Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-00281/USCOURTS-cand-3_04-cv-00281-21/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1391 Personal Injury

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NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ROBERT RAMIREZ, et al.

Plaintiff,

 v.

CINTAS CORPORATION,

Defendant.

 /

No. C 04-00281 JSW

ORDER GRANTING IN PART

AND DENYING IN PART

MOTION OF DEFENDANT

CINTAS CORPORATION TO

DISMISS CLAIMS OF PLAINTIFF

JAMES MORGAN OR, IN THE

ALTERNATIVE, STAY HIS

CLAIMS AND COMPEL

ARBITRATION. 

INTRODUCTION

This matter comes before the Court upon consideration of Cintas Corporation’s

(“Cintas”) motion to dismiss the claims of plaintiff James Morgan (“Morgan”) or, in the

alternative, to compel arbitration and stay Morgan’s claims. Having considered the parties’

pleadings, relevant legal authority, having had the benefit of oral argument, and good cause

appearing, the Court GRANTS the motion to compel arbitration on the conditions set forth

herein and HEREBY STAYS this action as to Plaintiff Morgan. The Court DENIES Cintas’

motion to the extent it seeks to dismiss Morgan’s claims. 

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FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Morgan was employed by Cintas as a driver, a position also known as a Sales Service

Representative, in San Leandro, California from approximately December 27, 1999 to March 

26, 2004. (Fourth Am. Compl., ¶¶ 14, 33.) Morgan signed two versions of Cintas’ 

employment agreements, a 1999 Version and a 2003 Version (“the 2003 Employment

Agreement”), each of which contained an arbitration clause. It is the arbitration clause in the

2003 Employment Agreement that is pertinent to this motion (hereinafter “the Arbitration

Clause”). Morgan’s 2003 Employment Agreement is witnessed by an “Employer Witness” as

well as an “Employee Witness.” Morgan’s witness is Ms. Hilary Toyryla, who is Cintas’

Human Resources Manager. (Declaration of Hilary Toyryla (“Toyryla Decl.”), ¶ 1.)

Cintas’ 2003 Employment Agreement is six pages long. (Toyryla Decl., Ex. B.) The

Arbitration Clause is set forth on pages four and five of the 2003 Employment Agreement and is

in the same type size and font as other provisions of that document. (See id.)

The Arbitration Clause provides as follows:

8. EXCLUSIVE METHOD OF RESOLVING DISPUTES OR

DIFFERENCES.

Should any dispute or difference arise between Employee and

Employer concerning whether either party at any time violated any

duty, right, law, regulation, public policy, or provision of this

[Employment] Agreement, the parties will confer and attempt in good

faith to resolve promptly such dispute or difference. The rights and

claims of Employer covered by this Section 8, including the

arbitration provisions below, include Employer’s claims for damages,

as well as reasonable costs and attorneys’ fees, caused by Employee’s

violation of any provision of this [Employment] Agreement or any

law, regulation, or public policy. The rights and claims of Employee

covered by this Section 8, including the arbitration provisions below,

specifically include but are not limited to all of Employee’s rights or

claims arising out of or in any way related to Employee’s employment

with Employer, such as rights or claims arising under the Age

Discrimination in Employment Act, as amended, Title VII of the Civil

Rights Act of 1965, as amended (including amendments contained in

the Civil Rights Act of 1991), the Americans with Disabilities Act, 42

U.S.C. § 1981, the Fair Labor Standards Act, the Employee

Retirement Income Security Act, state anti-discrimination statutes,

other state or local laws regarding employment, common law theories

such as breach of express or implied contract, wrongful discharge

defamation, and negligent or intentional infliction of emotional

distress. Excluded from the arbitration provisions below in this

Section 8 are all unemployment benefits claims, workers’

compensation claims, claims for a declaratory judgment or injunctive

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relief concerning any provision of Section 4 of this [Employment]

Agreement, and claims not lawfully subject to arbitration, including

charges or complaints filed with an administrative agency (but not

litigation connected with any such charge or complaint).

