Torrecillas v. Fitness International ( 2020 )

Filed 7/21/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
JOSE TORRECILLAS, B296194
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC717782)
v.
FITNESS INTERNATIONAL,
LLC,
Defendant and Appellant.
APPEAL from an order of the Superior Court of
Los Angeles County, Maureen Duffy-Lewis, Judge. Reversed.
Littler Mendelson, Fermin H. Llaguno and Oliver B.
Dreger for Defendant and Appellant.
Bononi Law Group, Michael J. Bononi, Christy W. Granieri
and Rebecca L. Claudet for Plaintiff and Respondent.
____________________
Jose Torrecillas agreed with his employer, Fitness
International, to arbitrate claims. Instead Torrecillas sued in
court. When Fitness moved to compel arbitration, the trial court
deemed the agreement unconscionable. But there was little or no
unconscionability of any sort. Fitness encouraged Torrecillas to
consult a lawyer and their agreement included a term allowing
amendments if both parties agreed. Torrecillas had the
opportunity to bargain and had meaningful bargaining power.
The agreement’s terms are standard, not shocking. Torrecillas
separately argues a different employee’s case against Fitness
preclusively dictates a conclusion of unconscionability, but that
case had different facts and a different holding. We reverse.
I
Torrecillas had a lengthy and successful career at Fitness,
according to his verified complaint.
In 1998, Torrecillas began as a sales associate at Fitness.
Fitness promoted him to general manager after only three
months. Torrecillas became Fitness’s highest paid general
manager nationwide from 2001 to 2006, partly due to
performance bonuses. Torrecillas set many all-time sales
records. Fitness awarded him recognition for Top Performing
Presale and Most Successful Grand Opening. Torrecillas’s
records still stood in 2017.
Torrecillas resigned from Fitness in 2007 but returned in
2008 as a sales manager. Fitness promoted him to general
manager of the Irvine club within only two months because he
was the highest performing sales manager in California. In
October 2008, Fitness promoted Torrecillas to general manager of
2
the Pico Rivera club, and then to general manager of the Downey
club in August 2011. In October 2011, Fitness asked Torrecillas
to take over as general manager of the Upland club because it
was the lowest-performing club in California and Torrecillas was
one of Fitness’s most successful general managers. In only 30
days, Torrecillas transformed the Upland club into Fitness’s
highest California performer.
Torrecillas’s excellent performance prompted Fitness to
promote him to District Vice President in November 2011.
Torrecillas was Fitness’s highest earning District Vice President
in the nation for several consecutive months. He was the only
Vice President nationwide to hit the full $10,000 possible in
performance bonuses.
In early 2013, Fitness promoted Torrecillas to Vice
President of Marketing and Sales. In this new position,
Torrecillas became accustomed to making well over $100,000 a
year from salary, bonuses, and commissions.
In September 2014, Fitness again promoted Torrecillas,
now to Vice President of Personal Training. A Fitness owner said
Torrecillas was the “first round draft pick” for this position.
As Vice President of Marketing and Sales and again as Vice
President of Personal Training, Torrecillas hired employees for
Fitness. Torrecillas oversaw 12 club locations.
Fitness fired Torrecillas on April 20, 2017. Torrecillas sued
Fitness on August 15, 2018. Fitness moved to compel arbitration.
We recount the arbitration agreements between Torrecillas
and Fitness. There were two: one in 2008, and another in 2013.
In 2008, Torrecillas signed an arbitration agreement when
Fitness rehired him as a sales manager. The agreement is two
3
pages long. It incorporates a 10-page document called “Dispute
Resolution Rules and Procedures” (Rules).
The second agreement to arbitrate was in 2013, after
Fitness promoted Torrecillas to Vice President of Sales and
Marketing. The evidence about the second agreement is as
follows.
