DocketNumber: Case No. 18-cv-02642-EMC
Citation Numbers: 371 F. Supp. 3d 610
Judges: Chen
Filed Date: 1/17/2019
Status: Precedential
Modified Date: 7/25/2022
I. INTRODUCTION
On August 8, 2018, Plaintiff filed the First Amended Complaint ("FAC"). Docket No. 16 ("FAC"). Defendant filed a Motion to Compel Arbitration on August 30, 2018. Docket No. 17 ("Mot."). Both parties were heard on the matter on October 25, 2018.
II. FACTUAL & PROCEDURAL BACKGROUND
This is the second motion to compel arbitration filed in this case. Rather than respond to the first motion to compel arbitration, Plaintiff filed her FAC, raising for the first time a PAGA claim. Compare *616Compl., with FAC. Plaintiff has since conceded that her PAGA claim is barred by the statute of limitations. Docket No. 18 ("Opp.") at 23-24.
Plaintiff's claims arise under the Federal Labor Standards § 16(b); California Labor Code §§ 226.7(a), 512(a), 226(a), 201 - 203, 221 - 224 et seq. , 2699 ; and California Business and Professions Code § 17200 et seq. FAC. Plaintiff argues that she and other class members are entitled to premium wages for overtime pay based on a regular rate with commission and bonuses. Id. ¶ 9. Plaintiff contends that Defendant denied her, and other class members, minimum wages owed to her and others based on overtime work laws, wages upon discharge, and compensation for meals and rest breaks. Id. Similarly, Plaintiff argues that Defendant failed to keep accurate payroll and wage statements in accordance with California law. Id.
Plaintiff worked as an employee of Defendant from December 2015 to June 2016. Id. ¶ 14. Her role was that of a mortgage specialist in Orange County, California. Id. She contends that in that position she regularly worked over eight hours a day without overtime pay or compensation for rest breaks. Id.
After Plaintiff filed the FAC, Defendant moved to compel arbitration and to dismiss the action under Federal Rule of Civil Procedure rules 12(b)(6) and 12(b)(1). Mot. The basis for this motion is an arbitration agreement in Plaintiff's employment contract. Id. at 10.
Plaintiff opposes the motion to compel arbitration on several grounds. She claims that Defendant waived its right to arbitrate. She argues that the actual agreement is not valid because the express language of the agreement required a signature from the Executive Vice President, which was not satisfied. Opp. at 12. Plaintiff also contends that California law rather than Illinois law governs the contract despite a choice of law provision in the contract. Id. at 14-15. Defendant does not address this contention in its papers.
Plaintiff also challenges the arbitration agreement based on unconscionability. She asserts that the arbitration agreement is procedurally unconscionable because it is a contract of adhesion, and because Plaintiff did not receive a copy of the AAA rules which govern the arbitration agreement. Id. at 22-24.
Plaintiff further contends that the arbitration agreement is substantively unconscionable because the agreement requires her to arbitrate the types of claims an employee is most likely to bring while allowing Defendant the option to avoid arbitration for the types of claims that an employer is most likely to bring. Similarly, she takes issue with the conscionability of the choice of law provision as it requires Plaintiff to waive unwaivable claims. Id. at 24-29. Plaintiff also challenges, as unconscionable, a fee shifting provision and the forum selection clause. Id. Finally, Plaintiff asserts that the defects in the arbitration agreement cannot be severed; therefore, if the Court finds that the contract is unconscionable, she claims that the Court cannot apply the agreement's severability clause. Id. at 30-32.
After the hearing, Plaintiff informed the Court that there is a parallel case in Sacramento County Superior Court (Tadena v. Guaranteed Rate, Inc., et al. , Case No. 32-2018-00232323 (Sac. Super. Ct. 2018) ). The Tadena case is a class action with some overlapping claims to those in the present matter.
A. The Contract
The relevant provisions of the arbitration agreement read:
*617V. YOUR CONFIDENTIALITY OBLIGATIONS; NON-SOLICITATION
...
(d) Non-Solicitation
...
