Title: Baltazar v. Forever 21, Inc.

State: california

Issuer: California Supreme Court

Document:

1 
Filed 3/28/16 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
MARIBEL BALTAZAR, 
) 
 
 
) 
 
Plaintiff and Respondent, 
) 
 
 
) 
S208345 
 
v. 
) 
 
 
) 
Ct.App. 2/1 B237173 
FOREVER 21, INC., et al., 
) 
 
) 
Los Angeles County 
 
Defendants and Appellants. 
) 
Super. Ct. No. VC059254 
 
____________________________________) 
 
In this case, we are once again asked to determine the enforceability of an 
arbitration agreement under the law of unconscionability.  As a condition of her 
employment with defendants, plaintiff Maribel Baltazar signed an agreement to 
resolve any employment-related disputes by means of arbitration.  The agreement 
provides that, in the event a claim proceeds to arbitration, the parties are 
authorized to seek preliminary injunctive relief in the superior court.  The primary 
question before us is whether this clause renders the arbitration agreement 
unconscionable, and therefore unenforceable, because it unreasonably favors the 
employer.  We conclude that the clause, which does no more than restate existing 
law (see Code Civ. Proc., § 1281.8, subd. (b) (section 1281.8(b))), does not render 
the agreement unconscionable.  Finding no other basis to support Baltazar‘s claim 
of unconscionability, we affirm the judgment of the Court of Appeal. 
 
2 
I. 
In November 2007, Baltazar was invited to a job interview at a Los Angeles 
warehouse operated by Forever 21, a clothing retail merchandiser.  When she 
arrived for the interview, she was asked to fill out an 11-page employment 
application.  Pages 8 and 9 of the application consisted of an arbitration 
agreement.  Several blank spaces on the application were highlighted in yellow, 
indicating places where Baltazar should sign.  Although Baltazar signed all other 
portions of the application, she initially refused to sign the arbitration agreement.  
A Forever 21 employee told Baltazar, ―[S]ign it or no job.‖  Baltazar then signed 
the arbitration agreement and was hired. 
The agreement provides that the parties ―mutually agree‖ to arbitrate ―any 
claim or action arising out of or in any way related to the hire, employment, 
remuneration, separation or termination of Employee.‖  The agreement specifies 
that the disputes subject to arbitration ―include but are not limited to:  claims for 
wages or other compensation due; claims for breach of any employment contract 
or covenant (express or implied); claims for unlawful discrimination, retaliation or 
harassment . . . , and Disputes arising out of or relating to the termination of the 
employment relationship between the parties, whether based on common law or 
statute, regulation, or ordinance.‖  (Original italics.)  In the event the parties 
proceed to arbitration, the agreement provides that either party may seek 
provisional relief:  ―Pursuant to California Code of Civil Procedure [section] 
1281.8 either party hereto may apply to a California court for any provisional 
remedy, including a temporary restraining order or preliminary injunction.‖  The 
agreement also contains a confidentiality provision:  ―Both parties agree that the 
Company has valuable trade secrets and proprietary and confidential information.  
Both parties agree that in the course of any arbitration proceeding all necessary 
steps will be taken to protect from public disclosure such trade secrets and 
 
3 
proprietary and confidential information.‖  And finally, as relevant here, the 
agreement provides that if a court determines that ―the parties[‘] agreement to 
arbitrate under the Model Rules for Arbitration of Employment Disputes of the 
American Arbitration Association is not enforceable,‖ then the parties will 
arbitrate the dispute under the California Arbitration Act (CAA) (Code Civ. Proc., 
§ 1280 et seq.). 
Baltazar resigned from Forever 21 in January 2011.  Later that year, she 
filed a complaint against defendants in the superior court.  Her complaint alleges 
that during the course of her employment at Forever 21, she suffered verbal and 
physical harassment, race and sex discrimination, and retaliation, all in violation of 
California law.1  Defendants filed a motion to compel arbitration under the terms 
of the agreement that Baltazar had signed.  Baltazar opposed the motion, arguing 
that the arbitration agreement was unconscionable and therefore unenforceable.  
Agreeing with Baltazar, the trial court denied the motion to compel arbitration.  
The trial court found that the agreement was procedurally unconscionable because 
                                              
1 
The complaint contains a total of nine causes of action, six of which arise 
under the California Fair Employment and Housing Act (Gov. Code, § 12900 et 
seq.):  (1) hostile work environment based on racial harassment (Gov. Code, 
§ 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)); (6) retaliation (id., subd. (h)); (7) violations of Civil 
Code sections 51.7 and 52, which govern hate violence and threats of hate 
violence; (8) constructive discharge in violation of public policy; and 
(9) intentional infliction of emotional distress. 
 