To accompany its motion to compel arbitration, Fitness
supplied a declaration of its Vice President for Human Resources,
Mindy Stokesberry. According to Stokesberry, Fitness promoted
Torrecillas to Vice President of Sales and Marketing in or around
February 2013. At the same time he started in the new position,
Torrecillas and Fitness negotiated and executed this second
agreement, which Torrecillas signed in March 2013. During the
time he was entering this agreement, Torrecillas easily could
access the Rules via Fitness’s intranet. Stokesberry signed her
declaration on January 8, 2019.
Torrecillas submitted a one-page declaration, signed
January 17, 2019, in opposition to Fitness’s motion to compel
arbitration. Regarding his 2013 agreement, Torrecillas declared
Fitness promoted him to Vice President of Marketing and Sales
in or around January 2013. After working in this new position
for several months, Fitness presented Torrecillas with an
employment agreement and told him he must sign it to remain in
the position. Torrecillas declared he signed the agreement
“because I needed to in order to keep my job.”
Torrecillas’s declaration omitted all information about the
opportunity for and extent of contract negotiation with Fitness.
Torrecillas’s declaration thus is not inconsistent with
Stokesberry’s assertion that Fitness and Torrecillas, during the
process of promoting Torrecillas to Vice President of Marketing
4
and Sales, “negotiated and executed” this second employment
agreement, which Torrecillas signed in March 2013.
Torrecillas signed the second agreement, a seven-page
employment agreement, on March 10, 2013. The first paragraph
of this individualized document stated in printed font that it was
an agreement “between Jose Torrecillas” and Fitness. The
document then recited Fitness currently employed Torrecillas as
Vice President of Sales and Marketing and that Torrecillas
wished to continue to be employed by Fitness.
The 2013 agreement covered a range of standard topics:
conflict of interest rules; reimbursement policies; benefits;
proprietary information rules; unfair competition; and so on. One
topic was compensation. Torrecillas would earn a base salary of
$100,000 a year plus the possibility of bonus compensation.
Another topic, one introduced with an underlined heading, was
“Dispute Resolution.”
The 2013 agreement superseded earlier agreements. At
the same time, it partially incorporated the 2008 arbitration
agreement and the Rules as we now quote. The paragraph of the
2013 agreement titled “Dispute Resolution” says, with our italics,
“Except for claims for equitable relief . . . and except where the
law specifically forbids the use of arbitration as a final and
binding remedy, all disputes between Employee and [Fitness]
arising under this Agreement or relating to Employee’s
employment with [Fitness], including but not limited to the
termination of that relationship, any allegations of unfair or
discriminatory treatment arising under state or federal law, and
claims for compensation and benefits, shall be resolved exclusively
by final and binding arbitration in accordance with the [2008
5
arbitration agreement] and the [Rules], the provisions of which
are incorporated herein.”
The 2013 agreement stated it had been “negotiated by and
between the parties . . . .” The agreement also stated Fitness
advised Torrecillas to seek legal advice before signing. On the
same page—which was the page Torrecillas signed—a provision
allowed written amendments to the agreement.
The trial court denied Fitness’s motion to compel
arbitration because the agreement to arbitrate was
unconscionable. The trial court’s minute order was as follows:
“Non-negotiable contracts of adhesion are procedurally
unconscionable. In two places the agreement states that if
plaintiff refuses to sign, he will not be considered for
employment. ¶ Limits on discovery is substantively
unconscionable. The agreement limits depositions to 5, unless a
motion is made to the arbitrator. ¶ Both types of
unconscionability are present. ¶ The Motion to Compel
Arbitration filed by Fitness International, LLC on 01/09/2019 is
Denied.”
II
Our review is independent. (Pinnacle Museum Tower Assn.
v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223,
236 (Pinnacle).)
Torrecillas has the burden of proving unconscionability.
(OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126 (Kho) [party
asserting unconscionability must prove it].)
