1 Filed 6/11/ 24 Fredeen v. California Cemet e ry and Funeral Services CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPEL L ATE DISTRICT

DIVISION EIGHT

LISA FREDEEN et al.,

Plaintiff s and Responden ts
,

v.

CALIFORNIA CEMETERY AND FUNERAL SERVICES, LLC,

Defendant and Appellan t. B 3 2 6031

( Los Angeles County Super. Ct. No. BC706930 )

APPEAL from an order of the Superior Court of
Los Angeles County. Kristin S. Escalante, Judge. Affirmed

. Stinson, Carrie M. Francis

, and Lonnie J. Williams, Jr.

, for
Defendant and A ppellant

. Matern Law Group, Matthew J. Matern, Debra J. Tauger and Launa Adolph for Plaintiffs and Respondents.

____________________________ _2 Defendant and Appellant California Cemetery and Funeral Services, LLC (CCFS) appeals from an order denying its motion to compel arbitration of two of its former employees’ individual claims under the Private Attorneys General Act of 2004 (PAGA ) ( Lab. Code, § 2698 et seq.). The trial court found the arbitration agreement procedurally and substantively unconscionable,
declined to sever the unconscionable terms , and ruled the agreement was un enforceable. CCFS argues the trial court’s moderate procedural unconscionability finding was based on the unsupported conclusion that the employees were subjected to economic

pressure , and that CCFS did not explain the agreement . It als o argues the trial court’s substantive unconscionability finding was

erroneous because it was based on speculation and not on the actual agreements between the parties. Last, CCFS argues the
trial court should have severed the unconscionable terms, found the remainder of the agreement enforceable, and compelled the employees ’ claims to arbitration.
For the reason s stated below, we affirm.

BACKGROUND
I. Plaintiffs’ employment with CCFS and the arbitration agreement s Plaintiffs and Respondents Lisa Fredeen and Sarah Mitchum are CCFS’s former employees. Fredeen worked for
CCFS as a p re p lanning a dvisor from 2012 until mid

- 2017. Mitchum worked for CCFS as a f amily s ervices c ounselor r ookie from approximately November of 2017 to February of 2018. During Fredeen’s first week of employment, she attended onboarding training with other p re p lanning a dvisors. CCFS provided her with a large packet of documents to sign, including
an arbitration agreement on a three

- page preprinted form

.3

Fredeen signed each document, including the arbitration agreement, and understood her signature was required if she
wanted to work for CCFS. At the start of her employment,
Fredeen also s ign ed an employment agreement with

nonc ompetition and confidentiality restrictions.
Mitchum also completed onboarding training during her first week of employment. The onboarding process required her
to watch online training videos from her desk computer while electronically signing documents

. Mitchum completed the training alone from her desk and did not have the opportunity to ask questions regarding the various documents she sign ed

. She believed she would be unable to progress with the online training if she did not sign each document. M itchum signed the same arbitration agreement as Fredeen , however, unlike Fredeen, Mitchum did not sign an employment agreement with
the noncompetition and confidentiality restrictions

. CCFS did not explain to either Fredeen or Mitchum they
could review the arbitration agreement with an attorney or negotiate its terms

. II. Procedural history
Plaintiffs sued CCFS for PAGA violations. Plaintiffs sought civil penalties pursuant to Labor Code section 2699, subdivision (f), on behalf of al l nonexempt CCFS employees for: (1) failure to provide meal breaks in violation of Labor Code sections 226.7 and 512; (2) failure to provide rest breaks in
violation of Labor Code section 226.7; (3) failure to pay meal and
rest break premiums as required by Labor Code section 226.7, subdivision (b); (4) failure to provide accurate itemized wage
statements in violation of Labor Code section 226, subdivision (a);4

and (5) failure to reimburse personal cell phone expenses in
violation of Labor Code section 280 2. CCFS moved to compel Plaintiffs’ claims to arbitration. Plaintiffs opposed on the grounds that the arbitration agreement was unenforceable because the agreement was unconscionable,
and the unconscionable terms could not be severed from the agreement

