we observe that defendants did address this specific issue at the hearing
on the motion to compel. We therefore consider the substance of defendants’ contention on
appeal.

33
At the time the parties entered into the dispute resolution agreement, third party
discovery under the CAA and FAA was limited or nonexistent. (See Ramirez, supra,
16 Cal.5th at p. 493 [stating that the unconscionability analysis “ ‘is determined with
reference to the time when the contract was made and cannot be resolved by hindsight by
considering circumstances of which the contracting parties were unaware’ ”]; see also id. at
p. 506 [explaining that an “assessment of whether a discovery clause is unconscionable
should focus on general factors that can be examined without relying on subsequent
developments”]; Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52 Cal.App.5th 360, 369-
370, 393-395 (Aixtron) [holding that an arbitrator did not have the authority under former
provisions of the CAA to issue a discovery subpoena to a third party in the circumstances of
the case, and adopting the majority view of federal courts that arbitrators do not have the
authority under 9 U.S.C. § 77 of the FAA to order a third party to produce documents in
discovery]; McConnell v. Advantest America, Inc. (2023) 92 Cal.App.5th 596, 608-610,
612-613; Vo v. Technology Credit Union (2025) 108 Cal.App.5th 632, 646, fn. 6 (Vo)
[explaining that “[e]ffective January 1, 2025, parties can now obtain third party discovery
under the CAA without explicitly incorporating [Code of Civil Procedure] section 1283.05
into their arbitration agreement”].)

7
Title 9 United States Code section 7 states, “The arbitrators selected either as
prescribed in this title or otherwise, or a majority of them, may summon in writing any
person to attend before them or any of them as a witness and in a proper case to bring with
him or them any book, record, document, or paper which may be deemed material as
evidence in the case. The fees for such attendance shall be the same as the fees of witnesses
before masters of the United States courts. Said summons shall issue in the name of the
arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a
majority of them, and shall be directed to the said person and shall be served in the same
manner as subpoenas to appear and testify before the court; if any person or persons so
summoned to testify shall refuse or neglect to obey said summons, upon petition the United
States district court for the district in which such arbitrators, or a majority of them, are
sitting may compel the attendance of such person or persons before said arbitrator or
arbitrators, or punish said person or persons for contempt in the same manner provided by
law for securing the attendance of witnesses or their punishment for neglect or refusal to
attend in the courts of the United States.”

34
However, an arbitration agreement may give the arbitrator the authority “to deviate
from agreed-upon default discovery limits.” (Ramirez, supra, 16 Cal.5th at p. 506 [applying
California law]; see Vo, supra, 108 Cal.App.5th at pp. 646-647; Life Receivables Trust v.
Syndicate 102 at Lloyd’s of London (2d Cir. 2008) 549 F.3d 210, 218 (Life Receivables
Trust) [applying the FAA].) In this case, the dispute resolution agreement specifically
authorizes the arbitrator to “subpoena witnesses or documents for discovery purposes.” The
agreement also more broadly provides that “the parties will have the right to conduct
adequate civil discovery” and that “any disputes in this regard shall be resolved by the
Arbitrator.” These provisions allow for adequate discovery, including third party discovery.
(See Ramirez, supra, at p. 507 [concluding that an arbitration agreement’s discovery
provision would be interpreted to eliminate unconscionability by allowing the arbitrator to
order additional discovery as needed, where discovery provision was “susceptible to either”
a valid or an invalid interpretation]; accord Vo, supra, at p. 647 [explaining that if “a clause
is ambiguous as to whether the arbitrator can order additional discovery and susceptible to
an interpretation that either renders it valid or void, the court should select an interpretation
that makes the contract valid”].)
We conclude that the dispute resolution agreement is not substantively
unconscionable with respect to discovery. (See Vo, supra, 108 Cal.App.5th at pp. 645, 648
[determining that an arbitration agreement was not substantively unconscionable regarding
discovery where it “allow[ed the] employee access to third party discovery that may be
necessary to adequately arbitrate his [employment discrimination] claims”]; Chee v. Tesla
Inc. (N.D.Cal. 2024) 732 F.Supp.3d 1056, 1065-1066 [concluding that an arbitration
provision authorizing the arbitrator “to compel adequate discovery” did not limit discovery
and therefore was “not substantively unconscionable”].) The trial court erred in concluding
otherwise.
In sum, we determine that the trial court erred in determining that the discovery
provision in the dispute resolution agreement was substantively unconscionable.