(i) Employees
During the Restricted Period, you may not, directly or indirectly, hire, solicit, or encourage any Person employed by the Company during the last 12 months of employment with the Company or during the remainder of the Restricted Period to end their employment with the Company and/or join you as a partner, agent, employee, independent contractor or otherwise in a business venture or other business relationship. During the Restricted Period, you may not supervise, manage, or oversee the work of any former employee of the Company, the identity of which you learned during your employment with the Company....
(ii) Vendors ....
VII. MANDATORY ARBITRATION AND WAIVER OF RIGHT TO SUE AND RIGHT TO FILE ANY CLASS OR COLLECTIVE ACTION.
(a) Arbitration
Any and all claims (legal or equitable), demands, disputes, or controversies between you and the Company must be resolved by arbitration in accordance with the rules of the American Arbitration Association then in existence. Such arbitration shall take place in Chicago, Illinois, the applicable law will be the laws of the State of Illinois without regard to the conflicts of law provisions therein and the decision of the arbitrator shall be final and binding on you and the Company. Without limiting the foregoing, the following claims must be resolved by arbitration:
(i) Claims related to your compensation with the Company brought under any federal, state or local statute, law, ordinance, regulation or order or the common law of any state, including without limitation claims relating to your wages, salary increases, bonuses, commissions, overtime pay, vacation pay, or severance pay whether or not such claim is based upon a legally protected right, whether statutory, contractual or common law; and
(ii) Claims brought under any federal, state or local statute, law, ordinance, regulation or order, or the common law of any state, alleging that you were or are being subject to discrimination, retaliation, harassment, or denial of equal employment opportunity based on sex, race, color, religion, national origin, disability, age, marital status, or any other category protected by law; and/or relating to your benefits or working conditions, including without limitation, claims related to leaves of absence, Employee benefit plans, Employee health and safety, and activity protected by federal labor laws.
(b) Waiver of Right to Sue and Right to File any Action as a Class or Collective Action
With respect to any and all claims made by you, there will be no right or authority for any dispute to be brought, heard or arbitrated under this Agreement as a class or collective action, private attorney general, or in a representative capacity on behalf of any Person.
(c) Exclusions
The mandatory arbitration provisions of this agreement do not apply to: (i) any claim by you for workers compensation benefits or unemployment compensation benefits; (ii) any claim for injunctive or equitable relief, including without limitation claims related to unauthorized disclosure *618of confidential information, trade secrets or intellectual property; or (iii) any action brought relating to or arising out of any non-solicitation violations.
IX. ATTORNEYS' FEES AND COSTS; INJUNCTIVE RELIEF
The Company may recover from you its attorneys' fees and costs relating to any action to enforce, defend and/or prosecute this Agreement. You acknowledge that a breach of any provision of this Agreement will cause irreparable harm to the Company and that monetary damage will be inadequate and may be difficult or impossible to ascertain. Therefore, in the event of any such breach, or threatened breach, in addition to all other remedies, the Company shall have the right to require you to fulfill your obligations by way of temporary and/or permanent injunctive relief.
X. MISCELLANEOUS
... This agreement will be effective only after it has been fully executed by you and either the Company's President and CEO or the Executive Vice President of Strategy and Integrated Operations....
To the extent a court of competent jurisdiction determines any provision is not enforceable, the parties agree that the court may modify the provision to the minimum extent necessary to make the provision enforceable. Further, any such invalid provision shall not invalidate the remaining provisions, which shall remain in full force and effect.
Docket No. 18-2 ("Plaintiff's Exhibit 1") at 13-15.
III. DISCUSSION
A. Legal Standard
Arbitration agreements are "valid, irrevocable, and enforceable."
State law principles govern when making determinations regarding the validity of an arbitration agreement. Ambler ,
Neither party questioned whether the Court (as opposed to an arbitrator) may determine arbitrability.