The Federal Arbitration Act (9 U.S.C. § 1 et seq.) (“the Act”)
applies, as Torrecillas agreed at oral argument. Torrecillas had
to concede this point: Fitness operates health clubs in many
6
states and Torrecillas’s employment related to this interstate
commerce. The Rules specifically adopt the Act as well.
The Act favors enforcement of arbitration agreements. (9
U.S.C. § 2.) California law, like federal law, strongly favors
arbitration. (Kho, supra, 8 Cal.5th at p. 125.)
Generally applicable contract defenses, like
unconscionability, can invalidate arbitration agreements. (9
U.S.C. § 2; Armendariz v. Foundational Health Psychcare
Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz).)
The unconscionability standard must be the same for
arbitration contracts as for any other contract. The Act preempts
state unconscionability rules that interfere with fundamental
attributes of arbitration. (AT&T Mobility LLC v. Concepcion
(2011) 563 U.S. 333, 341–344 (Concepcion); see Kho, supra, 8
Cal.5th at pp. 123–124.)
As a matter of general contract law, California courts
require both procedural and substantive unconscionability to
invalidate a contract. (Kho, supra, 8 Cal.5th at p. 125.) We apply
a sliding scale, meaning if one of these elements is present to only
a lesser degree, then more evidence of the other element is
required to establish overall unconscionability. (Ibid.) In other
words, if there is little of one, there must be a lot of the other.
We reverse because there was little or none of either
element.
A
There was little procedural unconscionability.
The procedural inquiry is about the manner in which the
parties formed the contract. (Baltazar v. Forever 21, Inc. (2016)
62 Cal.4th 1237, 1243 (Baltazar).)
7
An initial issue is whether the contract was an adhesion
contract. Adhesion contracts are form contracts a party with
superior bargaining power offers on a take-it-or-leave-it basis.
(Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 817
(Graham).)
Torrecillas says his 2013 agreement was a contract of
adhesion. This is not quite accurate. As we will explain, to a
degree the parties customized this agreement specifically to
Torrecillas, and Torrecillas did have an opportunity to negotiate;
Fitness did not offer the agreement on a stark take-it-or-leave-it
basis. But in all likelihood the contract’s text started as a form
on one of Fitness’s corporate word processors. There is no
evidence for the unlikely notion Fitness and Torrecillas sat down
and said, “Well, let’s see. What terms do you think the two of us
should put in this employment contract?”
Whether the agreement was or was not a contract of
adhesion is not the core question. Rather, from the standpoint of
determining whether there was procedural unconscionability, the
core issues are surprise and oppression.
Surprise differs from oppression. Surprise is when a prolix
printed form conceals the arbitration provision. (Kho, supra, 8
Cal.5th at p. 126.) Oppression, on the other hand, occurs when
there is a lack of negotiation and meaningful choice. (Ibid.) The
presence of surprise or oppression requires higher scrutiny of the
contract. (Baltazar, supra, 62 Cal.4th at p. 1245.)
Torrecillas does not and cannot argue surprise. The 2008
arbitration agreement had no elements of surprise. It was but
three pages long and was in a conventional font. Its title, in large
and bold font, was in plain English:
L.A. FITNESS INTERNATIONAL LLC EMPLOYMENT
8
APPLICATION AND ARBITRATION AGREEMENT
The Rules shared these features.
Neither was the 2013 employment agreement surprising.
It too was in conventional font. The pertinent heading was
underlined: “Dispute Resolution.” Earlier in this opinion, we
quoted and italicized the key language in this paragraph. Its
language is reasonably direct and clear. There is nothing
surprising about it.
We proceed to the question of oppression.
Oppression is the absence of negotiation or meaningful
choice. (Pinnacle, supra, 55 Cal.4th at p. 247.)
Form contracts are not per se oppressive, but they do carry
a danger of oppression. (See Graham, supra, 28 Cal.3d at p. 818.)
There may be a worrisome imbalance in bargaining power. The
most sought-after employees can counter this pressure in the
employment context. (Cf. Kho, supra, 8 Cal.5th at p. 127
[economic pressure exerted by employers may be particularly
acute on all but the most sought-after employees].)