If any dispute or difference remains unresolved after the

parties have conferred in good faith, either party desiring to pursue a

claim against the other party will submit to the other party a written

request to have such claim, dispute or difference resolved through

impartial and confidential arbitration to be held in the county and

state where Employee currently works for Employer or most recently

worked for Employer. Any such request for arbitration must be

submitted within one year of the date when the dispute or difference

first arose or within one year of when the Employee’s employment

ends, whichever occurs first, unless a party claims a violation of a

specific statute having its own specific statute of limitations, in which

event that statutory time limit will apply. Arbitration under this

[Employment] Agreement will be conducted in accordance with the

AAA’s National Rules for Resolution of Employment Disputes, except

if such AAA rules are contrary to applicable state or federal law,

applicable law shall govern.

In any arbitration proceeding, the arbitrator will apply the

terms of this [Employment] Agreement as written, the Federal

Arbitration Act, and other relevant federal and state laws, including

time limits on claims. The parties will have the right to conduct civil

discovery and bring motions, as provided by the Federal Rules of

Civil Procedure and enforced by the Arbitrator. The arbitrator also

will have the authority to award either party appropriate relief,

including damages, costs and attorney’s fees, as available under

relevant laws. The Arbitrator will issue a decision or award in

writing, stating the essential findings of fact and conclusions of law.

Except for worker’s compensation claims, unemployment

benefits claims, claims for a declaratory judgment or injunctive relief

concerning any provision of Section 4 and claims not lawfully subject

to arbitration, the impartial arbitration proceedings, as provided above

in this Section 8, will be the exclusive, final and binding method of

resolving any and all disputes between Employer and Employee. The

arbitrator, however, will have the authority to entertain and decide a

motion for reconsideration of the arbitration award.

(Toyryla Decl., Ex. B, at 4-5 (emphasis added).) 

In addition to the Arbitration Clause, the 2003 Employment Agreement contains a choice

of law provision, which states that the 2003 Employment Agreement shall be “INTERPRETED,

GOVERNED, AND ENFORCED ACCORDING TO THE FEDERAL ARBITRATION

ACT, AND THE SUBSTANTIVE LAW (NOT INCLUDING CHOICE OF LAW

PRINCIPLES) OF THE STATE OF OHIO.” (Id. at 4 (bold and capitalization as in original).) 

The Arbitration Clause differs from prior versions of Cintas’ arbitration clauses in that it does not

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expressly provide for a cap on the costs an employee would incur to institute or participate in

arbitration proceedings.

Morgan has filed a complaint against Cintas based on employment discrimination

pursuant to 42 U.S.C. § 1981, as amended by the Civil Rights Act of 1991, Title VII, and

California’s Fair Housing and Discrimination Act and for violations of California Business and

Professions Code § 17200, et seq. 

On March 22, 2005, this Court granted in part and denied in part a similar motion filed by

Cintas with respect to different plaintiffs and involving different versions of Cintas employment

agreements and arbitration clauses (the “March 22, 2005 Order”). Cintas now moves to dismiss

Morgan’s claims relying on the Arbitration Clause in his 2003 Employment Agreement. In the

alternative, Cintas moves to compel arbitration and stay Morgan’s claims.

DISCUSSION

A. Legal Standards Applicable to Motions to Compel Arbitration.

Pursuant to the Federal Arbitration Act (“FAA”), arbitration agreements “shall be valid,

irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the

revocation of any contract.” 9 U.S.C. § 2. Once the Court has determined that an arbitration

agreement relates to a transaction involving interstate commerce, thereby falling under the FAA,

the Court’s only role is to determine whether a valid arbitration agreement exists and whether the

scope of the parties’ dispute falls within that agreement. 9 U.S.C. § 4; Chiron Corp. v. Ortho

Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The parties in this case do not

dispute that the claims at issue would fall within the scope of the Arbitration Clause; the only

issue is whether the Arbitration Clause is valid and enforceable.