Civil Code section 51.7 was amended in 2014 to provide that any contract 
for goods or services entered into after January 1, 2015, that requires arbitration of 
an alleged violation of the section as a condition of entering into the contract is, to 
that extent, unconscionable.  (See Civ. Code, § 51.7, subd. (b)(4) & (8).)  The 
amendment‘s relevance, if any, to this case is not before us, and we express no 
view on the matter. 
 
4 
of the parties‘ unequal bargaining power.  It explained that Forever 21 had 
required Baltazar to sign the agreement, without modification, as a condition of 
receiving employment.  The trial court also found that the agreement was 
substantively unconscionable because (1) it lists only employee claims as 
illustrative examples of the types of disputes to which it applies, (2) it gives 
Forever 21 the right to protect trade secrets and other confidential information, and 
(3) it still requires arbitration even if a court finds the agreement to be 
unenforceable insofar as it requires arbitration under the model rules of the 
American Arbitration Association (AAA). 
The Court of Appeal reversed.  It agreed with the trial court‘s conclusion 
that the agreement was ―oppressive and procedurally unconscionable‖ because 
Baltazar ―was required to sign the Agreement as a condition of employment, was 
unable to negotiate the terms of the Agreement, and had no meaningful choice in 
the matter.‖  But the Court of Appeal disagreed with the trial court‘s conclusion 
that the agreement was substantively unconscionable.  The court rejected 
Baltazar‘s argument that the clause of the arbitration agreement permitting either 
party to seek provisional relief in superior court was substantively unconscionable 
because such relief more often serves the interests of employers than employees.  
On this point, the Court of Appeal expressly disagreed with Trivedi v. Curexo 
Technology Corp. (2010) 189 Cal.App.4th 387 (Trivedi).  The court similarly 
rejected Baltazar‘s arguments that the agreement‘s list of examples of 
employment-related disputes subject to arbitration and its confidentiality provision 
were unfairly one-sided, rendering the agreement unconscionable.  Finally, the 
court rejected Baltazar‘s argument that the arbitration agreement at issue here was 
unconscionable because it required arbitration even if a court determined the 
agreement to be unenforceable, explaining:  ―The Agreement states that arbitration 
will be conducted pursuant to the rules of the American Arbitration Association 
 
5 
. . . , but if those rules are found unenforceable, the arbitration will proceed under 
the CAA.‖  That provision, the court concluded, ―simply provides an alternative 
means of arbitration if [the AAA] rules are unenforceable for some reason,‖ and 
does not require arbitration in the event a court declares the agreement itself to be 
unenforceable.2  We granted Baltazar‘s petition for review. 
II. 
A. 
As a starting point for our analysis, we review general principles of 
unconscionability.  ― ‗One common formulation of unconscionability is that it 
refers to ― ‗an absence of meaningful choice on the part of one of the parties 
together with contract terms which are unreasonably favorable to the other 
party.‘ ‖  [Citation.]  As that formulation implicitly recognizes, the doctrine of 
unconscionability has both a procedural and a substantive element, the former 
focusing on oppression or surprise due to unequal bargaining power, the latter on 
overly harsh or one-sided results.‘ ‖  (Sonic-Calabasas A, Inc. v. Moreno (2013) 
57 Cal.4th 1109, 1133 (Sonic II).) 
― ‗The prevailing view is that [procedural and substantive 
unconscionability] must both be present in order for a court to exercise its 
discretion to refuse to enforce a contract or clause under the doctrine of 
unconscionability.‘  [Citation.]  But they need not be present in the same degree.  
‗Essentially a sliding scale is invoked which disregards the regularity of the 
procedural process of the contract formation, that creates the terms, in proportion 
to the greater harshness or unreasonableness of the substantive terms themselves.‘  
                                              
2  
In her merits briefing, Baltazar seeks to challenge the Court of Appeal‘s 
treatment of this claim.  The challenge does not, however, fall within the scope of 
the issues on which we granted review, and is therefore not properly before us. 
 