We examine the manner and circumstances of the 2013
agreement to discern whether there was an absence of
negotiation or meaningful choice.
Torrecillas agreed to arbitrate in 2008 and again in 2013.
In his respondent’s brief, he analyzes the circumstances of the
2008 agreement without explaining how, even if we found this
earlier agreement flawed, it would negate the more recent one.
The 2013 agreement says all disputes relating to Torrecillas’s
employment must be resolved by arbitration. We analyze this
more recent agreement.
The evidence shows Torrecillas and Fitness negotiated his
2013 employment agreement. The Stokesberry declaration
9
establishes this fact. The text of the agreement does as well.
That agreement likewise states Fitness advised Torrecillas that
he should seek legal advice before executing the agreement, that
he understood his right to consult with counsel, and that he was
voluntarily and freely entering the agreement. The agreement
also states the parties may amend the agreement so long as
amendments are in writing and signed by Torrecillas and
Fitness.
Torrecillas’s version of events is not inconsistent with
Stokesberry’s version and with the text of the agreement.
Torrecillas declared Fitness presented him with an employment
agreement “and told me I must sign it to remain in the position.
I signed the Employment Agreement because I needed to in order
to keep my job.” Fitness told Torrecillas he had to sign an
employment agreement to remain Vice President of Marketing
and Sales, where Fitness was paying him over $100,000 a year.
Fitness and Torrecillas negotiated the agreement, as Fitness
asserted and as Torrecillas did not dispute.
The contracting process here contrasts with the recent Kho
case. In Kho, an extreme level of procedural unconscionability
infected car mechanic Ken Kho’s agreement to arbitrate with his
employer, an auto dealership called One Toyota of Oakland.
(Kho, supra, 8 Cal.5th at pp. 126–129.) Kho differs from this case
in seven ways.
1. In Kho, Toyota made Kho sign the arbitration
agreement “immediately.” (Kho, supra, 8 Cal.5th at
p. 127.) Kho had no time even to read the documents.
(Id. at p. 118.) Here, Torrecillas presented no
evidence Fitness exerted time pressure.
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2. In Kho, Toyota had a “porter” present the document
to Kho at his work station, thus compounding the
demand for an immediate signature with the
message the low level porter could explain and
negotiate nothing. (Kho, supra, 8 Cal.5th at pp. 118,
127.) Fitness, by contrast, delivered the opposite
message to Torrecillas: Fitness wanted an
employment agreement of some sort, but its terms
were negotiable.
3. In Kho, the employer used a piece-rate compensation
system, meaning any time Kho spent reviewing the
agreement at his work station reduced his pay. (Kho,
supra, 8 Cal.5th at p. 127.) Fitness, by contrast, paid
Torrecillas an annual salary. Fitness’s compensation
system did not encourage Torrecillas to sign swiftly
or thoughtlessly.
4. The agreement in Kho was a “paragon of prolixity” in
“extremely small font” that was barely legible. (Kho,
supra, 8 Cal.5th at p. 128.) None of these defects
plagued Torrecillas’s contracts. The fonts and
wording were conventional. Torrecillas reported no
difficulty in reading or comprehending them.
5. In Kho, the employer made it impossible for Kho to
consult with an attorney about the deal. (Kho, supra,8 Cal.5th at p. 127.) Here, Fitness encouraged it.
6. Toyota did not give Kho a copy of what he had signed.
(Kho, supra, 8 Cal.5th at p. 128.) Torrecillas,
however, had unrestricted computer access to the
Rules. Or, “if he preferred, he was able to obtain a
hard copy from the Human Resources department.”
11
7. Car mechanic Kho had the same job at a Toyota
dealership for only about four years. (Kho, supra, 8
Cal.5th at pp. 118–119.) The facts showed Kho to be
an undistinguished novice, fungible from his
employer’s perspective. Torrecillas was different.