The FAA represents the “liberal federal policy favoring arbitration agreements” and “any

doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” 

Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983). Under the

FAA, if the Court determines that the parties have agreed to arbitrate and that agreement has not

been honored, and the dispute falls within the scope of that agreement, the Court must order

arbitration. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 400 (1967). 

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1 To the extent the choice of law provision may affect matters pertaining to

portions of the 2003 Employment Agreement other than the Arbitration Clause, any disputes

between the parties about the applicable law should be for the arbitrator to resolve. See

Prima Paint, 384 U.S. at 403-04. 

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This is true even if the result might be the maintenance of separate proceedings in different fora. 

See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217 (1985).

Where, as here, a litigant sues to enforce statutory claims, that fact alone will not preclude

arbitration. The Supreme Court has “recognized that federal statutory claims can be

appropriately resolved through arbitration, and [it has] enforced agreements to arbitrate that

involve such claims.” Green Tree Fin. Corp.- Alabama v. Randolph, 531 U.S. 79, 89 (2000). If

statutory claims are involved and an arbitration agreement exists, the agreement should be

enforced “unless Congress itself has evinced an intention to preclude waiver of judicial remedies

for the statutory rights at issue,” or the litigant cannot effectively vindicate “[his or her] statutory

cause of action in the arbitral forum.” Gilmer v. Interstate Johnson/Lane Corp., 500 U.S. 20, 26-

28 (1991). 

Finally, notwithstanding the liberal policy favoring arbitration, by entering into an

arbitration agreement, two parties are entering into a contract. Volt Information Sciences, Inc. v.

Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 479 (1989) (noting that

arbitration “is a matter of consent, not coercion”). Thus, an arbitration agreement is “subject to

all defenses to enforcement that apply to contracts generally.” Ingle v. Circuit City Stores, Inc.,

328 F.3d 1165, 1170 (9th Cir. 2003). Although the Court initially can determine whether a valid

agreement to arbitrate exists, disputes over the meaning of specific terms within that agreement

are matters for the arbitrator to decide. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84

(2002); Prima Paint, 384 U.S. at 403-04 (holding that a “federal court may consider only issues

relating to the making and performance of the agreement to arbitrate”).

B. Choice of Law.1

The 2003 Employment Agreement provides that it is to be governed by Ohio law. 

(Toyryla Decl., Ex. B, § 7.) The parties dispute whether this provision is enforceable. The

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2 Section 187 of the Restatement Second of Conflicts of Law states that a

“forum will not refrain from applying the chosen law merely because this would lead to a

different result than would be obtained under the local law of the state of the otherwise

applicable law.” Rest. 2d Conf. of Laws, § 187 subd. g (emphasis added).

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following analysis relates only to the question of what state law should be applied to determine

whether the Arbitration Clause is valid.

California law generally favors enforcement of bargained for choice-of-law provisions. 

Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 465 (1992). When a court is faced with

whether it should enforce a choice-of-law provision it must first determine “(1) whether the

chosen state has a substantial relationship to the parties or their chosen transaction, or (2)

whether there is any other reasonable basis for the parties’ choice of law.” Id. at 466. If the

answer to either of those questions is in the affirmative, “the court must next determine whether

the chosen state’s law is contrary to a fundamental policy of California.” Id. (emphasis in

original). If there is a conflict between the designated forum law and California law, a court

must determine whether California has “a materially greater interest than the chosen state in the

determination of the particular issue.” Id. (quoting Rest. 2d Conf. of Laws, § 187, subd. (2)).

2

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the answer to this question is in the affirmative, the choice of law provision will not be enforced. 

Id.