. The trial court agreed with Plaintiffs and denied the
motion

. The trial court found a moderate degree of procedural unconscionability because the agreement was an adhesion

contract ; Plaintiffs lacked a meaningful choice and were subjected to economic p ressure to sign the agreement ; Plaintiffs were required to sign the agreement as a condition of their employment ; CCFS presented Plaintiffs with many documents to sign without any explanation during the onboarding process ; and
CCFS did not encourage Plaint iffs to consult with an attorney or
otherwise take time to review the documents.
The trial court also found that the agreement was substantively unconscionable. I t found substantively unconscionable the arbitration agreement’s exclusions clause, which excluded from arbitration any claims for breach of CCFS’s confidentiality and noncompete agreements. The trial court
noted the excluded claims were more likely to be brought by CCFS, which had not provided any business justification for the
exclusions. Next, the trial court found substantively unconscionable the arbitration agreement’s confidentiality
clause , which could increase Plaintiffs ’ costs by preventing the m from conducting informal discovery through interviews to develop
evidence

, and could discourage other employees from pursuing potential claims

.5 In denying CCFS’s motion, t he trial court found the agreement’s lack of mutuality would require it to reform t he agreement
, and declined to exercise its discretion to sever the
unconscionable terms. CCFS appealed. DISCUSSION CCFS argues the trial court should have compelled Fredeen
and Mitchum to arbitration as the agreement was neither procedurally nor substantively unconscionable

. To the extent any provisions were unconscionable, CCFS argues the trial court
abused its discretion when it declin ed to sever those provisions and refused to enforce the agreement. We disagree.
I. Governing law and standard of review

“ ‘A party to an arbitration agreement may petition the court to compel other parties to arbitrate a dispute that is covered by their agreement.’ ” ( Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5th 840, 858 .) “Although there is general policy favoring arbitration, a party cannot be compelled to accept arbitration of a controversy which they have not agreed to arbitrate.” ( Garcia v. Expert Staffing West (2021) 73 Cal.App.5th 4 08, 413.) “ Whether an agreement to arbitrate
exists is a threshold issue of contract formation and state
contract law. [Citations.] The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement.” ( Av ila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5 th 835 843

– 844.) A court may refuse to enforce an arbitration agreement if it finds as a matter of law that the agreement is unconscionable at the time it was made . ( Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 98 , 1146

( Armendariz ).) In its discretion, “ ‘ the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so lim it the application of any unconscionable clause as to avoid any
unconscionable result. ’ ” ( Id

. at p

. 114 .)

“ The general principles of unconscionability are well
established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party. [Citation.] Under this standard, the unconscionability doctrine ‘ “ has both a procedural and a
substantive element.” ’ [Citation.] ‘ The pro cedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power. [Citations.] Substantive unconscionability pertains to the fairness of an agreement ’ s actual terms and to assessments of whether they are overly harsh or one

- sided. ’ ” ( OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125 ( OTO ) .)

“ Both procedural and substantive unconscionability must be shown for the defense to be established, but ‘ they need not be present in the same degree. ’ [Citation.] Instead, they are evaluated on ‘ “ a sliding scale. ” ’ [Citation.] ‘ [T]he more
substantivel y oppressive the contract term, the less evidence of procedural unconscionability is required to ’ conclude that the
term is unenforceable. [Citation.] Conversely, the more deceptive or coercive the bargaining tactics employed, the less
substantive unfair ness is required. [Citations.] A contract ’ s substantive fairness ‘ must be considered in light of any procedural unconscionability ’ in its making. [Citation.] ‘ The ultimate issue in every case is whether the terms of the contract7

are sufficiently unfair , in view of all relevant circumstances, that
a court should withhold enforcement. ’ ” ( OTO, supra , 8 Cal.5th at pp. 125

– 126 .) “ The burden of proving unconscionability rests upon the party asserting it. ” ( Id

. at p. 126 .) Where the evidence is undisputed , we review the trial court’s unconscionability finding de novo. ( OTO, supra, 8 Cal.5th at p. 126.)
II

. Procedural u nconscionability

“ A procedural unconscionability analysis ‘ begins with an inquiry into whether the contract is one of adhesion. ’ [Citation.] An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power ‘ on a take

- it

- or

- leave

- it basis. ’ [Citations.] Arbitration contracts imposed as a condition of employment are ty pically adhesive [citations] , and the agreement here is no exception. The pertinent question, then, is whether circumstances of the

contract ’ s formation created such oppression or surprise that closer scrutiny of its overall fairness is required. [Citati ons.]