*619B. Waiver of Right to Arbitrate
Plaintiff argues that Defendant has waived its right to arbitrate because in a separate case, a class action overlapping with the present matter in which Plaintiff is also a class member, Defendant has moved to settle the class action rather than seek arbitration. In particular, plaintiff in Tadena v. Guaranteed Rate Inc. raises several claims that overlap with the current matter: failure to indemnify ( Labor Code § 2802 ), wage statement penalties ( Labor Code § 226 ), wage statement penalties ( Labor Code §§ 201 - 203 ), and two derivative claims under Bus. & Prof. Code §§ 17200, et seq. and ( Labor Code §§ 2698, et seq. ). The proposed settlement agreement in Tadena "would release all of the claims alleged in Tadena " as well as those alleged in this matter. Docket No. 34 ("Plaintiff's Supp. Brief") at 2.
Plaintiff contends that Defendant acted inconsistently with the right to arbitrate "by invoking court proceedings in Tadena in an effort to obtain a binding court judgment which it can then offensively assert against an entire class of similarly situated employees, including Turng."
Plaintiff argues that she has been prejudiced because "Defendant has manipulated the judicial process" in failing to inform this Court of the Tadena matter, failing to inform the court in the Tadena matter of these proceedings, and failing to inform Plaintiff and her counsel, of Defendant's "inconsistent actions by including in the Tadena release the claims asserted in the Turng action." Id. It is her view that because the court in Tadena has already given preliminary approval and notices have been sent out, Plaintiff must choose between opting out of the Tadena class and pursuing claims herein, or "abdicating the fiduciary responsibilities she owes to the putative Turng class (by participating in the Tadena settlement -- even if she participates strictly to maintain her right to object) or losing her right to object in Tadena if she opts-out of the Tadena class, thereby letting Tadena wipe out viable claims that have never been alleged in Tadena and which Turng has sworn to protect in Turng ." Id.
"The right to arbitration, like any other contract right, can be waived." United States v. Park Place Assocs., Ltd. ,
Defendant does not argue that it did not know it could arbitrate.
1. Inconsistent Actions
"There is no concrete test to determine whether a party has engaged in acts that are inconsistent with its right to arbitrate." Martin v. Yasuda ,
Plaintiff cites to one case to support her contention that Defendant has acted inconsistently with the right to arbitrate, St. Mary's Medical Center of Evansville, Inc. v. Disco Alumni Products Co., Inc. She cites this out of circuit case for the proposition that: "Submitting a case to the district court for decision is not consistent with a desire to arbitrate." St. Mary's Med. Ctr. of Evansville, Inc. v. Disco Aluminum Prod. Co. ,
Plaintiff fails to point the Court to any cases in which allegedly inconsistent conduct in a separate case involving a different party can waive the right to arbitrate. See Lemus v. CMH Homes, Inc. ,
2. Prejudice
Even if waiver could be asserted based on inconsistent actions in a different case, Plaintiff fails to show prejudice necessary to establish waiver. To establish prejudice, Plaintiff "must show that, as a result of the defendants having delayed seeking arbitration , they have incurred costs that they would not otherwise have incurred, that they would be forced to relitigate an issue on the merits on which they have already prevailed in court, or that the defendants have received an advantage from litigating in federal court that they would not have received in arbitration[.]" Yasuda ,
Plaintiff contends that she has been prejudiced in three ways: (1) "Defendant has sought to invoke court proceedings in Tadena in an attempt to obtain class wide court judgment to block not only all the claims in Tadena but also substantial additional claims alleged in Turng "; (2) "Defendant has manipulated the judicial process by failing to inform this Court ... in the Turng matter, and Turng and her counsel of its inconsistent actions by including in the Tadena release the claims asserted in the Turng action"; and (3) "as a proposed class representative in the Turng case, she has a fiduciary duty to protect the class she seeks to represent" but she is presented with the option of "opting out or participating in the Tadena class action." Plaintiff's Supp. Brief at 4 (emphasis in original).
Plaintiff's first argument goes to the scope of the class settlement before a different court and is not appropriate for this Court to resolve. As to the third argument, the fact that Plaintiff may be deprived of the opportunity to represent the class in this case because of the settlement in Tadena , that is a result of the Tadena case generally, not GRI's invocation of arbitration in this case.