It is undisputed that Ohio, as Cintas’ principal place of business, has a substantial

relationship to the parties and provides a reasonable basis for the choice of Ohio law. See

Nedloyd, 3 Cal. 4th at 467 (noting that substantial relationship will be met if one of the parties is

domiciled in or resides in the chosen state). Morgan claims that applying Ohio law would violate

fundamental California policy in three ways. First, Morgan argues that his claims for injunctive

relief under California’s unfair competition law are not arbitrable. See Cruz v. Pacificare Health

Systems, Inc., 30 Cal. 4th 303, 315-17 (2003). Although Morgan did not cite conflicting

authority in his brief, at oral argument he claimed that Eagle v. Fred Martin Motor Co., 157 Ohio

App. 3d 150 (2004) created a conflict with California policy. In Eagle, the court noted that the

Ohio Consumer Sales Practices Act (“CSPA”) did not preclude arbitration clauses in sales

contracts. Id., 157 Ohio App. 3d at 162. Morgan appears to suggest that the implied holding of

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Eagle is that claims for injunctive relief on a consumer claim could be arbitrated. Eagle makes

no such express statement. To the extent that there is a conflict between Ohio law and California

policy on the question of whether Section 17200 claims for injunctive relief are arbitrable, the

Court concludes that California has a materially greater interest in seeing its law applied because

Morgan is a California resident and worked for Cintas in California. As such, the Court will

apply California law on this issue. Morgan’s claim for injunctive relief under Section 17200 is

not subject to this Order and will be severed from his other claims.

Second, Morgan argues that Ohio law violates fundamental California policy as set forth

in Armendariz v. Foundation Health Psychare Servs., Inc., 24 Cal. 4th 83 (2000), because under

Ohio law Cintas would not be required to bear the costs of arbitration. The Court concludes

there is no true conflict on this point. Both Ohio and California apply the principle that if a

litigant is required to arbitrate statutory claims, he or she must be able to effectively vindicate

those rights in the arbitral forum and cannot be required to pay fees that he or she would not be

required to pay to litigate those claims in court. See Armendariz, 24 Cal. 4th at 93-96; id. at 110

(“imposition of substantial forum fees is contrary to public policy”); Gutierrez v. Autowest, Inc.,

114 Cal. App. 4th 77, 82-83 (2003) (discussing “centrality of costs” as concern in determining

whether statutory rights can be vindicated effectively in arbitration); Morrison v. Circuit City

Stores, Inc., 317 F.3d 646, 657-58 (6th Cir. 2003) (“If, then, the splitting or sharing of costs of

the arbitral forum under a particular arbitration agreement effectively prevents the vindication of

a plaintiff’s statutory rights, those rights cannot be subject to mandatory arbitration under that

agreement.”); cf. Eagle, 157 Ohio App. 3d at 166-171 (applying case-by-case approach to

determine arbitration agreement imposed excessive fees on litigant required to arbitrate statutory

claim). Moreover, in this case, there is no conflict because, as set forth in Section D infra, the

Court interprets the Arbitration Clause to require Cintas to bear all costs of an individual

arbitration. 

Finally, Morgan relies on Discover Bank v. Superior Court, 36 Cal. 4th 148 (2005), to

assert that California has a fundamental policy against waiver of classwide arbitration. The

Court cannot, however, read the Discover Bank case to hold California precludes all waivers of

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classwide arbitration when the California Supreme Court explicitly stated that it did “not hold all

class action waivers are necessarily unconscionable.” Id. at 162; see also Independent Ass’n of

Mailbox Center Owners, Inc. v. Superior Court, 2005 WL 2249918 at *8 (Cal. App. Sept. 16,

2005) (“classwide arbitration is well accepted under California law as workable and appropriate

in some cases”) (emphasis added) (“hereinafter “Independent Ass’n”). 