Fitness had employed Torrecillas for decades and
knew his worth to the company. Torrecillas proved
his outstanding value to Fitness, which steadily
promoted him, gave him awards, and eventually put
him in a position of hiring and managing other
employees. Torrecillas had long-term and significant
experience with corporate culture. He negotiated his
employment agreement while his career was in
ascent: Fitness had just given him one big promotion
and the following year would give him another,
telling him he was the “first round draft pick” for the
next promotion. Torrecillas’s bargaining position
with Fitness was different than Kho’s with Toyota.
Torrecillas points to a 1997 case, Stirlen v. Supercuts, Inc.
(1997) 51 Cal.App.4th 1519, but that case is inapposite for three
reasons. First, undisputed evidence in Stirlen showed the
contract terms were nonnegotiable (id. at p. 1534), but Fitness
asserted and offered evidence the contract here was negotiable.
Second, the Stirlen court found significant substantive
unconscionability including lack of mutuality due to several one-
sided provisions in the arbitration agreement. (Id. at pp. 1536–
1542.) As we explain in the next section, the level of substantive
unconscionability in this case is small or nil. Finally, Stirlen was
decided before the United States Supreme Court case Concepcion,
supra, 563 U.S. 333. Post-Concepcion, aside from quoting two
12
words from Stirlen as part of a list of different substantive
unconscionability standards, the California Supreme Court has
not mentioned Stirlen. (See Sonic-Calabasas A., Inc. v. Moreno
(2013) 57 Cal.4th 1109, 1145; Sanchez v. Valencia Holding Co.,
LLC (2015) 61 Cal.4th 899, 910 (Sanchez); Baltazar, supra, 62
Cal.4th at p. 1244; Kho, supra, 8 Cal.5th at p. 129.)
As Torrecillas’s employer and the primary drafter of the
agreement, Fitness had some level of superior bargaining power.
Yet Torrecillas points to no sharp practices triggering a higher
level of contract scrutiny. (Baltazar, supra, 62 Cal.4th at p. 1245
[no heightened scrutiny because employer did not lie to employee,
place employee under duress, or otherwise manipulate employee
into signing].)
In sum, Torrecillas encountered little procedural
unconscionability.
For Torrecillas to invalidate his agreement, then, minimal
procedural unconscionability means Torrecillas would have to
demonstrate a high degree of substantive unconscionability. We
turn to that topic.
B
There was little or no substantive unconscionability.
The substantive inquiry considers whether the overall
bargain is overly harsh or unreasonably one-sided. (Armendariz,
supra, 24 Cal.4th at p. 114.) California courts have stated the
standard variously, defining it as, for example: so one-sided as to
shock the conscience (Pinnacle, supra, 55 Cal.4th at p. 246);
unduly oppressive (Perdue v. Crocker National Bank (1985) 38
Cal.3d 913, 925); and unfairly one-sided (Little v. Auto Stiegler,
Inc. (2003) 29 Cal.4th 1064, 1071). Our high court has
acknowledged these variations and has clarified the differing
13
formulations mean the same thing. (Sanchez, supra, 61 Cal.4th
at p. 911.)
Torrecillas’s deal with Fitness does not shock the
conscience, for its terms are standard rather than shocking.
Torrecillas says seven provisions are shocking. This attack
fails.
First, Torrecillas says the agreement unreasonably limits
discovery. Under the Rules, initial disclosure requires each party
swap “any and all documents relevant to any claim or defense.”
Each party is entitled to 30 interrogatories and five depositions.
A party may request documents the opposing party used to
support interrogatory responses. The arbitrator may permit
additional discovery at a party’s request and after a showing of
substantial need.
The trial court found substantive unconscionability based
on the five-deposition limit. The finding of procedural
unconscionability based on discovery limitations was incorrect for
three reasons.