‘ “ ‘ Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed
form.’ ” ’ ” ( OTO

, supra , 8 Cal.5th at p. 126
, original italics .)

“ ‘ The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed c ontract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party ’ s review of the proposed contract was aided by an attorney. ’ [Citations.] With respect to preemployment arbitration contracts, we have observed8

that ‘ the economic pressure exerted by employers on all but the most sought

- after employees may be particularly acute, for the arbitration agreement stands between the employee and

nece ssary employment, and few employees are in a position to refuse a job because of an arbitration requirement. ’ ” ( OTO

, supra , 8 Cal.5th at pp. 126

– 127
, original italics .) In the “prehiring” setting, we must be “ ‘particularly attuned’ to the danger of op pression and overreaching.” ( Id . at p. 127.) Here, we find the agreement has at least a modicum of procedural unconscionability. First and foremost, as CCFS admits, the agreement was an adhesion contract presented to
Plaintiffs on a take

- it

- or

- leave

- it basis during their onboarding process and as a condition of their employment. ( Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 796.) While the arbitration agreement was not particularly long or complex,

a dditional circumstances supported a finding of procedural unconscionability . Here, Plaintiffs were not advised that they could have an attorney review the agreement ( Swain v. LaserAway Medical Group, Inc. (2020) 57 Cal.App.5th 59, 69 ( Swain ) ), CCFS did no t offer to explain the agreement to
Plaintiffs ( Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 244 ( Carbajal )), and CCFS presented the agreement during its onboarding process , which required Plaintiffs to sign each document to complete the process wit hout giving them additional time to review the agreement ( Murrey v. Superior Court (2023)
87 Cal.App.5th 1223, 1238 ( Murrey )).
Given the se circumstances, we find a t least a low level of procedural unconscionability.9

III

. Substantive u nconscionability “Substantive unconscionability examines the fairness of a contract’s terms. This analysis ‘ensures that contracts, particularly contracts of adhesion, do not impose terms that have been variously described as “ ‘ “overly harsh” ’ ” [citat ion],

“ ‘unduly oppressive’ ” [citation], “ ‘so one

- sided as to “ shock the
conscience” ’ ” [citation], or “unfairly one

- sided” [ citation ]

. All of these formulations point to the central idea that the unconscionability doctrine is concerned not with “a sim ple old

fashioned bad bargain” [citation], but with terms that are “unreasonably favorable to the more powerful party.” ’ [Citation.]
Unconscionable terms ‘ “impair the integrity of the bargaining process or otherwise contravene the public interest or pu blic policy” ’ or attempt to impermissibly alter fundamental legal duties.” ( OTO

, supra , 8 Cal.5th at pp. 129

– 130.)
A. Exclusions clause Plaintiffs argue the exclusions clause is substantively
unconscionable. We agree.
The exclusions clause excludes from arbitration any claims brought “to enforce any non

- competition or confidentiality agreement which may exist between the parties.” “Substantively unconscionable terms may take various forms, but may generally be described as unfairly one

- side d.” ( Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071.) “One
such form

. . . is the arbitration agreement’s lack of a ‘ “modicum of bilaterality,” ’ wherein the employee’s claims against the employer, but not the employer’s claims against the employee, are subject to arbitration. ” ( Id

. at p p . 1071

– 1072.) One

- sided provisions in adhesive contracts, like the one at issue here, are “a hallmark of substantive unconscionability.” ( Swain

, supra ,10

57 Cal.App.5th at p. 73, citing Armendariz

, supra , 2 4 Cal.4th at

p. 118.) Indeed, a series of cases found similar exclusion clauses to be substantively unconscionable where the party with superior bargaining power has included a carve

- out for claims it is more likely to bring against the weaker party while limiting the latter

to arbitration . (See, e.g., Davis v. Kozak (2020) 53 Cal.App.5th 897, 916; Swain

, supra , 57 Cal.App.5th at p. 72; Ramirez v. Charter Communications, Inc. (2022) 75 Cal.App.5th 365, 383; Carbajal

, supra , 245 Cal.App.4th at p. 250; Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 725 ( Fitz ) ; Samaniego v. Empire Today