Furthermore, it does not appear that there is a conflict between California law and Ohio

law on this point. In the Eagle case, which like Discover Bank involved a consumer claim and

potentially small damages, the court refused to enforce an arbitration agreement that expressly

precluded class arbitration of claims under the Ohio CSPA on the ground that it would “hinder[]

the consumer protection purposes of the CSPA.” Unlike the arbitration agreements at issue in

the Discover Bank and Eagle cases, here the Arbitration Clause is silent on the question of class

arbitration. It would thus be up to the arbitrator to determine whether or not class arbitrations are

permitted under the Arbitration Clause. See Green Tree Fin. Corp. v. Bazzle, 539 U.S. 445, 453

(2003); Discover Bank, 36 Cal. 4th at 170-71. Because the Discover Bank case provides that in

some instances waivers of class arbitration may be permitted, the Court cannot conclude that

application of Ohio law would necessarily violate a fundamental California policy on this basis.

C. The Arbitration Clause Will Not Be Revoked on the Ground That It Is

Unconscionable.

Morgan contends that the Arbitration Clause is unconscionable and, therefore, is

unenforceable in its entirety. Although the Court could apply Ohio law to the Arbitration Clause,

the Court concludes that under either Ohio law or California law, the Arbitration Clause is not

unconscionable.

When a party challenges an arbitration agreement on the basis of unconscionability, that

party must demonstrate that the arbitration agreement is both procedurally and substantively

unconscionable. See Morrison, 317 F.3d at 666 (citing Jeffrey Mining Prods., L.P. v. Left Fork

Mining Co., 143 Ohio App. 3d 708, 718 (2001)); Armendariz, 24 Cal. 4th at 114. While under

both Ohio and California law, both elements must be present, under California law, a contract

may be unenforceable if there is little procedural unconscionability but great substantive

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unconscionability, and the reverse is also true. See Armendariz, 24 Cal. 4th at 114. As the party

challenging the Arbitration Clause on these grounds, Morgan bears the burden to demonstrate the

Arbitration Clause is unconscionable. He has not met this burden.

1. The Arbitration Clause is not procedurally unconscionable.

To determine whether a contract is procedurally unconscionable under Ohio law, courts

should look to such factors as the age, education, business acumen and experience of the parties,

which party drafted the agreement, whether the party seeking to avoid arbitration had the benefit

of counsel, and other such factors bearing on bargaining position of the parties. See Morrison,

317 F.3d at 666; Eagle, 157 Ohio App. 3d at 163. Under California law, the procedural element

of unconscionability “focuses on the unequal bargaining position and hidden terms common in

the context of adhesion contracts.” Independent Ass’n, 2005 WL 2249918 at 6; cf. Armendariz,

24 Cal. 4th at 114 (procedural element focuses on “oppression” or “surprise”). 

Morgan does not dispute the fact that he signed the 2003 Employment Agreement

containing the Arbitration Clause, which bears the signature of two witnesses, albeit Morgan’s

witness is a Cintas employee. (See Toyryla Decl., ¶ 1, Ex. B.) Rather, Morgan claims that he

does not recall the meeting during which he signed the 2003 Employment Agreement containing

the Arbitration Clause. There is no dispute that Cintas drafted the 2003 Employment Agreement. 

Similarly, there is no suggestion that Morgan was accompanied by counsel when he signed the

2003 Employment Agreement or that Morgan had the opportunity to consult counsel before

signing it. Morgan attests that in general he believed that he “had to sign whatever documents or

paperwork Cintas managers gave me to sign. I did not believe that I had a choice about whether

to sign or not, and I did not believe that I could change any of the words on the documents.”

(Morgan Decl., ¶ 17; see also id. ¶¶ 18-20.)

 Most of Morgan’s arguments with respect to procedural unconscionability relate to the

circumstances surrounding the execution and formation of the 2003 Employment Agreement as a

whole, rather than just the Arbitration Clause. Under recent Ninth Circuit authority, any issue

relating to the making of the 2003 Employment Agreement as a whole would be a matter for the

arbitrator to address. Nagrampa v. Mailcoups, Inc., 401 F.3d 1024, 1028 (9th Cir. 2005); cf.