First, Torrecillas submitted no evidence that five
depositions were too few or that other discovery limits created
significant barriers to pursuing his claims. (Baxter v. Genworth
North America Corp. (2017) 16 Cal.App.5th 713, 729
[unconscionability requires a factual showing that the discovery
limitations would as a practical matter thwart employees’ ability
to prove their particular claims].) In his appellate brief,
Torrecillas argues he requires certain documents and witnesses
to pursue his claims. Arguments are not evidence.
Second, the arbitrator can grant discovery beyond these
limits on a showing of substantial need. We must presume the
arbitrator will behave reasonably. (Dotson v. Amgen, Inc. (2010)
14
181 Cal.App.4th 975, 984.) Torrecillas suggests no basis for a
contrary presumption.
Third, limiting discovery is one point of arbitration. A
central goal is efficiency. A streamlined discovery process
promotes this goal. (Armendariz, supra, 24 Cal.4th at p. 106, fn.
11 [discovery limits effectuate the simplicity, informality, and
expedition that are important goals of arbitration].)
We also address the specific discovery provisions
Torrecillas challenges. At the outset we underline each provision
is flexible, not rigid, because the arbitrator may permit additional
discovery at a party’s request and after a showing of substantial
need.
The deposition limit is standard. (See Sanchez v. Carmax
Auto Superstores Cal., LLC (2014) 224 Cal.App.4th 398, 405–406
[three depositions not unconscionable]; Armendariz, supra, 24
Cal.4th at p. 105, fn. 10 [no depositions unless approval from
arbitrator is adequate discovery].) A limit of five depositions is
not shocking.
The limit of 30 interrogatories is more than federal court
rules confer and is not shocking. (See Fed. Rules Civ. Proc., rule
33, 28 U.S.C. [no more than 25].)
The absence of provisions for requesting documents and
admissions is not substantively unconscionable. Torrecillas can
get documents through the initial disclosures and interrogatories.
And if he requests and shows a substantial need, he can get
additional discovery. This process does not prevent Torrecillas
from propounding document demands or requests for admissions.
Torrecillas raises another argument about discovery,
styling it as a distinct argument from unconscionability. He says
the discovery procedures render the arbitration agreement
15
unenforceable as a matter of law under Armendariz, supra, 24
Cal.4th 83. Specifically, he says the five deposition limit and
absence of provisions for requesting documents and for
requesting admissions are inadequate to prosecute his claims for
unwaivable statutory rights. Like his argument that these
discovery procedures are unconscionable, this argument also
fails.
Under Armendariz, Torrecillas is entitled to “adequate,”
not unlimited, discovery. (Armendariz, supra, 24 Cal.4th at pp.
105–106.) Torrecillas has no evidence showing discovery was
inadequate. Furthermore, these procedures sufficed under
Armendariz. Adequate discovery includes access to essential
documents and witnesses, as determined by the arbitrator. (Id. at
p. 106.) Armendariz found adequate discovery when the parties
needed the arbitrator’s approval to take any depositions. (Id. at
p. 105, fn. 10.) Here, Torrecillas is entitled to five depositions
regardless of the arbitrator’s approval. Armendariz approved of
arbitrator discretion. Here, the arbitrator has discretion to allow
additional discovery, including more depositions, document
requests, or requests for admissions. The discovery procedures
are enforceable as a matter of law.
Thus, Torrecillas’s discovery arguments all fail.
Next we turn to the six other provisions Torrecillas says
are substantively unconscionable.
Torrecillas argues the agreement is overbroad. The 2013
agreement limits the scope of arbitration to disputes between
Fitness and Torrecillas arising under the 2013 agreement or
relating to Torrecillas’s employment. This is not overbroad. This
is an employment contract. It pertains to employment. It is not
unfair.