6 
[Citations.]  In other words, the more substantively oppressive the contract term, 
the less evidence of procedural unconscionability is required to come to the 
conclusion that the term is unenforceable, and vice versa.‖  (Armendariz v. 
Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 
(Armendariz).) 
―[A] finding of procedural unconscionability does not mean that a contract 
will not be enforced, but rather that courts will scrutinize the substantive terms of 
the contract to ensure they are not manifestly unfair or one-sided.  [Citation.]  . . .  
[T]here are degrees of procedural unconscionability.  At one end of the spectrum 
are contracts that have been freely negotiated by roughly equal parties, in which 
there is no procedural unconscionability. . . .  Contracts of adhesion that involve 
surprise or other sharp practices lie on the other end of the spectrum.  [Citation.]  
Ordinary contracts of adhesion, although they are indispensable facts of modern 
life that are generally enforced (see Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 
807, 817–818), contain a degree of procedural unconscionability even without any 
notable surprises, and ‗bear within them the clear danger of oppression and 
overreaching.‘  (Id., at p. 818.)‖  (Gentry v. Superior Court (2007) 42 Cal.4th 443, 
469.)  We have instructed that courts must be ―particularly attuned‖ to this danger 
in the employment setting, where ―economic pressure exerted by employers on all 
but the most sought-after employees may be particularly acute.‖  (Armendariz, 
supra, 24 Cal.4th at p. 115.) 
―The unconscionability doctrine ensures that contracts, particularly 
contracts of adhesion, do not impose terms that have been variously described as 
‗ ― ‗overly harsh‘ ‖ ‘ (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 
1532), ‗ ―unduly oppressive‖ ‘ (Perdue v. Crocker National Bank (1985) 38 
Cal.3d 913, 925 . . . ), ‗ ―so one-sided as to ‗shock the conscience‘ ‖ ‘ (Pinnacle 
Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 
 
7 
Cal.4th 223, 246 . . . ), or ‗unfairly one-sided‘ (Little [v. Auto Stiegler, Inc. (2003)] 
29 Cal.4th [1064,] 1071).  All of these formulations point to the central idea that 
the unconscionability doctrine is concerned not with ‗a simple old-fashioned bad 
bargain‘ (Schnuerle v. Insight Communications Co. (Ky. 2012) 376 S.W.3d 561, 
575 . . . ), but with terms that are ‗unreasonably favorable to the more powerful 
party‘ (8 Williston on Contracts (4th ed. 2010) § 18:10, p. 91).  These include 
‗terms that impair the integrity of the bargaining process or otherwise contravene 
the public interest or public policy; terms (usually of an adhesion or boilerplate 
nature) that attempt to alter in an impermissible manner fundamental duties 
otherwise imposed by the law, fine-print terms, or provisions that seek to negate 
the reasonable expectations of the nondrafting party, or unreasonably and 
unexpectedly harsh terms having to do with price or other central aspects of the 
transaction.‘  (Ibid.)‖  (Sonic II, supra, 57 Cal.4th at p. 1145.) 
―We further observed in Sonic II . . . that ‗an examination of the case law 
does not indicate that ―shock the conscience‖ is a different standard in practice 
than other formulations or that it is the one true, authoritative standard for 
substantive unconscionability, exclusive of all others.‘  (Sonic II, supra, 57 Cal.4th 
at p. 1159.)  Nor do we see any conceptual difference among these formulations.  
Rather, ‗courts, including ours, have used various nonexclusive formulations to 
capture the notion that unconscionability requires a substantial degree of 
unfairness beyond ―a simple old-fashioned bad bargain.‖ ‘  (Id. at p. 1160, italics 
added.)  This latter qualification is important.  Commerce depends on the 
enforceability, in most instances, of a duly executed written contract.  A party 
cannot avoid a contractual obligation merely by complaining that the deal, in 
retrospect, was unfair or a bad bargain.  Not all one-sided contract provisions are 
unconscionable; hence the various intensifiers in our formulations:  ‗overly harsh,‘ 
‗unduly oppressive,‘ ‗unreasonably favorable.‘  (See Pinnacle Museum Tower 
 