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Guttierez v. Autowest, Inc., 114 Cal. App. 4th 77, 88 (2003) (“Of course, simply because a

provision within a contract of adhesion is not read or understood by the nondrafting party does

not justify a refusal to enforce it. The unbargained-for term may only be denied enforcement if it

is also substantively unreasonable.”) (emphasis added). The Sixth Circuit is in accord. See

Burden v. Check Into Cash of Ky., 267 F.3d 483, 491 n. 3 (6th Cir. 2001). 

Considering the question of procedural unconscionability as to the Arbitration Clause

itself, it is located at pages four and five of the six-page 2003 Employment Agreement. The

Arbitration Clause also is identified by a capitalized heading “EXCLUSIVE METHOD OF

RESOLVING DISPUTES OR DIFFERENCES.” Thus, it is not hidden within fine print or

buried within an otherwise lengthy agreement. Finally, although he did not attend college,

Morgan is a high school graduate, and he does not claim that he did not understand the

Arbitration Clause. (Morgan Decl., ¶ 3.) The Court considers it beyond dispute that there is a

measure of unequal bargaining power between Cintas and Morgan, but that fact alone will not

render the Arbitration Clause invalid. See Gilmer, 500 U.S. at 33. Considering all of the facts

and circumstances set forth above and notwithstanding the inequality of bargaining power

between Cintas and Morgan, the Court concludes that Morgan has not met his burden to show

that the Arbitration Clause itself is procedurally unconscionable. 

Moreover, even if the Court were to find that the circumstances surrounding the

formation and execution of the Arbitration Clause did render it procedurally unconscionable, the

Court concludes the Arbitration Clause is not substantively unconscionable and that any possible

procedural unconscionability does not rise to such a level that the Arbitration Clause should not

be enforced.

2. The terms of the Arbitration Clause do not render it substantively

unconscionable.

Under Ohio law, to determine if an arbitration agreement is substantively unconscionable,

the Court considers whether the terms of the clause are unfair and unreasonable. Morrison, 317

F.3d at 666; Eagle, 157 Ohio App. 3d at 163 (when evaluating substantive unconscionability,

court considers whether terms of contract “commercially reasonable”). Under California law, the

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3 Under the California Arbitration Act, Cintas would not be precluded from

instituting a request in court for an injunction, notwithstanding the existence of an arbitration

agreement, on the ground that any potential award would be rendered ineffectual without

such provisional relief. See Cal. Civ. Proc. Code § 1281.8(b).

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concept of substantive unconscionability relates to the actual terms of the arbitration agreement

and whether those terms are “overly harsh” or “one-sided.” Armendariz, 24 Cal. 4th at 114. 

Morgan claims the Arbitration Clause is substantively unconscionable on two grounds. 

First, he argues that the Arbitration Clause lacks mutuality of remedy because the claims that

Cintas is most likely to litigate against employees are excluded from arbitration. Morgan also

argues that the Arbitration Clause is substantively unconscionable because it effectively prohibits

class arbitrations by imposing excessive fees. The Court rejects both of these arguments. 

a. Mutuality.

Morgan argues that the Arbitration Clause lacks mutuality because Cintas is not required

to arbitrate claims for declaratory or injunctive relief arising out of a breach of Section 4 of the

2003 Employment Agreement. In Armendariz, the California Supreme Court stated that

arbitration agreements require a “modicum of bilaterality” to be enforceable. Armendariz, 24

Cal. 4th at 117. Although the Armendariz court found the agreement in question to be lacking in

mutuality, the court recognized that in some cases an employer might be able to demonstrate that

business realities required the exclusion of certain types of claims from the arbitration process. 

Id. at 117-18. 

Under the Arbitration Clause, Cintas must arbitrate all claims for damages it may bring

against its employees. (Toyryla Decl., Ex. B at 4.) Cintas has, however, reserved the right to

litigate claims for declaratory or injunctive relief for a breach of Section 4 of the 2003

Employment Agreement, which pertains to such issues as Cintas’ confidential and proprietary

information, trade secrets and non-competition agreements.