With respect to Plaintiff's bad faith argument, she does not explain how the failure to inform the court of Defendant's inconsistent actions prejudiced her. Instances in which a party uses a delay in seeking arbitration to its advantage would show prejudice to a party; however, Plaintiff has not shown that Defendant has received an advantage in this case. See Christensen v. Dewor Developments ,
Moreover, Defendant has not delayed seeking arbitration in this matter. The three cases Plaintiff cites do not support a claim of prejudice resulting from a delay in seeking arbitration in other litigation. All involve delay within the same case. Cf. Yasuda ,
C. Valid Signature
Plaintiff challenges the existence of a contract containing the arbitration clause on the grounds that (1) the copy of the contract with the arbitration agreement she provided to the court does not include any signature from a representative of Defendant, and (2) Defendant's copy of the agreement has a signature from Nikolaos Anthansiou "who, at the time of signing, held neither the CEO position nor the Executive Vice President of Strategy and Integrated Operation position", which the agreement explicitly required. Opp. at 3. The employment contract does states that in order for the contract to be effective, it must have the signature of the CEO/President or the Executive Vice President of Strategy and Integrated Operations. Plaintiff's Exhibit 1 at 15.
Defendant contends that even though Mr. Anthansiou held the new title of Chief Operations Officer when he signed the contract, he was never divested of his previous role as Executive Vice President. Docket No. 19 ("Reply") at 6-7. Thus, despite Mr. Anthansiou's new title, he still had the authority to sign the employment contract.
As to Plaintiff's assertion the contract was not signed at all, Defendant has produced a signed copy. Plaintiff has not produced any persuasive evidence to cast doubt on the authenticity of that document. Plaintiff's copy of an unsigned copy does not negate the existence of a signed copy. Plaintiff produced no evidence of, e.g. , fraud.
In any event, California Civil Code section 3388 states "[a] party who has signed a written contract may be compelled specifically to perform it, though the other party has not signed it, if the latter has performed, or offers to perform it on *623his part, and the case is otherwise proper for enforcing specific performance."
Just as with any written agreement signed by one party, an arbitration agreement can be specifically enforced against the signing party regardless of whether the party seeking enforcement has also signed, provided that the party seeking enforcement has performed or offered to do so. [In this case, the party seeking to avoid arbitration] does not, and cannot, dispute that [the party seeking to enforce the arbitration agreement] has at all times performed all the duties required of it under the arbitration agreement. In this case, [the party seeking to enforce the arbitration agreement] has carried its burden in proving the arbitration agreement is a mutually binding agreement.
Serafin v. Balco Properties Ltd. , LLC ,
Here, Plaintiff does not argue that she and the Company did not perform under the contract. Thus, California Civil Code section 3388 which has been applied in the context of an employment arbitration agreement, governs even if Mr. Anthansiou had not signed. Serafin ,
Accordingly, an enforceable contract exists.
D. Choice of Law
Plaintiff challenges the choice of law provision both as it is applied in this case and facially as unconscionable. As applied here, she contends that California law governs this matter despite the existence of a choice of law provision in the contract requiring Illinois law to apply. Opp. at 14-21.
"As a threshold matter" when deciding whether a choice of law provision applies, "a court must determine whether the chosen state has a substantial relationship to the parties or their transaction, or ... whether there is any other reasonable basis for the parties' choice of law." Ruiz v. Affinity Logistics Corp. ,
Defendant makes no attempt to show that Illinois law, rather than California law, should govern. Plaintiff contends that *624Illinois labor code is contrary to a fundamental California policy (meaning the labor code provisions at issue here); therefore, this Court must apply California law. Opp. at 18-19. Defendant does not provide a challenge to Plaintiff's assertion that California law applies, but instead argues that the arbitration agreement applies under Illinois or California law.
As Defendant does not challenge Plaintiff's assertion that California substantive law should apply here, the Court will apply California law.
E. Unconscionability
Arbitration clauses can be invalidated based "upon such grounds as exist at law or in equity for the revocation of any contract" such as unconscionability.