35
d. Internal Complaint Procedure
The dispute resolution agreement contains a nonspecific reference to other company
dispute resolution procedures as follows: “Nothing contained in this Agreement shall be
construed to prevent or excuse you (individually or in concert with others) or the Company
from utilizing the Company’s existing internal procedures for resolution of complaints, and
this Agreement is not intended to be a substitute for the utilization of such procedures.” The
trial court determined that this provision “binds both parties to an informal resolution
procedure that is not described in the agreement and that [d]efendants control.” The court
concluded that this informal resolution provision was unconscionable.
On appeal, defendants contend that the internal complaint provision is not
unconscionable because it applies equally to both plaintiff and defendants. Defendants also
argue that the collective bargaining agreement, which plaintiff’s union agreed to on her
behalf, “details the existing internal grievance procedure” that applies to plaintiff.
Plaintiff contends that the provision requires her to satisfy an internal dispute
resolution procedure that is controlled by defendants before filing a claim in arbitration,
which gives defendants a “ ‘free peek’ ” at her case or other undue advantage. She also
argues that it is not clear that the dispute resolution agreement’s reference to “the
Company’s existing internal procedures for resolution of complaints” means the grievance
policy in the collective bargaining agreement.
First, in the absence of evidence regarding what the internal complaint procedure
entailed, plaintiff failed to demonstrate that the internal complaint procedure is
unconscionable.8 (See Pinnacle, supra, 55 Cal.4th at p. 236 [stating that the party opposing

8
For the first time on appeal, defendants contend that the dispute resolution
agreement was referring to a grievance procedure set forth in the collective bargaining
agreement. However, the collective bargaining agreement contained in the record on appeal
was not signed or in effect until well after plaintiff signed the dispute resolution agreement.
Consequently, at the time plaintiff entered into the dispute resolution agreement, that
agreement’s reference to an “existing” company procedure for resolution of complaints

36
arbitration bears the burden of proving the defense of unconscionability]; Baltazar, supra,
62 Cal.4th at p. 1246 [explaining that the employer’s failure to provide a copy of the
American Arbitration Association’s rules, which were incorporated by reference into the
parties’ arbitration agreement, did not bear upon the substantive unconscionability analysis
where the employee did not challenge the substance of those rules].) Second, even assuming
an internal complaint procedure existed, we are not persuaded that requiring an employee to
utilize that procedure is unconscionable. Internal complaint procedures commonly exist for
the benefit of both the employer and the employee to readily resolve workplace disputes and
to avoid escalation into protracted proceedings in the judicial or arbitral forum. In sum,
plaintiff failed to demonstrate that the informal resolution provision is unconscionable.
D. Severance
The trial court refused to sever any provision of the dispute resolution agreement “in
light of the high degree of procedural unconscionability it ha[d] found.” On appeal,
defendants contend that any unconscionable provision should have been severed and the
remainder of the agreement enforced. Plaintiff argues that defendants fail to show an abuse
of discretion by the trial court.
California legal principles regarding severance apply to contracts governed by the
FAA. “The FAA seeks to treat interpretation and enforcement of arbitration agreements
equally with other contracts. Such treatment continues to recognize the severance of
unconscionable claims as an option for the court’s consideration.” (Ramirez, supra,
16 Cal.5th at p. 518.)
Under California law, “[i]f a contractual clause is found unconscionable, the court
may, in its discretion [under Civil Code section 1670.5, subdivision (a)], 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. [Citation.] The

could not have been referring to the later collective bargaining agreement contained in the
record on appeal.