8 
Assn. v. Pinnacle Market Development (US), LLC, supra, 55 Cal.4th at 
p. 246 . . . .)  . . .  [¶]  . . .  The ultimate issue in every case is whether the terms of 
the contract are sufficiently unfair, in view of all relevant circumstances, that a 
court should withhold enforcement.‖  (Sanchez v. Valencia Holding Co., LLC 
(2015) 61 Cal.4th 899, 911-912.) 
B. 
Here, the trial court concluded that the arbitration agreement was 
procedurally unconscionable because it was written on a preprinted form and 
offered on a take-it-or-leave-it basis, thus making it a contract of adhesion.  The 
Court of Appeal agreed.  The Court of Appeal noted, however, that while the 
contract was adhesive in nature, there was no element of surprise.  Baltazar not 
only knew about the arbitration agreement, but initially sought to avoid it, 
ultimately deciding to accept it because Forever 21 was not willing to offer the job 
on other terms.  Nor was there any oppression or sharp practices on the part of 
Forever 21.  Baltazar was not lied to, placed under duress, or otherwise 
manipulated into signing the arbitration agreement.  The adhesive nature of the 
employment contract requires us to be ―particularly attuned‖ to her claim of 
unconscionability (see Armendariz, supra, 24 Cal.4th at p. 115), but we do not 
subject the contract to the same degree of scrutiny as ―[c]ontracts of adhesion that 
involve surprise or other sharp practices‖ (Gentry v. Superior Court, supra, 42 
Cal.4th at p. 469). 
Baltazar argues that a somewhat greater degree of procedural 
unconscionability is present here — warranting closer scrutiny of the substantive 
fairness of the agreement‘s terms — because Forever 21 did not provide Baltazar 
with a copy of the AAA‘s rules for arbitration of employment disputes, which, by 
the terms of the arbitration agreement, govern any arbitration between the parties.  
Baltazar relies on Trivedi, which notes that ―[n]umerous cases have held that the 
 
9 
failure to provide a copy of the arbitration rules to which the employee would be 
bound supported a finding of procedural unconscionability.‖  (Trivedi, supra, 189 
Cal.App.4th at p. 393, citing cases.)  But in Trivedi itself and in each of the Court 
of Appeal decisions cited therein, the plaintiff‘s unconscionability claim depended 
in some manner on the arbitration rules in question.  (See id. at pp. 395–396; Fitz 
v. NCR Corp. (2004) 118 Cal.App.4th 702, 721 (Fitz); Harper v. Ultimo (2003) 
113 Cal.App.4th 1402, 1406–1407; Gutierrez v. Autowest, Inc. (2003) 114 
Cal.App.4th 77, 89–92; Patterson v. ITT Consumer Financial Corp. (1993) 14 
Cal.App.4th 1659, 1665–1666.)  These cases thus stand for the proposition that 
courts will more closely scrutinize the substantive unconscionability of terms that 
were ―artfully hidden‖ by the simple expedient of incorporating them by reference 
rather than including them in or attaching them to the arbitration agreement.  
(Harper, supra, 113 Cal.App.4th at p. 1406.)  Baltazar‘s argument accordingly 
might have force if her unconscionability challenge concerned some element of 
the AAA rules of which she had been unaware when she signed the arbitration 
agreement.  But her challenge to the enforcement of the agreement has nothing to 
do with the AAA rules; her challenge concerns only matters that were clearly 
delineated in the agreement she signed.  Forever 21‘s failure to attach the AAA 
rules therefore does not affect our consideration of Baltazar‘s claims of 
substantive unconscionability.   
C. 
Baltazar‘s petition for review raises three claims of substantive 
unconscionability.  We address them in turn. 
First, Baltazar argues that the arbitration agreement is substantively 
unconscionable insofar as it allows the parties to seek a temporary restraining 
order or preliminary injunctive relief in the superior court.  Relying on Trivedi, 
supra, 189 Cal.App.4th 387, Baltazar argues that the provisional relief clause 
 