3

 When he signed the 2003

Employment Agreement, Morgan agreed and acknowledged that “a breach of any covenant in

this Section 4 will cause Employer irreparable injury and damage for which Employer may have

no adequate remedy.” (Toyrola Decl., Ex. B at 3.) 

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The Court concludes that Cintas has demonstrated that there are reasonable business

realities that justify excluding claims for declaratory and injunctive relief from arbitration.

Therefore, the Arbitration Clause contains the necessary modicum of bilaterality and is not

substantively unconscionable on this basis. Although Morgan raises this argument only under

California law, the Court would reach the same conclusion under Ohio law. See Raasch v. NCR

Corp., 254 F. Supp. 2d 847, 855 (S.D. Ohio 2003) (finding arbitration agreement to be

sufficiently mutual even where it excluded disputes over confidential information, non-compete

agreements, and other intellectual property). 

b. Prohibition on class arbitration.

 Morgan also argues that the Arbitration Clause is substantively unconscionable under

both Ohio and California because it prohibits class arbitration. Morgan concedes, as he must,

that there is no express ban on class arbitration. Rather, he argues that by imposing high costs to

proceed by way of class arbitration, the Arbitration Clause effectively prohibits class treatment. 

Because the Arbitration Clause does not expressly prohibit class arbitration, the question of

whether a class arbitration is permitted is a matter for the arbitrator to decide. See Bazzle, 539

U.S. at 453; Discover Bank, 36 Cal. 4th at 170-71. Accordingly, the Court does not find the

Arbitration Clause to be substantively unconscionable on this basis. 

D. Morgan Has Met His Burden to Show That He Cannot Effectively Vindicate

His Statutory Claims on An Individual Basis Under the Arbitration

Agreement.

Notwithstanding the conclusion that the Arbitration Clause is not unconscionable, this

Court is charged with the responsibility of ensuring that Morgan effectively can vindicate his

statutory claims in an arbitral, rather than a judicial, forum. See Randolph, 531 U.S. at 90;

Armendariz, 24 Cal. 4th at 93-96; Morrison, 317 F.3d at 658. In Gilmer, the Supreme Court

made clear that the focus of this question is whether the cause of action can be vindicated

effectively, not whether a party can proceed on the cause of action in any particular manner. 

Gilmer, 500 U.S. at 28. Thus, the pertinent questions are whether Congress intended to prevent

waiver of the judicial forum or whether there is an inherent conflict between the statute at issue

and the FAA. Id. at 26-27.

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4 Attached as Exhibit 2 to the Declaration of Nina Rabin.

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Morgan does not contend that there is a legislative intent to preclude waiver of a judicial

forum for his Title VII claim, FEHA claim, or the damages and restitution aspect of his Section

17200 claim. Therefore, absent a finding that he cannot effectively vindicate his statutory causes

of action in the arbitral forum, the fact that Morgan asserts statutory claims that he wishes to

pursue by way of class action does not prevent the Court from enforcing the Arbitration Clause. 

Morgan’s only valid challenge to the Arbitration Clause on this point would be that it would be

prohibitively expensive for him to arbitrate these claims on an individual basis. 

Earlier versions of Cintas’ arbitration clauses placed an express cap on the fee an

employee would be required to pay to initiate arbitration. In this case, however, to determine

what fees an employee would be required to pay to arbitrate his or her claims, one must look to

the American Arbitration Association’s National Rules for Employment Disputes (“the AAA

Employment Rules”). Under the AAA Employment Rules, if the arbitration arises out of an

Employer Promulgated Plan, an employee’s filing fee is capped at $125. (See AAA Employment

Rules - Administrative Fee Schedule.)4 If, however, the arbitration arises out of an Individually

Negotiated Employment Agreement or Contract, and even if that contract references or

incorporates an Employer Promulgated Plan, the filing fee to initiate arbitration ranges from $750

to $10,000, and an employee also must pay a case service fee ranging from $200 to $4,000,

depending upon the size of his or her claim. (Id.) 