, LLC (2012) 205 Cal.App.4th 1138, 1147

– 1148 ( Samaniego ) ; O’Hare v. Municipal Resource Consultants (2003) 107 Cal.App.4th 267, 274.) And, while our Supreme Court has recognized that the party with the superior bargaining power may include certain carve

- outs for legitimate business purposes ( Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1250 ( Ba ltazar ) ), there is no indication that CCFS made any showing
here. CCFS argues the exclusions clause is not substantively unconscionable because it is irrelevant to the present dispute and the underlying noncompete agreement is unenforceable. We are

not persuaded. CCFS argues the exclusions clause is irrelevant as “there is
no reason to believe that CCFS or Plaintiffs will assert claims to enforce any non

- compete and confidentiality agreement between them or any reason to believe that the [agreement’s] exclusion of those claims has any impact on this case.” CCFS’s argument is not persuasive because unconscionability is determined by evaluating the terms at the time the contract is made. ( Civ. Code, §1670.5, subd. (a) .)11 Neither of the unpublished federal district court decision s cited by CCFS address th e rule that unconscionability must be evaluated in the context of when the parties entered into the agreement. (Compare Civ. Code, § 1670.5, subd. (a) with Steele v. American Mortg. Mana gement Services (E.D. Cal., Oct. 26, 2012,
No. 2:12

- CV

- 00085 WBS JFM ) 2012 WL 5349511, at *8; Marks v. Bridgestone Americas, Inc. (C.D. Cal., Nov. 16, 2015, No. 2 : 15

- CV

05153

- CAS

- RAO) 2015 WL 13919149, at *14

. ) Further, in both cases, the district court assumed without a factual basis that the parties seeking arbitration had a justifiable reason for the
exclusion clauses . ( Steele v. American Mortg. Management
Services , at *8; Marks v. Bridgestone Americas, Inc

. , at *14.) Here, CCFS has not offered any plausible justification for the
exclusion.
Nor are we convinced by CCFS ’s argument that the exclusions clause is not substantively unconscionable because it is partially unenforceable as the noncompet e agreement to which it purportedly applies is illegal and irrelevant. Again, we determine unconscionability at the time the contract was made
and evaluate the harshness of the agreement’s terms. ( Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 920

. ) Moreover, a n illegal provision only adds to a contract’s unconscionability, as the agreement subjects employees to provisions that the Legislature expressly outlawed. (See Samaniego

, supra , 205 Cal.App.4th at p. 1147 ; Bakersfield College v. California C ommunity College Athletic Assn. (2019)

41 Cal.App.5th 753, 767.) Accordingly, we find the exclusions clause is substantively
unconscionable.12 B. Confidentiality clause Plaintiffs also argue the arbitration agreement’s confidentiality clause is unconscionable. We agree. The confidentiality clause states: “The parties agree and acknowledge that any arbitration proceedings between them, and the outcome of such proceedin gs, shall be kept strictly confidential; provided however, that [CCFS] may disclose such information to the extent required by law and to its associates, agents and professional advisors who have a legitimate need to know such information, and the Associat e may disclose such information (1) to the extent required by law, (2) to the extent that the Associate is required to disclose same to professional persons assisting Associate in preparing tax returns, and (3) to
Associate ’ s legal counsel.”
Courts have r ecognized that confidentiality clauses in employment arbitration agreements can be problematic

, because they can hinder the employee from engaging in informal discovery in pursuit of litigation. ( Ramos v. Superior Court (2018) 28 Cal.App.5th 1042, 1066; s ee also Hasty v. American
Automobile Assn. etc. (2023) 98 Cal.App.5th 1041, 1062 ( Hasty ) .) Here, the confidentiality clause is sufficiently restrictive to impair Plaintiffs’ ability to conduct informal discovery and investigate their respective claims. E ssentially, the confidentiality clause prohibits the Plaintiffs from disclosing anything about the arbitration to anyone except for their legal counsel, a tax preparer, and to the extent required by law. Meanwhile, CCFS has expressly reserved the right to disclose the arbitration proceedings to its “ associates, agents and professional advisors who have a legitimate need to know such information .” Thus, the confidentiality clause is unfairly one