10 
unfairly favors Forever 21 because Forever 21 is more likely than one of its 
employees to seek such relief.  In ruling against Baltazar on this point, the Court 
of Appeal expressly disagreed with Trivedi. 
In Trivedi, supra, 189 Cal.App.4th 387, the Court of Appeal invalidated an 
employment-related arbitration agreement based in part on a provisional relief 
clause much like the one at issue here.  The Trivedi court noted that the clause was 
consistent with a section of the CAA that states in relevant part:  ―A party to an 
arbitration agreement may file in the court in the county in which an arbitration 
proceeding is pending, or if an arbitration proceeding has not commenced, in any 
proper court, an application for a provisional remedy in connection with an 
arbitrable controversy, but only upon the ground that the award to which the 
applicant may be entitled may be rendered ineffectual without provisional relief.‖  
(§ 1281.8(b); see Trivedi, supra, 189 Cal.App.4th at p. 397.)  The court 
nevertheless concluded that in the context of employment arbitration, the 
provisional relief clause tended to favor the employer over the employee because 
employers are, as a practical matter, more likely than employees to ―invoke the 
court‘s equitable jurisdiction in order to stop employee competition or to protect 
intellectual property.‖  (Trivedi, at p. 397.) 
Drawing on this reasoning, Baltazar contends that the arbitration 
agreement‘s express reference to Forever 21‘s interest in protecting trade secrets 
and other confidential information during the pendency of the arbitration tends to 
further reinforce the conclusion that the agreement‘s provisional relief clause 
would, in practice, likely favor Forever 21 rather than its employees. 
Like the Court of Appeal in this case, we find this argument unpersuasive.  
Although Baltazar has supplied us with no empirical data to support her claim, we are 
willing to accept for the sake of argument that employers are, in general, more likely 
than employees to seek provisional relief during the pendency of an arbitration. 
 
11 
Even so, the provisional relief clause does no more than recite the 
procedural protections already secured by section 1281.8(b), which expressly 
permits parties to an arbitration to seek preliminary injunctive relief during the 
pendency of the arbitration.3  Indeed, the wording of the provisional relief clause, 
which explicitly refers to the parties‘ right to seek preliminary injunctive relief 
―[p]ursuant to California Code of Civil Procedure [section] 1281.8,‖ makes clear 
that the clause merely confirms, rather than expands, rights available to the parties 
under that code section.  Baltazar does not contend that section 1281.8 itself 
unfairly advantages one party; her claim, rather, focuses on Forever 21‘s decision 
to make express reference to section 1281.8 in its arbitration agreement.  But an 
arbitration agreement is not substantively unconscionable simply because it 
confirms the parties‘ ability to invoke undisputed statutory rights.  And the clause 
confirming the availability of provisional relief under section 1281.8(b) confers no 
advantage on the drafting party that would otherwise be unavailable in the 
litigation context.  (Cf. Armendariz, supra, 24 Cal.4th at pp. 112-113 [holding that 
under some circumstances, a provision of an arbitration agreement that employers 
and employees share arbitration costs pursuant to Code of Civil Procedure section 
1284.2 is unenforceable].)  Thus, regardless of whether Forever 21 is, practically 
speaking, more likely to seek provisional remedies than its employees, simply 
reciting the parties‘ rights under section 1281.8 does not place Baltazar at an 
                                              
3  
As previously noted, section 1281.8(b) is a provision of the CAA.  The 
parties below disputed whether the Federal Arbitration Act (9 U.S.C. § 1 et seq.) 
governs the arbitration agreement instead of, or in addition to, the CAA.  The 
Court of Appeal concluded that the CAA governs the agreement.  The court‘s 
resolution of that issue was not challenged in the petition for review or in the 
answer to the petition.  We therefore assume, without deciding, that the CAA 
governs the arbitration agreement. 
 