The fact that the Arbitration Clause does not contain an express cap on the amount of fees

Morgan would be required to pay to initiate arbitration renders it fundamentally different from

the earlier versions of Cintas’ arbitration clauses upheld in this Court’s March 22, 2005 Order. 

Nor is it clear, as Cintas argues, that the Arbitration Clause would be considered an Employer

Promulgated Plan, capping the fee at $125. Thus, the evidence in the record demonstrates that

there is a fifty percent chance Morgan would be required to pay at least $950 to initiate an

individual arbitration. That fee alone exceeds any filing fee he was required to institute his

lawsuit. Further, Morgan has submitted a declaration outlining his monthly income and expenses

and attesting that he could not afford to pay more than a $125 filing fee to arbitrate his claims. 

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5 The Court expresses no opinion on whether Morgan can proceed on a

classwide basis in arbitration; nor does it express an opinion on what fees Morgan might be

required to pay if he chooses to file such an arbitration.

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(Morgan Decl., ¶ 15.) Cintas has not rebutted this evidence. Accordingly, the Court concludes

that Morgan has met his burden of showing that the Arbitration Clause as drafted effectively

precludes him from vindicating his statutory rights on an individual basis. 

However, the Court does not find the Arbitration Clause in this case to be permeated with

illegality such that it would refuse to enforce the Arbitration Clause. The Court concludes that

the only objectionable provision relates to the fees Morgan would be required to pay to arbitrate

his claim. Under Ohio law, the question of whether an agreement “is entire or divisible depends

generally on the intention of the parties, and this must be ascertained by the ordinary rules of

construction.” Morrison, 317 F.3d at 675 (quoting Toledo Police Patrolmen’s Ass’n v. City of

Toledo, 94 Ohio App. 3d 734, 740 (1994)). Under California law, if the Court can enforce the

Arbitration Clause without an unconscionable clause or restrict the application of an

unconscionable clause to avoid an unconscionable result, it may do so. Armendariz, 24 Cal. 4th

at 121-22 (citing Cal. Civ. Code § 1670.5). 

The Court concludes that it can restrict the application of the objectionable provision. At

best, the Arbitration Clause is ambiguous as to the question of fees because of the reference to

the AAA Employment Rules, which contain two different fee schedules. Cintas drafted the

Arbitration Clause and the Court shall construe any ambiguity against Cintas. Further, the

Arbitration Clause states that if the AAA Employment Rules conflict with applicable federal or

state law, the applicable law governs. Under federal and state law, Morgan must be able to

effectively vindicate his statutory claims on an individual basis in an arbitral forum. Randolph,

531 U.S. at 90; Armendariz, 24 Cal. 4th at 93-96; Morrison, 317 F.3d at 658. Accordingly, the

Court construes the Arbitration Clause to require Cintas to pay all costs associated with an

individual arbitration.5

CONCLUSION 

For the foregoing reasons, the Court GRANTS Cintas’ motion to compel Morgan to

arbitrate his claims under Title VII, FEHA, and his claims under Section 17200, except to the

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6 Cintas filed a request for judicial notice, to which Morgan did not object. 

Because the documents were not necessary to resolution of this motion, Cintas’ request is

DENIED.

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extent Morgan he seeks injunctive relief. The Section 17200 claim for injunctive relief is

severed from the arbitrable claims. Further, this action is HEREBY STAYED as to Morgan

pending completion of an arbitration proceeding within this judicial district. See 9 U.S.C. § 4. 

The Court DENIES Cintas’ motion to dismiss to the extent it seeks to dismiss Morgan from this

action.6

IT IS SO ORDERED.

Dated: November 2, 2005 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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