I. Background

A. Factual Background

*1 De'Jah Smith (“Plaintiff”) sues Patina Restaurant Group, LLC (“Defendant”), and Does 1-100 for: (1) violation of California Labor Code § 1102.5(a),(b); (2) wrongful termination in violation of public policy; (3) intentional infliction of emotional distress; and (4) violation of California Labor Code §§ 226.7, 226(a), 226(e), 201-203, and 1102.5(a),(b). See generally Complaint, Docket No.1-1. Plaintiff alleges the following relevant facts:

Plaintiff began working for Defendant on or about September 4, 2018, as a supervisor. See id. ¶ 5. While working for Defendant, Plaintiff was earning approximately $15.50 per hour. See id. Plaintiff's primary job responsibilities involved coordinating daily restaurant management operations and ensuring compliance with sanitation and food safety regulations. See id. While working for Defendant, Plaintiff noticed numerous instances of Defendant violating State and Federal food safety laws and sanitation standards such as: (1) improper sanitation of food containers; (2) improper hand washing by staff members; and (3) improper food safety practices resulting in cross-contamination. See id. ¶ 7. Defendant was also contaminating the food it was serving to customers by allowing employees to touch the food while not wearing gloves. See id. ¶ 8. Plaintiff immediately informed the Direct Manager, Ana Maxon, of the food safety violations. See id. After Plaintiff complained, she continued to witness the same food safety violations. See id. On or about October 5, 2018, Plaintiff once again complained about the violations to the Director of Operations, Lynn Hong, Direct Manager, Ana Maxon, and the Corporate Kitchen Manager, Rai (last name unknown). See id. ¶ 10. On or about October 10, 2018, Plaintiff returned to work but was escorted out by security guards. See id. ¶ 11.

Furthermore, while working for Defendant, Plaintiff and other California employees were routinely unable and not authorized to take ten-minute rest breaks. See id. ¶ 13. On more than one occasion they were instructed to continue working through their rest breaks to finish their assigned work and assist Defendant's clients. See id.

B. Procedural Background

On January 4, 2019, Plaintiff sent a letter, by certified mail, return receipt requested, to the Labor and Workforce Development Agency and Defendant, setting forth the facts and theories of the violations alleged against Defendant, as required by Labor Code §§ 2698, 2699 et seq. See id. ¶ 15; id., Ex. A.

Plaintiff filed her complaint in this matter in state court on April 15, 2019. Defendant's registered agent was served on April 23, 2019. See Notice of Removal (“NoR”), ¶ 2. Defendant removed the case to federal court on May 22, 2019. See generally id.

Before the Court is Defendant's motion to compel the arbitration of Plaintiff's claims. See Motion to Compel Arbitration and Stay Case of Defendant Patina Restaurant Group, LLC (“MTC”), Docket No. 14. Plaintiff filed an opposition to the MTC. See Plaintiff De'Jah Smith's Memorandum of Points and Authorities in Support of her Opposition to Defendant Patina Group, LLC's Motion to Compel Arbitration and Stay Case (“Opp'n”), Docket No. 17. Defendant filed a reply in support of the MTC. See Reply in Support of Defendant Patina Restaurant Group's Motion to Compel Arbitration and Stay Case (“Reply”), Docket No. 18.

*2 The Court held a hearing on the MTC on August 5, 2019. See Docket No. 19. The parties filed a joint statement related to Plaintiff's Private Attorneys General Act (“PAGA”) Claim on August 7, 2019. See Joint Statement Regarding Plaintiff's Private Attorneys General Act Claim (“Joint Statement”), Docket No. 20. Plaintiff filed a supplemental brief. See Plaintiff De'Jah Smith's Supplemental Briefing in Support of her Opposition to Defendant Patina Group, LLC's Motion to Compel Arbitration and Stay Case (“Pl. Supp.”), Docket No. 21. Defendant also filed a supplemental brief. See Docket No. 23.