12 
unfair disadvantage.  To the extent Trivedi suggested otherwise (Trivedi v. Curexo 
Technology Corp., supra, 189 Cal.App.4th 387, 397), we disapprove it.4 
Second, Baltazar argues that the arbitration agreement at issue is unfairly 
one-sided because it lists only employee claims as examples of the types of claims 
that are subject to arbitration.  As noted, the arbitration agreement states that the 
parties mutually agree to arbitrate ―any claim or action arising out of or in any way 
related to the hire, employment, remuneration, separation or termination of 
Employee,‖ and it further provides that the disputes subject to arbitration ―include 
but are not limited to:  claims for wages or other compensation due; claims for 
breach of any employment contract or covenant (express or implied); claims for 
unlawful discrimination, retaliation or harassment . . . , and Disputes arising out of 
or relating to the termination of the employment relationship between the parties, 
                                              
4  
The Trivedi court relied on two Court of Appeal decisions:  Fitz, supra, 118 
Cal.App.4th 702, and Mercuro v. Superior Court (2002) 96 Cal.App.4th 167 
(Mercuro).  (See Trivedi, supra, 189 Cal.App.4th at pp. 396-397.)  Neither of 
those opinions supports the Trivedi court‘s conclusion. 
 
In Fitz and Mercuro, the appellate courts held that the arbitration clauses at 
issue in those cases were substantively unconscionable because they ―compel[led] 
arbitration of the claims more likely to be brought by [the employee], the weaker 
party, but exempt[ed] from arbitration the types of claims that are more likely to 
be brought by [the employer], the stronger party.‖  (Fitz, supra, 118 Cal.App.4th 
at p. 725; see also Mercuro, supra, 96 Cal.App.4th at p. 176 [the arbitration 
agreement ―compels arbitration of the claims employees are most likely to 
bring . . . [and] exempts from arbitration the claims [the employer] is most likely 
to bring against its employees‖].) 
 
The arbitration clause in Trivedi, by contrast, did not compel arbitration of 
employee-initiated claims while exempting from arbitration employer-initiated 
claims; rather, it compelled arbitration of all employment-related claims, while 
permitting both parties to seek injunctive relief pursuant to section 1281.8(b).  
Nothing in Fitz or Mercuro supports the conclusion that such a provision is 
unfairly one-sided merely because one side is, as a practical matter, more likely to 
make use of it. 
 
13 
whether based on common law or statute, regulation, or ordinance.‖  (Original 
italics.)  In Baltazar‘s view, this provision makes clear that the kinds of claims 
typically brought by employees are all subject to arbitration, but it leaves in doubt 
whether the kinds of claims employers typically bring are also subject to 
arbitration, thus allowing the employer to litigate that issue when it brings a claim. 
We disagree.  The arbitration agreement at issue here makes clear that the 
parties mutually agree to arbitrate all employment-related claims:  that is, ―any 
claim or action arising out of or in any way related to the hire, employment, 
remuneration, separation or termination of Employee.‖  That provision clearly 
covers claims an employer might bring as well as those an employee might bring.  
The illustrative list of claims subject to the agreement is just that; the agreement 
specifically states that such claims ―include but are not limited to‖ the enumerated 
claims, thus making clear that the list is not intended to be exhaustive.  It thus 
casts no doubt on the comprehensive reach of the arbitration agreement.  It is not 
particularly remarkable that the agreement‘s list of examples might highlight 
certain types of claims that employees often bring, since part of the purpose of the 
agreement is to put employees such as Baltazar on notice regarding the scope of 
the agreement, thus eliminating any possible surprise.  The examples do not alter 
the substantive scope of the agreement, nor do they render the agreement 
sufficiently unfair as to make its enforcement unconscionable. 
Baltazar relies heavily on Pinedo v. Premium Tobacco Stores, Inc. (2000) 
85 Cal.App.4th 774, which concerned an arbitration agreement covering all 
disputes ― ‗relating to Employee‘s employment by Employer including any 
changes in position, conditions of employment or pay, or the end of employment 
thereof.‘ ‖  (Id. at p. 776.)  The Pinedo court cited this provision, among several 
others, in concluding that the agreement was substantively one-sided.  It explained 
that the agreement ―addresses only‖ claims ―which would normally be brought by 
 
