In Cruise v. Kroger Co., ___ Cal.App.4th ___ (January 20, 2015), the California Court of Appeal (Second Appellate District, Division Three) reversed the order of the Los Angeles County Superior Court (Judge Bruguera) denying defendants’ motion to compel arbitration of plaintiff’s harassment, discrimination and retaliation claims.
On October 20, 2007, plaintiff completed and signed an employment application for defendant employer which included an agreement to arbitrate any claims that might arise in her favor against defendant. The arbitration policy referred to in the agreement, however, was not attached to the employment application. Nor did defendant ever provide a copy of the policy to plaintiff during her employment. After her termination in April 2012, plaintiff filed a complaint against defendant employer and others asserting claims for “retaliation, sexual harassment, sexual and racial discrimination, failure to investigate and prevent harassment and retaliation, as well as common law claims for wrongful termination in violation of public policy, intentional infliction of emotional distress and defamation.” Defendants then moved to compel arbitration based on the agreement in the employment application and its arbitration policy. The trial court denied the motion on the ground that defendants “failed to meet their burden to prove the existence of a signed arbitration agreement.” Additionally, the trial court found that the arbitration policy was both procedurally and substantively unconscionable because plaintiff was required to accept it in order to apply for employment and its terms violated the tenets set forth in Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000). Defendant appealed.
The appellate court disagreed, finding that the language in the employment application “eliminates any argument the parties did not agree to arbitrate their employment-related disputes.” The appellate court agreed that defendants failed to establish that the terms of the arbitration policy governed the arbitration agreement, but this actually was to defendant’s benefit: The only impact of [defendant]’s inability to establish the contents of the 2007 Arbitration Policy is that [defendant employer] failed to establish that the parties agreed to govern their arbitration by procedures different from those prescribed in the [California Arbitration Act] Unless the parties otherwise agree, the conduct of an arbitration proceeding is controlled by the CAA. Here, because [defendant employer] failed to establish an agreement to the contrary, the instant arbitration proceeding is to be governed by the procedures set forth in the CAA. Because this arbitration is controlled by California statutory and case law, [plaintiff]’s arguments that [the] Arbitration Policy is unconscionable, both procedurally and substantively, are meritless.”