1. Procedural Unconscionability
Procedural unconscionability refers to unequal bargaining power resulting from no real negotiation and the absence of a meaningful choice. Dean Witter Reynolds, Inc. v. Superior Court ,
a. Defendant's Failure to Provide AAA Rules
Plaintiff argues that because Defendant did not provide Plaintiff with a copy of the AAA rules, nor was she told where to find a copy of the rules, the arbitration agreement is procedurally unconscionable. Opp. at 23. A failure to provide AAA rules that govern an arbitration agreement can sometimes amount to procedural unconscionability where the challenge to conscionability "concerned some element of the AAA rules of which she had been unaware when she signed the arbitration agreement." Baltazar v. Forever 21, Inc. ,
Courts have also found that when AAA rules are incorporated by reference, courts may "more closely scrutinize the substantive unconscionability of terms appearing only in the [AAA] rules"; however, incorporation alone does not amount to oppression. Poublon v. C.H. Robinson Co. ,
In the case at bar, Plaintiff does not contend that any aspect of the AAA rules surprised her, nor does she challenge any AAA rule. Moreover, the AAA rules referenced in the arbitration agreement are readily available to the public. Ulbrich ,
b. Contract of Adhesion
Plaintiff challenges the arbitration agreement as unconscionable as it was a contract of adhesion. Opp. at 22-24. Here, the contract does appear to be "a standardized contract that is imposed and drafted by the party of superior bargaining strength and relegates to the other party only the opportunity to adhere to the contract or reject it." Dalton. , No. 16-CV-03409-EMC,
In this case, there was no right to opt out of arbitration. Docket No. 18-2 ("Turng Decl.") at 2. In Plaintiff's declaration she indicated that she was not given an "opportunity to negotiate any of the terms in the Compensation Agreement" and she was instructed by a person in the Human Resources department at GRI "to immediately sign the documents" if she hoped to be employed by GRI or she "would forego [the] employment opportunity."
Defendant does not dispute that the agreement was a contract of adhesion. Instead, it argues that Plaintiff has not shown that she did not have meaningful alternatives for employment. It cites Dean Witter Reynolds v. Superior Court for the proposition that Plaintiff must show a lack of meaningful alternatives in order to establish procedural unconscionability.
Under California law, access to employment is treated differently. In Armendariz v. Found. Health Psychcare Servs., Inc .,
Defendant contends that "[u]nder Concepcion , Iskanian , and Sonic II , the unconscionability doctrine established in Armendariz ,
It is true that Armendariz found that "[g]iven the lack of choice and the potential disadvantages that even a fair arbitration system can harbor for employees, we *626must be particularly attuned to claims that employers with superior bargaining power have imposed one-sided, substantively unconscionable terms as part of an arbitration agreement." Armendariz ,
Employment cases cited by Defendant do not hold to the contrary. The courts in those cases found some, albeit a very low amount of, procedural unconscionability. See Serpa v. California Sur. Investigations, Inc. ,
Although there is some procedural unconscionability here, "[w]here there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high." Ajamian v. CantorCO2e, L.P. ,
2. Substantive Unconscionability
Substantive unconscionability exists where the contract is overly harsh or is unduly one-sided results. Moreno ,
a. Mutuality
The California Supreme Court found in Armendariz that given the basic and substantial nature of the rights at issue in requiring arbitration, the unilateral obligation to arbitrate may be so unfairly one-sided as to warrant a finding of substantive unconscionability. Armendariz , Inc.,
As the Ninth Circuit noted in Tompkins v. 23andMe ,
On the other hand, one-sided rights substantially benefitting one party over the other has been held in some circumstances to be unconscionable. For instance, in Farrar the court found unconscionable the agreement contained a "wholesale exception" to arbitration which exempted "any claim based on or related to the and Assignment of Inventions & Confidentiality Agreement between you and Direct Commerce," Farrar v. Direct Commerce, Inc. ,
In the case at bar, exemptions from arbitration are provided in section (c) Part VII of the Agreement:
The mandatory arbitration provisions of this agreement do not apply to: (i) any claim by you for workers compensation benefits or unemployment compensation benefits; (ii) any claim for injunctive or equitable relief, including without limitation claims related to unauthorized disclosure of confidential information, trade secrets or intellectual property; or (iii) any action brought relating to or arising out of any non-solicitation violations .