16
Torrecillas cites language from the 2008 agreement and the
Rules to say Torrecillas’s agreement is overbroad. He is
incorrect. The 2008 agreement was broader and applied to
controversies “whether or not arising out of or related to my
application, employment, or its termination.” The 2013
agreement, however, superseded the 2008 agreement and the
Rules. The 2013 agreement said the types of disputes it listed,
those arising under the 2013 agreement or relating to
employment, must be resolved, with our emphasis, “in accordance
with the [2008 arbitration agreement] and the [Rules], the
provisions of which are incorporated herein.” In doing so, the
2013 agreement followed the 2008 agreement and the Rules, but
only for the types of disputes the 2013 agreement listed. To the
extent the 2008 agreement or the Rules included a broader scope,
the 2013 agreement thus narrowed that scope. The 2013
agreement is not overbroad.
His third argument, lack of mutuality, similarly fails. An
agreement lacks mutuality if it requires one party but not the
other to arbitrate claims. (Armendariz, supra, 24 Cal.4th at p.
120.) The 2013 agreement requires arbitration of “all disputes
between [Torrecillas] and [Fitness].” This demonstrates
mutuality, not unconscionability.
Torrecillas incorrectly claims in his fourth and fifth
arguments the agreement improperly bars him from pursuing a
cause of action under the Unfair Competition Law (Bus. & Prof.
Code, § 17200 et seq.) and under the Private Attorneys General
Act (Lab. Code, § 2698).
As for the Unfair Competition Law claim, Torrecillas brings
one cause of action under the law but he seeks the type of relief
that is arbitrable. He alleges Fitness failed to pay him wages on
17
time and failed to reimburse him for business expenses. He seeks
two types of relief: 1) “full restitution, disgorgement, and/or
specific performance of payment of all wages that have been
unlawfully withheld” and 2) an injunction prohibiting Fitness
from “continuing to engage in the practices described above.”
Both types of relief are arbitrable.
Unfair Competition Law actions for equitable monetary
relief, including restitution and disgorgement, are arbitrable
(Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303,
320 (Cruz)), making the first type of relief Torrecillas seeks
arbitrable.
Torrecillas’s request for an injunction is private in nature
and therefore arbitrable. Cruz limited arbitration of claims for
public injunctive relief, not claims for private injunctive relief.
(Clifford v. Quest Software Inc. (2019) 38 Cal.App.5th 745, 751
(Clifford); McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 955–956
(McGill) [distinguishing public injunctive relief from private
injunctive relief and stating Cruz applies to public injunctive
relief].) Relief that would primarily redress or prevent injury to
an individual plaintiff or to a group of individuals similarly
situated to the plaintiff is not public injunctive relief. (McGill,
supra, 2 Cal.5th at p. 955.)
Torrecillas sought a private injunction, which is arbitrable.
His request was for an injunction to stop Fitness from engaging
in the practices “described above.” Those practices were Fitness’s
alleged failures to pay Torrecillas. The beneficiary of an
injunction would be Torrecillas and possibly Fitness’s current
employees, not the public at large. (Clifford, supra, 38
Cal.App.5th at p. 753 [injunction to prevent employer from
committing further unfair business practices was a request for
18
private injunctive relief that could help only current employees
rather than the public at large]; cf. Cruz, supra, 30 Cal.4th at p.
315 [injunction to prevent health insurer’s alleged deceptive
advertising practices was “clearly for the benefit of health care
consumers and the general public” and therefore not arbitrable].)
Torrecillas’s Unfair Competition Law claims thus are arbitrable.
As for the claim about the Private Attorneys General Act,
Torrecillas’s argument is odd because he did not sue under that
law. Nonetheless, as to claims under both laws, the 2013
agreement resolves any conflict between the laws and arbitration
by excluding arbitration “where the law specifically forbids [it].”
So the agreement steers clear of what, in this case, is not an
issue. This does not demonstrate unconscionability.