37
‘strong legislative and judicial preference is to sever the offending term and enforce the
balance of the agreement.’ [Citation.] 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 unconscionability.’ [Citation.] The trial court’s
decision to act as Civil Code section 1670.5 permits is reviewed for abuse of discretion.
[Citation.]” (Ramirez, supra, 16 Cal.5th at p. 513.)
In determining how to exercise its discretion, a court should ask at the outset
“whether ‘the central purpose of the contract is tainted with illegality.’ [Citation.] If so, the
contract cannot be cured, and the court should refuse to enforce it. If that is not the case, the
court should go on to ask first, whether the contract’s unconscionability can be cured purely
through severance or restriction of its terms, or whether reformation by augmentation is
necessary. [Citation.] If no ‘reformation is required,’ the offending provision can be
severed or limited, and ‘the rest of the arbitration agreement left intact,’ then severance or
restriction is the preferred course for provisions that are collateral to the agreement’s main
purpose. [Citations.] . . . [¶] Even if a contract can be cured, the court should also ask
whether the unconscionability should be cured through severance or restriction because the
interests of justice would be furthered by such actions. [Citation.] This part of the inquiry
focuses on whether mere severance of the unconscionable terms would function to condone
an illegal scheme and whether the defects in the agreement indicate that the stronger party
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.
[Citation.] If the answer to either question is yes, the court should refuse to enforce the
agreement.” (Ramirez, supra, 16 Cal.5th at pp. 516-517.) “In conducting this analysis, the
court may also consider the deterrent effect of each option.” (Ibid.) For example, “severing
multiple unconscionable provisions from an agreement and enforcing the remainder could
‘create an incentive for an employer to draft a one-sided arbitration agreement in the hope

38
employees would not challenge the unlawful provisions, but if they do, the court would
simply modify the agreement to include the bilateral terms the employer should have
included in the first place.’ [Citation.]” (Ibid.) “Finally, if the contract contains a
severance clause, the court should take it into account as an expression of the parties’ intent
that an agreement curable by removing defective terms should otherwise be
enforced. [Citations.]” (Ibid.)
In this case, we have determined that only the provision regarding confidentiality is
unconscionable. This provision is collateral to the main purpose of the agreement for
binding arbitration. The confidentiality provision is contained in a single sentence, closer to
the end of the multi-page dispute resolution agreement, with the qualification that the
arbitrator may decide, or the parties may agree, to allow disclosure. The unconscionability
of the provision can be cured through severance of the provision. In addition, the interests
of justice would be furthered by such action, and the deterrent effect from severance is
sufficient. Given that the provision expressly authorizes the arbitrator or all parties together
to consent to disclosure, it does not appear that the provision was drafted or included with
the hope that an employee would not challenge or seek relief from the provision. Lastly, the
dispute resolution agreement includes a severance clause, which provides that if “any
portion of the [a]greement is deemed unenforceable, the remainder of this [a]greement will
be enforceable.” In sum, given the nature of the sole provision regarding confidentiality that
is unconscionable, we determine that all factors weigh in favor of severance of the provision
and enforcement of the remainder of the dispute resolution agreement. (See Ramirez, supra,
16 Cal.5th at pp. 516-517.) We therefore conclude that the trial court abused its discretion
in finding that severance was not appropriate in this case.
E. Dismissal of Class Claims
The trial court, after finding that severance of multiple unconscionable provisions
was not appropriate and the dispute resolution agreement was unenforceable, determined
that the class action waiver contained within the agreement was also unenforceable. The

39
court therefore denied defendants’ motion to dismiss the class claims. We have concluded
that the dispute resolution agreement may be enforced after severing the single
unconscionable provision regarding confidentiality. We consequently determine that
defendants’ motion to dismiss plaintiff’s class claims should have been granted.
In sum, we determine that only the confidentiality provision is unconscionable, and
that the provision should be severed from the dispute resolution agreement. As the
remainder of the dispute resolution agreement is enforceable, defendants’ motion to compel
arbitration, dismiss the class claims, and stay the action should have been granted.
III. DISPOSITION
The trial court’s order denying defendants’ motion to compel arbitration, dismiss
plaintiff’s class claims, and stay the action is reversed. The matter is remanded to the trial
court with directions to (1) sever the dispute resolution agreement’s confidentiality
provision, and (2) grant defendants’ motion to compel arbitration, dismiss the class claims,
and stay the action. In the interests of justice, the parties shall bear their own costs on
appeal.

40
_______________________________
Greenwood, P. J.

WE CONCUR:

______________________________________
Danner, J.

______________________________________
Bromberg, J.

H052759 Vargas Rivera v. Flagship Facility Services, Inc., et al.