Id. at 14 (emphasis added).
As in Farrar , Part VII(c) carves out a wholesale exemption of claims for injunctive or equitable relief (beyond provisional relief) likely to benefit employers (who may seek, e.g. , to enforce confidentiality requirements set forth in Section V of the agreement) more than employees. The one-sided nature is heightened by Section VII(c)(iii) which allows employers to sue in court for damages as well as injunctive relief for non-solicitation violations - obligations imposed only on employees and not the company. The holding in Farrar that such one-sided "wholesale exceptions" are unconscionable is consistent with prior case law which scrutinize the practical impact of such provisions.
In Fitz v. NCR Corp. ,
Defendant attempts to provide a "business reality" justification for the carve outs. It contends that "GRI has legitimate interests in protecting its intellectual property, trade secrets, and other confidential elements of their business." Reply at 8 n.4. But Defendant fails sufficiently to articulate a business reality justification. The arbitration agreement in a conclusory manner identifies a purported justification for breach of the non-solicitation clause stating that a breach will cause immediate irreparable injury. No other explanation is provided. And the agreement does not identify a business justification for injunctive relief not involving solicitation. Nor has Defendant factually established any such broader justification.
Accordingly, the non-mutuality of Part VII(c)(ii) and (iii) are substantively unconscionable.
b. Fee Shifting Provision
Plaintiff challenges as unconscionable a fee shifting provision because it subverts language in the Labor Code related to a requirement that an employer show bad faith on the part of a plaintiff to receive attorneys' fees. Defendant argues that the fee shifting provision does not even apply. The provision reads:
The Company may recover from you its attorneys' fees and costs relating to any action to enforce, defend, and/or prosecute this Agreement. You acknowledge that a breach of any provision of this Agreement will cause irreparable harm to the Company and that monetary damages will be inadequate and may be difficult or impossible to ascertain. Therefore, in the event of any such breach, or threatened breach, in addition to all other remedies, the Company shall have the right to require you to fulfill your obligations by way of temporary and/or permanent injunctive relief.
Plaintiff's Exhibit 1 at 14. Defendant contends that the claims raised here arise under the Labor Code and are not claims to "enforce, defend, and/or prosecute" the Agreement. In the hearing held on October *63026, 2018, Defendant conceded that it would not be able to seek attorneys' fees in the present dispute.
It is true that Plaintiff does not claim breach of contract; rather Plaintiff's claims arise from the Labor Code. While an argument could be made that the present dispute (at least the motion at bar) involves "enforcing" the arbitration agreement, no party has so contended, and the Court must interpret the ambiguous language above in a manner that renders the contract lawful and enforceable. Ajamian ,
A reasonable interpretation of the language above is that the fee shifting provision does not apply to this matter as the cause of action arises under the Labor Code not a dispute over the contract itself. Therefore, Defendant's concession that it cannot seek fees herein is consistent with the Agreement and the Agreement will be so interpreted. The provision is not unconscionable.
c. Choice of Law
Plaintiff challenges the choice of law provision in the arbitration agreement as, not only inapplicable in this matter, but also as unconscionable. Opp. at 17-20. The provision states that "[s]uch arbitration shall take place in Chicago, Illinois, the applicable law will be the laws of the State of Illinois without regard to the conflicts of law provisions therein and the decision of the arbitrator shall be final and binding on you and the Company." Plaintiff's Exhibit 1 at 14.