II. Legal Standard

The Federal Arbitration Act (“FAA”) reflects a “liberal federal policy favoring arbitration.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2010) (citation omitted). A party aggrieved by the refusal of another party to arbitrate under a written arbitration agreement may petition the court for an order compelling arbitration as provided for in the parties' agreement. See 9 U.S.C. § 4. “By its terms, the [FAA] leaves no room for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 213 (1985) (emphasis in original); see also 9 U.S.C. § 4. “The court's role under the Act is therefore limited to determining: (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. If the response is affirmative on both counts, then the Act requires the court to enforce the arbitration agreement in accordance with its terms.” Daugherty v. Experian Info. Solutions, Inc., 847 F. Supp. 2d 1189, 1193 (N.D. Cal. 2012) (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)). “While the Court may not review the merits of the underlying case ‘[i]n deciding a motion to compel arbitration, [it] may consider the pleadings, documents of uncontested validity, and affidavits submitted by either party.’ ” Macias v. Excel Bldg. Servs. LLC, 767 F. Supp. 2d 1002, 1007 (N.D. Cal. 2011) (quoting Ostroff v. Alterra Healthcare Corp., 433 F. Supp. 2d 538, 540 (E.D. Pa. 2006)).

On a motion to compel arbitration, courts apply a standard similar to the summary judgment standard applied under Rule 56 of the Federal Rules of Civil Procedure (“Rule 56”). Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004) (citing McCarthy v. Providential Corp., No. C 94-0627, 1994 WL 387852, at *2 (N.D. Cal. July 19, 1994)). Under Rule 56, “[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.” Fed. R. Civ. P. 56(c)(2). “[T]o survive summary judgment, a party does not necessarily have to produce evidence in a form that would be admissible at trial, as long as the party satisfies the requirements of Federal Rules of Civil Procedure 56.” Fraser v. Goodale, 342 F.3d 1032, 1036–37 (9th Cir. 2003) (quoting Block v. City of Los Angeles, 253 F.3d 410, 418–19 (9th Cir. 2001)) (internal quotation marks omitted).

Similarly, at the summary judgment stage courts do not “focus on the admissibility of the evidence's form,” but rather “on the admissibility of its contents.” Fraser, 342 F.3d at 1036. Objections on the basis of a failure to comply with the technicalities of authentication requirements or the best evidence rule are, therefore, inappropriate. See Adams v. Kraft, No. 5:10-CV-00602-LHK, 2011 WL 5079528, at *25 n. 5 (N.D. Cal. Oct. 25, 2011) (“On summary judgment, unauthenticated documents may be considered where it is apparent that they are capable of being reduced to admissible evidence at trial.”); Hughes v. United States, 953 F.2d 531, 543 (9th Cir. 1992) (holding that even if declaration violated best evidence rule, court was not precluded from considering declaration in awarding summary judgment).

III. Analysis

*3 Plaintiff argues that the arbitration agreement should not be enforced because: (1) Defendant has failed to meet its burden of proving a valid agreement to arbitrate; (2) the arbitration agreement contains an unenforceable PAGA claim waiver; and (3) the arbitration agreement is both procedurally and substantively unconscionable. See generally Opp'n. Plaintiff also asserts that even if arbitration of Plaintiff's individual claims are sent to arbitration, her PAGA action should not be stayed. See id. at 16.

A. Defendant Provided Sufficient Evidence to Authenticate Plaintiff's Signature on the Arbitration Agreement

Plaintiff argues that Defendant has “failed to carry its burden of proof in proving that Plaintiff signed the arbitration agreement because Defendant has failed to explain how it ascertained that the electronic signature on the proffered arbitration agreement was ‘the act of’ Plaintiff. See MTC at 8.

To satisfy the requirement of authentication, the proponent must produce evidence “sufficient to support a finding that the item is what the proponent claims it is.” Fed. R. Evid. 901(a). The Court may consider “the appearance, contents, substance, internal patterns, or other distinctive characteristics of the item, taken together with all the circumstances.” Fed. R. Evid. 901(b)(4). Furthermore, in California, the Uniform Electronic Transaction Act provides that a “signature may not be denied legal effect or enforceability solely because it is in electronic form[,]” or “because an electronic record was used in its formation.” Cal. Civ. Code § 1633.7(a).

