Baltazar v. Forever 21, Inc.

• Decision Date: 20 December 2012
• Citation: 150 Cal.Rptr.3d 845
• Court: California Court of Appeals Court of Appeals
• Parties: Maribel BALTAZAR, Plaintiff and Respondent, v. FOREVER 21, INC., et al., Defendants and Appellants.

150 Cal.Rptr.3d 845

Maribel BALTAZAR, Plaintiff and Respondent,

v.FOREVER 21, INC., et al., Defendants and Appellants.

Court of Appeal,

Second District, Division 1, California.

B237173

Filed December 20, 2012

APPEAL from an order of the Superior Court of Los Angeles County, Raul A. Sahagun, Judge. Reversed with directions. (Los Angeles County Super. Ct. No. VC059254)

Gilbert, Kelly, Crowley & Jennett, Arthur J. McKeon III, Rebecca J. Smith and Edward E. Ward, Los Angeles, for Defendants and Appellants.

Law Offices of Mark Joseph Valencia and Mark Joseph Valencia, Los Angeles, for Plaintiff and Respondent.

MALLANO, P.J.

Plaintiff filed this action against her former employer and three employees, alleging she was constructively discharged and subjected to discrimination and harassment based on race and sex. The employer and two of the employees filed a motion to compel arbitration pursuant to an arbitration agreement between plaintiff and the employer. Plaintiff opposed the motion, arguing the agreement was unconscionable. The trial court ruled in plaintiff's favor and denied the motion. Defendants appealed.

We conclude the trial court erred. Although the arbitration agreement was a contract of adhesion, it was not substantively unconscionable. In particular, we do not find unconscionable a provision in the arbitration agreement allowing either party to seek provisional remedies—such as a temporary restraining order or an injunction—in court. Nor is any other provision substantively unconscionable. We therefore reverse the order denying the motion to compel arbitration.

IBACKGROUND

The facts and allegations in this appeal are taken from the complaint and the declarations and exhibits submitted in connection with the motion to compel arbitration.

A. Complaint

This action was filed on August 4, 2011. The complaint alleges as follows. Plaintiff, Maribel Baltazar, is a married woman of Mexican ancestry. She began working for Forever 21, Inc. (Forever 21), as an “associate” on or about November 13, 2007. Forever 21 is a clothing retail merchandiser. Plaintiff worked in the company's distribution center in downtown Los Angeles. The distribution center sorted incoming clothing so it would be properly delivered to Forever 21's retail locations. The complaint does not allege whether shipments to the warehouse came from out of state or whether deliveries from the warehouse to retail locations were sent out of state.

From early 2008 through the end of 2008, one of plaintiff's managers made racist statements to or about her. Throughout her employment, Forever 21 discriminated against Hispanic associates by paying them less than non-Hispanic associates who were performing the same duties. When plaintiff complained about the pay disparity, her superiors responded with laughter. Korean employees received preferential treatment at the distribution center.

One of plaintiff's coworkers, Darlene Yu, made racist remarks to plaintiff, threatened to “ ‘kick [her] ass,’ ” assaulted her on two occasions by “physically shouldering” her, and assaulted her on a third occasion by throwing an envelope that touched her. Plaintiff reported these events to management, but no one took any action. Plaintiff was a victim of racial harassment throughout her employment.

Beginning in April 2008, plaintiff was sexually harassed by her supervisor, Herber Corleto. He frequently commented on plaintiff's breasts and “ ‘butt’ ” and asked her to “ ‘sleep with [him].’ ” Corleto also asked plaintiff if she and her husband performed certain sexual acts.

One of plaintiff's coworkers, Raul Martinez, sexually harassed plaintiff by making crude sexual comments about her body, staring at her breasts, and asking her when they were going to have sexual relations. In June 2009, when plaintiff was drinking at the water fountain and was slightly bent down, Martinez “rubbed his genitalia against [plaintiff's] genitalia.” On another occasion in June 2009, Martinez touched plaintiff's breasts with his knuckles. From December 2009 through around June 2010, Martinez would often touch his genitalia in front of plaintiff and bite his lower lip. Plaintiff reported Martinez's conduct to management and the human resources department. She received no response.

In December 2008, plaintiff became pregnant. In February 2009, plaintiff's physician restricted her working conditions: She was not to lift more than 10 pounds or climb ladders or stairs. Plaintiff showed her managers a physician's note that listed the restrictions. Plaintiff was still required to lift merchandise exceeding 10 pounds. On one occasion she fell and injured herself while carrying a bag of clothes weighing more than 10 pounds.