- sided in that it13

allows CCFS to disclose the arbitration to v irtually anyone
involved with its business and the claim itself while Plaintiffs can disclose the proceeding to their legal counsel, their tax preparers,
and anyone else that can compel the disclosure under the law. This overly restrictive confidentiality clause would certainly impair Plaintiffs’ ability to develop their claims against CCFS.
We note , like the exclusions clause above, our Supreme Court has recognized “a confidentiality provision in an arbitration agreement is not per se unconscionable whe n it is based on a legitimate commercial need (such as to protect trade secrets or proprietary information).” ( Murrey

, supra , 87 Cal.App.5th at p. 1254, citing Baltazar

, supra , 62 Cal.4th at

p. 1250.) However , CCFS has offered no such justification beyond
its status as a limited liability company and its need to disclose certain information to its agents to participate in the arbitration.
This justification , however, does nothing to assuage our concerns that the st rict confidentiality imposed on Plaintiffs would significantly impair their ability to conduct informal discovery or otherwise pursue their claims

. Nor are we convinced that the substantive unconscionability of the confidentiality clause has been lessene d
to the extent it allows Plaintiffs to disclose certain information to the extent required by law. First, t he confidentiality clause’s purported catch

- all provision “ does not save it because the employee would have no way of knowing what would be covered or not covered by this provision.” ( Hasty

, supra , 98 Cal.App.5th at p. 1062.) Second, t he language limits Plaintiffs to disclosures
to those that are “required” by law rather than merely disclosures that are, for example, permitted by law. The language implies that the Plaintiffs may only disclose the arbitration proceedings14

when they are compelled to do so. Thus, the confidentiality clause is still sufficiently restrictive to limit Plaintiffs ’ ability to investigate their claims and conduct informal d iscovery. Moreover, for the reasons stated above, we also reject CCFS’s argument that the confidentiality clause is not substantively unconscionable in the context of the specific claims
here. T he law is clear that we determin e unconscionability at the

t ime the agreement was made. (Civ. Code, § 1670.5, subd. (a).) Accordingly, we find the confidentiality clause substantively unconscionable. Finally, for the reasons established above, we find that the record supports the conclusion that the agreement is substantively unconscionable to a high degree.
IV. Severability
Because we agree with the trial court’s finding that the arbitration agre ement is both procedurally and substantively unconscionable, we turn to the issue of severance.

“ Under Civil Code section 1670.5, subdivision (a), a trial court has discretion to ‘ “ refuse to enforce the contract as a whole if it is permeated by the unco nscionability, or it may strike any single clause or group of clauses which are so tainted or which are contrary to the essential purpose of the agreement, or it may simply limit unconscionable clauses so as to avoid unconscionable
results. ” ’ ” ( Carbajal

, supra , 245 Cal.App.4th at p. 254 , quoting
Armendariz

, supra , 24 Cal.4th at p. 122 .) “We review a trial court’s order declining to sever the unconscionable provisions from an arbitration agreement for abuse of discretion. [Citation.] ‘All exercises of discretion must be guided by applicable legal principles, however, which are
derived from the statute under which discretion is conferred.15

[Citations.] If the court’s decision is influenced by an erroneous understanding of applicable law or reflects an u nawareness of the full scope of its discretion, the court has not properly exercised its discretion under the law. [Citation.] Therefore, a discretionary order based on an application of improper criteria or incorrect legal assumptions is not an exercise of informed discretion and is subject to reversal.’ ” ( Lange v. Monster Energy Co. (2020)
46 Cal.App.5th 436, 453 ( Lange ) .) “The overarching inquiry is whether ‘ “ the interests of justice

. . . would be furthered” ’ by severance.” ( Armendariz

, supra , 24 Cal.4th at pp. 123

– 124.) An agreement may be “permeated with too high a degree of unconscionability for
severance to rehabilitate.” ( Lange

, supra , 46 Cal.App.5th at

p. 455.) While there is no per se rule that more than one substantively uncons cionable provision will result in an agreement that is permeated by unconscionability ( id

. at pp. 452

– 455), “ ‘ “[a]n employment arbitration agreement can be considered permeated by unconscionability if it ‘contains more than one unlawful provision’ ” ’ ” ( Carbajal

, supra , 245 Cal.App.4th at p. 254 , original italics )

. “ If the central purpose of the contract is tainted with illegality, then the contract as a
whole cannot be enforced. If the illegality is collateral to the main purpose of the contract, and the illegal provision can be extirpated from the contract by means of severance or restriction, then such severance and restriction are appropriate. ” ( Armendariz