Here, Defendant provided the declaration of the company's human resources compliance manager Melissa Runfola (“Runfola Decl.”) to authenticate the arbitration agreement and Plaintiff's electronic signature on the agreement. Runfola declared that Defendant's secure internet portal, hosted by third party vendor Equifax, requires each new employee to “create a new an unique personal identification number” (“pin number”) that “only the employee has access to.” Runfola Decl. ¶ 5. The declaration explains that new employees are required to use this unique login to sign in to the Portal to review and sign all onboarding documents, including the arbitration agreement, prior to beginning their employment. See id. ¶ 7. Data does not transfer from the onboarding system to the payroll system until all onboarding documents are completed and signed. See id. Runfola declared that in order to electronically sign the arbitration agreement, Plaintiff was required to log on to the portal using her username and unique pin number. See id. ¶ 8. The declaration further explained that in order for Plaintiff to complete the arbitration provision paperwork, she was required to type in her full name or initials and attest that she has “read and understand[s] the above information,” which included a link to the Patina Dispute resolution policy containing the arbitration agreement. See id. Runfola declared that Patina's business records reflect that Plaintiff electronically signed the arbitration agreement on September 5, 2018, and that the only way for Patina's records to reflect that Plaintiff signed the arbitration agreement on that date would be if she had logged onto the portal using her username and pin number, and accurately entered her name or initials. See Declaration of Melissa Runfola, MTC, Ex. 2, Docket No. 14-3.

Plaintiff claims that she does not remember ever signing the arbitration agreement and was not aware of an arbitration agreement during her employment. See Declaration of De'Jah Smith (“Smith Decl.”), Opp'n, Ex. 1, Docket No. 17-1. However, Plaintiff provides no alternative explanation to explain how the arbitration agreement that was part of her onboarding materials received an electronic signature.

*4 The Court finds that the declaration of Melissa Runfola is sufficient to authenticate the arbitration agreement. See Trevino v. Acosta, Inc., Case No. 17-c-06529-NC, 2018 WL 3537885, *6 (N.D. Cal. July 23, 2018) (holding that the declaration of a human resource employee was sufficient to authenticate an electronic signature on an arbitration agreement); Tagliabue v. J.C. Penney Corp. Inc., Case No. 1:15-cv-01443-SAB, 2015 WL 8780577, *3 (E.D. Cal. Dec. 15, 2015) (holding that declaration of senior human resources manager stating that Plaintiff signed the document and detailing the steps of the onboarding process was sufficient to establish that Plaintiff electronically signed the arbitration agreement).

Plaintiff relies on Ruiz v. Moss Bros. Auto Grp., Inc., 232 Cal.App. 4th 836 (2014), to argue that Defendant has not submitted sufficient evidence to authenticate his signature. In Ruiz, however, the declaration submitted with the papers did not explain how the declarant came to the conclusion that the plaintiff had signed the document. 232 Cal. App. 4th at 843. Here, Runfola described in detail the steps of the onboarding process, clarifying that the process could not have been completed by anyone who did not possess Plaintiff's private user id and pin number, and that Plaintiff could not have completed the onboarding process without signing the arbitration agreement. Therefore, this case is distinguishable from Ruiz. Thus the Court is not persuaded by Plaintiff's argument that the arbitration agreement has not been authenticated.

B. The arbitration agreement is not procedurally or substantively unconscionable

Plaintiff argues that the arbitration agreement should not be enforced because it is both procedurally and substantively unconscionable. See Opp'n at 12-18. Specifically, Plaintiff argues that the arbitration agreement is not enforceable because: (1) it was presented to Plaintiff on a “take it or leave it” basis; (2) the governing rules were not attached to the proffered arbitration agreement; (3) the agreement fails to safeguard Plaintiff's statutory rights; and (4) the terms of the agreement were not clear where Plaintiff signed the agreement.