14 
the employee against the employer.‖  (Id. at p. 781.)  We need not decide whether 
the Pinedo court was correct to read the agreement at issue in that case as 
―addressing only‖ claims likely to be brought by employees, since, as explained 
above, we think it clear that the differently worded agreement at issue in this case 
addresses both employment-related claims likely to be brought by employees and 
those likely to be brought by the employer.  In any event, the Pinedo court‘s 
assessment of the one-sidedness of the agreement at issue in that case rested not 
only on the provision‘s list of covered claims, but also on various provisions 
sharply restricting the damages a prevailing employee could recover (but not the 
damages a prevailing employer could recover) and requiring that all arbitration 
costs initially be borne by the employee.  (Id. at p. 781.)  In other words, the 
Pinedo court treated the wording of the provision governing covered claims as 
merely one more bit of evidence indicating that the agreement was substantially 
one-sided.  No comparable circumstances are present here. 
Finally, Baltazar argues that the arbitration agreement here is unduly one-
sided because it provides that, in the course of arbitration, ―all necessary steps will 
be taken to protect from public disclosure [Forever 21‘s] trade secrets and 
proprietary and confidential information.‖  Baltazar contends that because the 
agreement neither defines ―all necessary steps‖ nor specifies what constitutes 
―proprietary and confidential information,‖ the agreement unfairly demands that 
employees take whatever steps the employer deems ―necessary‖ to protect 
whatever information the employer claims to be ―proprietary and confidential.‖ 
Baltazar misreads the confidentiality provision.  Nothing in the agreement 
indicates that an employee must accede to any and all demands Forever 21 might 
make for the protection of confidential and proprietary information.  As 
defendants explain:  ―This provision contemplates that if trade secret, confidential 
and proprietary information need[s] to be introduced into the arbitration that the 
 
15 
parties [will] work with the arbitrator to make sure that such information is not 
disclosed to the public.‖  The agreement does not restrict the use of such 
information in the proceeding, nor does it pretermit any determination of whether 
a particular piece of information is a trade secret or otherwise qualifies as 
proprietary and confidential.  Agreements to protect sensitive information are a 
regular feature of modern litigation, and they carry with them no inherent 
unfairness. 
To the extent that Baltazar‘s complaint is instead that the agreement calls 
for the protection of an employer’s confidential information without similarly 
calling for the protection of the confidential information of employees, we disagree 
with the suggestion that this omission renders the arbitration agreement unduly 
harsh or one-sided.  As we stated in Armendariz, supra, 24 Cal.4th at page 117:  
― ‗[A] contract can provide a ―margin of safety‖ that provides the party with 
superior bargaining strength a type of extra protection for which it has a legitimate 
commercial need without being unconscionable.  [Citation.]‘ ‖  Here, the basis for 
the extra measure of protection is a legitimate commercial need to protect Forever 
21‘s ―valuable trade secrets and proprietary and confidential information‖ from 
public disclosure.  Although Baltazar may dislike the wording of the 
confidentiality provision, she does not dispute that it is based on a legitimate 
commercial need.  Moreover, nothing in the agreement precludes employees from 
seeking comparable protection for their personal information during arbitration 
proceedings, as circumstances may warrant. 
 
16 
 
III. 
We conclude that the parties‘ arbitration agreement is not unconscionable.  
Accordingly, we affirm the judgment of the Court of Appeal. 
 
 
 
 
 
 
 
KRUGER, J. 
 
WE CONCUR: 
 
CANTIL-SAKAUYE, C. J. 
WERDEGAR, J. 
CHIN, J. 
CORRIGAN, J. 
LIU, J. 
CUÉLLAR, J. 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Baltazar v. Forever 21, Inc. 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 212 Cal.App.4th 221 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S208345 
Date Filed: March 28, 2016 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Raul A. Sahagun 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Paul Hastings, Paul. W. Cane, Jr.; Gilbert, Kelly, Crowley & Jennett, Arthur J. McKeon III, Rebecca J. 
Smith and Edward E. Ward for Defendants and Appellants. 
 
Debra J. La Fetra for Pacific Legal Foundation as Amicus Curiae on behalf of Defendants and Appellants. 
 
Law Offices of Mark Joseph Valencia, Valencia & Cywinska, Mark Joseph Valencia and Izabela Cywinska 
Valencia for Plaintiff and Respondent. 
 
 
 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Paul W. Cane, Jr. 
Paul Hastings 
55 Second Street, 24th Floor 
San Francisco, CA  94105-3441 
(415) 856-7000 
 
Mark Joseph Valencia 
Valencia & Cywinska 
355 S. Grand Avenue, Suite 2450 
Los Angeles, CA  90071 
(213) 627-9944