, supra , 24 Cal.4th at p. 124 .) Here, we find the trial court did not abuse its discretion in
de clining to sever the offending provisions. As the trial court correctly acknowledged, an employment arbitration agreement with more than one unconscionable provision is disfavored and16

“ ‘ “can be con sidered permeated by unconscionability if it ‘contains more than one unlawful provision

. ’ ” ’ ” ( Carbajal

, supra , 245 Cal.App.4th at p. 254.) Moreover, we find the two offending clauses are central to the agreement and not merely collateral parts to the bargain. Without any reasonable justification, the two offending clauses effectively impose
arbitration on Plaintiffs while allowing CCFS to bring its claims
in court , and severely impair Plaintiffs ’ ability to investigate
their claims. In addition, the exclusions clause also included an illegal provision, which made this offending clause even more problematic. Lastly, we do not believe that the interests of justice would be served by severance here. As the court in Fitz reasoned, to
allow arbitration here would permit the employer to benefit from the unconscionable agreement it imposed on its employees. ( Fitz

, supra , 118 Cal.App.4th at p. 727.) “An employer will not be deterred from routinely inserting such a deliberately illegal
clause into the arbitration agreements it mandates for its employees if it knows that the worst penalty for such illegality is the severance of the clause after the employee has litigated the matter. In that sense, the enforcement of a form arbitration agreement containi ng such a clause drafted in bad faith would be condoning, or at least not discouraging, an illegal scheme, and
severance would be disfavored unless it were for some other reason in the interests of justice.” ( Armendariz

, supra , 24 Cal.4th at pp. 124

– 125, fn. 13.)17 DISPOSITION
The order denying Appellant ’s motion to compel arbitration
is affirmed. Respondents to recover costs on appeal.

VIRAMONT ES, J.

I CONCUR:

STRATTON, P. J.1

GRIMES, J., Dissenting.

Respectfully, I dissent and would reverse the order denying defendant’s motion to compel arbitration of two plaintiffs’
individual claims under the Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.). I agree with the majority that the arbitration agreement has a low degree of procedural unconscionability. In my view, the arbitration agreement also has a low degree of substan tive unconscionability. In the context of this individual PAGA action, the arbitration confidentiality clause does not have any adverse consequences that might otherwise be found in an employment action for discrimination,
harassment or retaliation. The exclusion from arbitration of claims involving noncompetition or confidentiality agreements likewise has little or no relevance in the context of the PAGA claims in this case. The contract is not permeated by an unlawful purpose, and the clauses plaintiff s challenge may be excised without any need to augment the agreement with additional terms. Consequently, I conclude the trial court abused its discretion when it refused to grant the motion to compel
arbitration.
1. Substantive Unconscionability

“ Because the degree of procedural unconscionability is minimal, the agreement is unenforceable only if the degree of substantive unconscionability is high. ” ( Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 98 2.) I find the two challenged
clauses in the arbitration agreement, in the circumstances of this case, exhibit a low degree of substantive unconscionability.

a. The exclusions clause The arbitration agreement contains a clause excluding from
arbitration claims brought “to enforce any non

- competition or2

confidentiality agreement which may exist between the parties.” The majority finds the agreement lacked mutuality because the excluded claims are more likely to be brought by the employer, while requiring the employee to arbitrate all her claims.
Howe ver, here, the only claims in the case are individual PAGA claims. None of the parties has alleged any claim or defense that implicates either the noncompetition or the confidentiality clause.
There is no noncompete or confidentiality agreement in plaint iff Sara Mitchum’s contract with defendant, and hence no potential claims for defendant to enforce against her. The trial

court ignored this reality, finding it was “at least possible” that defendant could have required Ms. Mitchum to sign such an

agreeme nt “if she had advanced in the company.” Nothing in the record supports that speculative conclusion. The exclusions clause is simply irrelevant to the arbitration of Ms. Mitchum’s
claim. I do not see the exclusions clause as so unfair in plaintiff
Lisa F redeen’s case as to justify withholding enforcement of the arbitration agreement. (See OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125