Under California law, a court may find a contract unenforceable or limit a clause of the contract if it is found to be unconscionable at the time it was made. Cal. Civ. Code § 1670.5(a). “A contract or provision, even if consistent with the reasonable expectations of the parties will be denied enforcement if, considered in its context, it is unduly oppressive or unconscionable.” Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 113 (2000). A finding of unconscionability requires both a procedural and substantive component, though they “need not be in the same degree.” Id. at 114.

a) “Take It or Leave It” nature of agreement

Plaintiff argues that the arbitration agreement cannot be enforced because it was provided to her on a take-it-or-leave-it basis, and she was not given the opportunity to negotiate. See id. at 12-13. The Ninth Circuit has held that, when parties do not have equal bargaining power and the terms of a contract are presented as non-negotiable, the procedural element of unconscionability is established. Ferguson v. Countrywide Credit Indus., 298 F.3d 778, 784 (9th Cir. 2002). See also Chavarria v. Ralphs Grocery Co., 733 F.3d 916, 923 (9th Cir. 2013); (finding procedural unconscionability where an employee is presented with a contract drafted by an employer as a condition of employment and on a take-it-or-leave-it basis); Tagliabue, 2015 WL 8780577, at *5 (same); Trevino, 2018 WL 3537885, at *9 (same). Defendant does not deny that signing the arbitration agreement was a non-negotiable term of employment. See generally Reply. Therefore, the Court would find that the take-it-or-leave-it nature of the agreement establishes “some degree” of procedural unconscionability.

b) Attachment of governing rules to the arbitration agreement

*5 “Failure to provide the applicable arbitration rules is [a] factor that supports procedural unconscionability.” Carmona v. Lincoln Millennium Car Wash, Inc., 226 Cal. App. 4th 74, 84– 85 (2014). This failure indicates procedural unconscionability because the employee must make an effort to look to another source to “find out the full import of what he or she is about to sign.” Id. However, several courts that have held agreements that incorporated commonly used arbitration rules by reference are not procedurally unconscionable. See Greer v. Sterling Jewelers, Inc., No. 18-cv-480 LJO, 2018 WL 3388086, at *4 (E.D. Cal. July 10, 2018) (finding arbitration agreement not procedurally unconscionable because the agreement directed plaintiff to review the National Arbitration and Mediation rules online); Fitz v. NCR Corp., 118 Cal. App. 4th 702, 718 (2004) (finding incorporation of AAA rules by reference is sufficient); see also Carbajal v. Rentokil N. Am., Inc., No. 17-cv-06651 YGR, 2018 WL 3304635, at *5 (N.D. Cal. July 5, 2018) (explaining that failure to attach AAA rules does not establish procedural unconscionability under California Law) (citing Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1246 (2016) ).

In Trevino, a district court in the Northern District of California held that an arbitration provision which hyperlinked to an online version of the governing rules and provided that the rules would be presented to anyone who requested them did not constitute procedural unconscionability. Trevino, 2018 WL 3537885, at *8. Here the agreement provided many of the substantive governing provisions of the JAMS rules, provided a URL to the JAMS rules in the arbitration agreement, and stated that employees could request a copy of the JAMS rules in writing from human resources. See Dispute Resolution Agreement, Declaration of Fontaine Yuk, MTC, Ex. 1, Docket No. 14-2, CM/ECF p. 10. The Court would find that Plaintiff had the opportunity to review the governing rules for arbitration, and therefore the failure to include all of the rules attached to the arbitration agreement is not an indicator of procedural unconscionability.

c) Failure to safeguard plaintiff's statutory rights

Plaintiff argues that the arbitration agreement failed to safeguard Plaintiff's statutory rights because it provides that “the arbitrator may award any remedy or relief as a court could award on the same claim.” See Opp'n at 16. Plaintiff argues that the provision should have stated that the arbitrator “shall” award the same remedies. Plaintiff asserts that as written, the arbitrator has the discretion not to award Plaintiff attorney's fees if she prevails and that there is no requirement to award Plaintiff damages even if the evidence supports it. The Court would not agree with Plaintiff's interpretation. Rather, the Court would read the statement at issue to indicate that the same remedies and relief available in court are available in arbitration. Therefore, this provision of the agreement does not indicate unconscionability of any kind.

d) The arbitration agreement should not have come as a surprise to Plaintiff

Plaintiff argues that the arbitration agreement is substantively unconscionable because it was not signed on the Dispute Resolution page, but instead on a separate page with a link to the arbitration agreement. The Court is not convinced by this argument. The signature page clearly states that it was a signature agreeing to the “Patina Dispute Resolution” document, which was the only document clearly linked above the signature line. See Runfola Decl., Ex. A. Therefore, there should not have been any confusion as to what Plaintiff was providing a signature for. Thus, Plaintiff's attempt to argue that the arbitration agreement was a surprise is not persuasive.

e) Discovery available under the agreement

*6 Plaintiff argues that the “absence of the express provision for discovery rights renders the arbitration agreement[ ]” substantively unconscionable. However the agreement expressly states that “both [employee] and the Company shall be entitled to adequate discovery prior to arbitration.” There is clearly an express provision of discovery rights under the agreement. Therefore, Plaintiff's argument is unpersuasive.