In March 2010, plaintiff complained to Forever 21's senior human resources officer, Ms. Kim, about being sexually harassed. Kim told plaintiff to put her complaints in writing. Plaintiff sent Kim an e-mail, describing the acts of harassment and discrimination. Thereafter, plaintiff was contacted by Mr. Paredes, who worked in the human resources department. He delayed an investigation into plaintiff's complaints. In May 2010, Paredes informed plaintiff that he had completed the investigation, and “[n]othing came up.” After the investigation, Corleto and Martinez continued to harass plaintiff.

In January 2011, plaintiff e-mailed the human resources department and stated she was quitting “ ‘because of the harassment and discrimination.’ ” The department replied that plaintiff should attend a meeting scheduled for January 28, 2011, at 10:00 a.m., and two supervisory employees from the human resources department would meet with her. Plaintiff showed up for the meeting. She waited 20 minutes. No one else entered the room. Plaintiff turned in her badge and resigned.

The complaint contains nine causes of action, six of them under the Fair Employment and Housing Act (FEHA) (Gov.Code, §§ 12900–12996): (1) hostile work environment based on racial harassment ( id., § 12940, subd. (j)); (2) failure to prevent racial harassment and discrimination ( id., § subd. (k)); (3) race discrimination ( id., subd. (a)); (4) hostile work environment based on sexual harassment ( id., subd. (j)); (5) failure to prevent sexual harassment ( id., subd. (k)); and (6) retaliation ( id., subd. (h)). The remaining causes of action allege a violation of the Ralph Civil Rights Act of 1976 (Civ.Code, § 51.7); constructive discharge in violation of public policy; and intentional infliction of emotional distress. Named as defendants were Forever 21, Forever 21 Logistics, LLC, Darlene Yu, Herber Corleto, and Raul Martinez.

B. Motion to Compel Arbitration

On September 8, 2011, Forever 21, Forever 21 Logistics, LLC, Darlene Yu, and Herber Corleto (collectively defendants) filed a motion to compel arbitration of plaintiff's claims pursuant to the Federal Arbitration Act (FAA) (9 U.S.C. §§ 1–16) and the California Arbitration Act (CAA) (Code Civ. Proc., §§ 1280–1294.2; all undesignated section references are to the Code of Civil Procedure). Attached to the motion was an “Arbitration Agreement” (Agreement) dated November 13, 2007, and bearing a signature reading, “Maribel Baltazar.” In their supporting papers, defendants argued that the Agreement satisfied the arbitration standards set forth in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 99 Cal.Rptr.2d 745, 6 P.3d 669.

Plaintiff filed an opposition, asserting the Agreement was unconscionable. In a supporting declaration, plaintiff stated that on November 13, 2007, she had an interview at the Forever 21 warehouse in downtown Los Angeles. When she arrived, she was greeted by a Korean man, Mr. Chung, who introduced himself and handed her an employment application. The application consisted of 11 pages, several of which required plaintiff's signature at the bottom of the page. The signature lines were highlighted in yellow. Page 8 was entitled, “ AGREEMENT TO ARBITRATE.” The Agreement continued onto the ninth page, at the bottom of which was a yellow highlighted signature line. Plaintiff signed all of the signature lines in the application with the exception of the one for the Agreement. She handed the application to Chung. He reviewed the application and gave it back to her, saying she had to sign the Agreement. Plaintiff shook her head, indicating she would not do so. Chung took the application and spoke to another Forever 21 employee, Mr. Shin. The men spoke in Korean, and plaintiff did not understand what they said. Eventually, Shin told plaintiff, “ ‘sign it or no job.’ ” Plaintiff “had no other choice but to sign the [Agreement].” After plaintiff signed the Agreement, she was hired and started to work that day.

The motion to compel arbitration came on for hearing on October 7, 2011. The trial court denied the motion, stating the Agreement was unconscionable. The trial court found that the Agreement was substantively unconscionable because (1) it required the arbitration of employee—but not employer— claims, (2) it gave Forever 21 the right to take “ ‘all necessary steps' ” to protect its trade secrets or other confidential information, and (3) it mandated arbitration even if the Agreement was unenforceable.

Defendants appealed.

IIDISCUSSION

“ ‘ “Whether an arbitration provision is unconscionable is ultimately a question of law.” ’ ... ‘On appeal, when the extrinsic evidence is undisputed, as it is here, we review the contract de novo to determine unconscionability.’ ” (Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1511–1512, 105 Cal.Rptr.3d 585, citations omitted; accord, Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 174, 116 Cal.Rptr.2d 671 ( Mercuro ).)

“We interpret the Agreement ... in light of [its] plain meaning.... Under the plain meaning rule, courts give the words of the contract ... their usual and ordinary meaning.... ‘[W]e interpret the words in their ordinary sense, according to the plain meaning a...