Despite Defendant's failure to argue that Illinois law applies, the Court must still evaluate whether the choice of law provision would be substantively unconscionable at the time it went into effect. "[U]nconscionability is evaluated at the time the contract went into effect and not how it may be applied in the future." Loewen v. Lyft, Inc. ,
Defendant cites to Washington Mut. Bank, FA v. Superior Court ,
In Pinela v. Neiman Marcus Group, Inc. , the California Court of Appeal found that it was substantively unconscionable to have a Texas choice of law provision because under Texas law a plaintiff could not bring a private right of enforcement under Labor Code provisions at issue. Pinela v. Neiman Marcus Group, Inc. ,
Defendant argues that Pinela was wrongly decided because courts cannot rely on the uniqueness of arbitration when invalidating a contract. However, the problem with the choice of law provision is not peculiar to arbitration. It is problematic even if applied to a lawsuit in court. Pinela continues to be good law and applies. The choice of law provision has a high degree of substantive unconscionability.
d. Requirement to Arbitrate in Illinois
Plaintiff challenges the requirement to arbitrate in Chicago, Illinois. "[T]he California Supreme Court has stated that California courts must enforce a forum selection clause unless the clause is unreasonable because 'the forum selected would be unavailable or unable to accomplish substantial justice'; inconvenience and expense of the forum alone is not sufficient." Poublon ,
e. Conclusion
As explained above, Plaintiff has established a modest degree of procedural unconscionability. Plaintiff has established a high degree of substantive unconscionability as it relates to the choice of law provision and the lack of mutuality pertaining to exceptions from arbitration.
F. Severability
The agreement at issue here has a severability clause. The arbitration agreement reads:
To the extent a court of competent jurisdiction determines any provision is not enforceable, the parties agree that the court may modify the provision to the minimum extent necessary to make the provision enforceable. Further, any such invalid provision shall not invalidate the remaining provisions, which shall remain in full force and effect.
Docket No. 18-2 at 15. "It is the law that where no strong objections of public policy are present, a party to an illegal contract may be permitted to enforce *632it." Nevcal Enterprises, Inc. v. Cal-Neva Lodge, Inc. ,
Here, there are no strong public policy reasons barring the enforcement of the severability clause in the instant case. Indeed, its enforcement comports with common law principles governing severance.
"[A] court should sever an unconscionable provision unless the agreement is so 'permeated' by unconscionability that it cannot be cured by severance." Serafin , LLC ,
In contrast, "[w]here parts of an arbitration provision are unconscionable, the arbitration provision can be saved when the unconscionable portion 'represent[s] only a part of [the] agreement and can be severed without disturbing the primary intent of the parties to arbitrate their disputes.' " Openshaw v. FedEx Ground Package Sys. , Inc.,
In this case, the exceptions for the injunctive relief and GRI's ability to seek judicial remedies for violations of the non-solicitation clause do not "permeate[ ] the arbitration agreements to such an extent that the purpose of the agreements-i.e., *633to arbitrate rather than litigate-was transformed-i.e., to impose arbitration 'not simply as an alternative to litigation, but as an inferior forum.' " Burgoon ,
Hence, the choice of law provision and the two exceptions to arbitration for injunctive relief and enforcement of the non-solicitation clause may be severed from the agreement.
IV. CONCLUSION
For the reasons stated herein, Defendant's motion to compel arbitration is GRANTED . The choice of law provision and Sections VII(c)(ii) and (iii) are unconscionable and are severed from the agreement.
This order disposes of Docket No. 17.
IT IS SO ORDERED.
Plaintiff's unopposed request for judicial notice of the LinkedIn profile of Nikolaos Anthansiou is granted. Docket No. 18-1 at 1-2. See McBain v. Behr Paint Corp. , No. 16-CV-07036-MEJ,
The Court grants the unopposed request for judicial notice of the Tadena state court transcript. Docket No. 36. See King v. Safeway, Inc. , No. C-08-0999 MMC,
As to Plaintiff's argument, she asserts that Defendant claimed in Tadena that injunctive relief is not carved out as an exception because the agreement also states that any claims legal and equitable must be arbitrated. Regardless of Defendant's arguments in another matter, the principle that the specific (here the exceptions to arbitration), governs the general (the initial provision stating that all claims legal and equitable must be arbitrated) is still applicable. Morales v. Trans World Airlines, Inc. ,