Although Plaintiff established “some degree” of procedural unconscionability, she did not establish that the agreement had any indicators of substantive unconscionability. Therefore, the Court would not find the arbitration agreement unenforceable on the basis of unconscionability.

C. The PAGA claim waiver should be severed from the arbitration agreement

Plaintiff claims that the arbitration agreement cannot be enforced because it contains an unenforceable PAGA claim waiver. In Iskanian, the California Supreme Court found that “an employee's right to bring a PAGA action is unwaivable.” Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348, 383 (2014). Therefore, an “employment agreement [that] compels the waiver of representative claims under the PAGA...is contrary to public policy and unenforceable as a matter of state law.” Id. at 384. The Iskanian court further held that California's public policy prohibiting waiver of PAGA claims does not interfere with the FAA's goal of promoting arbitration as a forum for alternative dispute resolution and therefore the FAA did not preempt PAGA. Id. at 389.

In Sakkab v. Luxottica Retail North America, Inc., 803 F.3d 425 (9th Cir. 2015), a divided panel of the Ninth Circuit confirmed the ruling in Iskanian, finding that California's public policy prohibiting waiver of PAGA claims “does not stand as an obstacle to the accomplishment of the FAA's objectives and is not preempted.” 803 F.3d at 427. Therefore, the waiver of representative PAGA claims in the arbitration agreement is not valid.

Plaintiff argues that the invalidity of the PAGA provision renders the entire arbitration agreement unenforceable. Plaintiff claims that in order to sever the provision from the agreement “the Court would need to re-write the agreement by requiring that California law govern the dispute at hand, setting forth discovery guidelines, striking the illegal prohibition on pursuing actions on a representative basis, adding specific rules that governed the arbitration proceedings, and numerous other issues.” See Opp'n at 18-19. The Court would disagree.

The arbitration agreement specifically permits modification such “that the unenforceable term or section is enforceable to the greatest extent possible.” See Dispute Resolution Agreement at CM/ECF 7. Furthermore, the PAGA waiver includes text clarifying that the PAGA waiver will apply, “Except as otherwise required under applicable law.” Id. Finally, the agreement states “[i]f any parts of this agreement are found to be invalid, illegal, or unenforceable, the validity, legality and/or enforceability of the remaining provisions will not be affected or impaired by that determination.” Id. Therefore, plainly on the face of the agreement the PAGA waiver is severable. See Mohamed v. Uber Techs. Inc., 848 F.3d 1201, 1214 (9th Cir. 2016) (finding that the terms of the settlement permitted severance of an unenforceable PAGA waiver in an arbitration agreement).

The Court is also not convinced that it would be required to do any more than sever the one unenforceable provision from the agreement in order to remedy the agreement. Plaintiff's argument that the Court would have to fundamentally rewrite the agreement is unpersuasive. Thus, the Court would find that the agreement is enforceable except as applied to Plaintiff's PAGA claims.

D. Plaintiff's PAGA action can proceed without a stay

*7 Plaintiff has agreed to dismiss, with prejudice, her PAGA claim for retaliation in violation of Cal. Labor Code § 1102.5(a)(b). See Joint Statement at 3. In exchange, Defendant consented to allowing the remainder of Plaintiff's PAGA claims to proceed without a stay. See id. Thus, the Court will dismiss Plaintiff's PAGA claim under Cal. Labor Code § 1102.5(a)(b) with prejudice and will permit the remaining PAGA claims to proceed without a stay.

IV. Conclusion

For the foregoing reasons, the Court would GRANT the MTC and compel Plaintiff to arbitrate her individual claims, but will permit Plaintiff's remaining PAGA claims to proceed without a stay.