His sixth and seventh arguments, about filing fees, also
fail. To initiate arbitration, an employee must pay Fitness a
filing fee “equivalent to the amount required for the employee to
file a complaint in court.” Fitness would pay any remaining filing
fee the arbitrator required. Torrecillas says this provision is
unfair, and he challenges the absence of a fee exception for
indigent people. Armendariz, supra, 24 Cal.4th at pages 111–
112, explains arbitration cannot require the employee to bear
expenses the employee would not have to bear if the employee
could bring the action in court. By pegging the fee to the fee an
employee would have to pay in court, the agreement complies
with Armendariz. Torrecillas does not claim indigence or show
he would qualify for a fee exception. Even if he did, again, the fee
agreement is keyed to what an employee would have to pay to file
in court. That means an employee who would qualify for a fee
waiver in court would owe the “equivalent” amount in
19
arbitration, which would possibly be nothing. The filing fees do
not shock the conscience.
Torrecillas has not shown a high level of substantive
unconscionability. His unconscionability defense fails.
III
Torrecillas incorrectly says issue preclusion prevents
Fitness from compelling arbitration.
Issue preclusion applies:
(1) after final adjudication;
(2) of an identical issue;
(3) actually litigated and necessarily decided; and
(4) asserted against one who was a party in the first suit.
(Samara v. Matar (2018) 5 Cal.5th 322, 327.)
The purportedly preclusive case is the unpublished case
Pimpo v. Fitness International, LLC (Sept. 13, 2017, D071140)
(Pimpo).
The trial court did not rule on issue preclusion. Its order
said nothing about Pimpo.
The Pimpo court affirmed a trial court order denying
Fitness’s motion to compel arbitration. (Pimpo, supra, D071140
at pp. [23–24].) The employee in that case agreed to arbitrate
when she applied online to work for Fitness. (Id. at p. [12].)
Fitness hired her to work at a gym. (Id. at p. [2].) Within a week
of starting work, she said a coworker began sexually harassing
her. (Ibid.) She filed a lawsuit against Fitness alleging sexual
harassment, failure to prevent sexual harassment, and other
causes of action. (Id. at p. [3].) The employee’s only agreement to
arbitrate was the one in her employment application, which had
expired before she brought her lawsuit. (Id. at pp. [12–13].)
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In analyzing procedural unconscionability, the Pimpo court
noted the employee’s agreement was part of her employment
application and the employee declared she lacked the money for
an attorney to review her job applications. (Pimpo, supra,
D071140 at pp. [13–14].) The court also found the scope of the
arbitration agreement “incredible” because it could apply if she
got into a car accident with a Fitness employee or if she hurt
herself on workout equipment as a gym member. (Id. at p. [16].)
The Pimpo case has no preclusive effect on Torrecillas’s
case because the issue is not identical. Unconscionability is a
fact-specific defense. (Kho, supra, 8 Cal.5th at p. 124.) The
employee in Pimpo signed the agreement when she applied for
the job. She declared she could not afford an attorney. The facts
are different here—radically so. Torrecillas was not applying for
a job but receiving a promotion. He signed the 2013 agreement
as an award-winning employee with a long tenure at Fitness. He
had been District Vice President, was starting a job that paid six-
figure compensation, and was silent about whether he could
afford an attorney to review his employment contract.
Torrecillas’s argument also relies on similarities between
the Pimpo agreement and his 2008 agreement, but this ignores
the pertinent and different 2013 agreement. As we have
explained, the 2013 agreement limited the scope of arbitration to
disputes relating to the agreement and Torrecillas’s employment.
Torrecillas’s agreement did not include the types of disputes the
Pimpo court described because a car accident with a Fitness
employee or an injury from fitness equipment as a gym member
would not be related to the agreement or related to his
employment. The Pimpo case does not control.
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DISPOSITION
The order is reversed. On remand, the trial court shall
compel arbitration of all arbitrable claims. Costs are awarded to
Fitness International, LLC.
WILEY, J.
We concur:
BIGELOW, P. J.
STRATTON, J.
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