- 126 ( OTO ) [“ ‘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.’ ”].) Here, the arbitration agreement is not wholly nonmutual. Defendant is obligated to arbitrate all disputes except those concerning the noncompetition and confidentiality agreement in Ms. Fredeen’s contract. In this case, after years of litigation, there is no indication that either defendant or plaintiffs ever will assert any claims involving the Fredeen noncompete and confidentiality agreement. I am aware that unconscionability is assessed at the time the agreement is made,3

but I see no reason to ignore the fact that the Fredeen noncompete and confidentiality exclusions that create the lack of complete mutuality have only slight, at best, relevance in the
context of her individual P AGA claim

— and none whatever in the context of Mitchum’s claims. The lack of mutuality in this case does not in my view show a high level of substantive unconscionability, but rather a
low level. Plaintiffs rely on cases involving arbitration agreements much different than this case, and involving claims much
different than individual PAGA claims. In Swain v. LaserAway Medical Group, Inc. (2020) 57 Cal.App.5th 59

, the agreement permitted the defendant to bring its claims for unpaid patient fees in court, while requiring the plaintiff to arbitrate her claims about the defendant’s services. ( Id. at p. 72.) The agreement “had additional indicia of substantive unconscionability,” including “highly unconscionable” fee

- splitting provisions with a requirement for “the most expensive kind of arbitration: one
with a three

- arbitrator panel,” with costs that “would effectively prohibit” the plaintiff from seeking relief. ( Id. at pp. 73, 74.) And, there was a provision prohibiting the plaintiff from seeking publi c injunctive relief that the defendant conceded was unconscionable. ( Id. at pp. 65, 75.) These three provisions “ were

‘ “ sufficiently unfair ” ’ to ‘ “ withhold enforcement ” ’ of the agreement. ” ( Swain, at p. 75, quoting OTO, supra , 8 Cal.5th at

p

. 126.) Similarly, in Davis v. Kozak (2020) 53 Cal.App.5th 897 ( Davis ), an age and sex harassment case, the court found “a ‘high’ degree of substantive unconscionability” in the combination of a nonmutual confidentiality provision and restrictive discovery4

requirements. ( Id. at p. 917.) The court identified “ a restrictive arbitral discovery process that appears inadequate to protect
vindication of [the plaintiff’s] statutory rights, plus an unjustified, nonmutual provision that exempt s [the employer’s] most likely claims against employees from arbitration and allows it to pursue such claims in court with full discovery, trial, and appeal rights. Because these unconscionable provisions together
indicate [the employer’s] self

- interested effort to impose an inferior forum on its employees, the trial court was within its discretion to conclude the agreement was permeated by unconscionability and should not be enforced. ” ( Id. at p. 918 .) Again, the provisions challenged here simply do not reflect a similar “self

- interested effort to impose an inferior forum” ( Davis, supra, 53 Cal.App.5th at p. 918) on plaintiffs. 1

1 Other cases plaintiffs cite involve arbitration agreements with numerous advantages for employer claims and limitations on the plaintiff’s significant rights, unlike the arbitration agreement in this case

. (See Ramirez v. Charter Communications, Inc. (2022) 75 Cal.App.5th 365, 371, 383, review granted June 1, 2022, S273802 [ “a high degree of substantive unconscionability” based on “the restriction of the statute of limitations for FEHA claims, the provision granting an award of attorney fees for a prevailing party in compelling arbitration, the lack of mutuality [excluding mu ltiple types of claims more likely to be brought by the employer], and the limitation on discovery” ]; Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227 , 234, 253 [ provisions allowing the defendant to obtain injunctive relief in court while requiring the p laintiff to seek relief through arbitration

, waiving the statutory requirement that the defendant post a bond or undertaking to obtain injunctive relief

, and “effectively waiv[ing] [the plaintiff’s] statutory right to recover her attorney fees if she preva il[ed] on5 b. The arbitration confidentiality clause I also find the provision requiring the parties to keep arbitration proceedings and their outcomes “strictly confidential” is at most marginally unconscionable in the context of these
individual PAGA claims. The prevailing view has been that arbitration confidentiality clauses are not unconscionable. In Sanchez v. CarMax Auto Superstores California, LLC (2014)

224 Cal.App.4 th 398 , a wrongful termination case, t he court

her Labor Code claims” presented “a moderate level of substantive unconscionability,” making the arbitration provision unenforceable when combined with a moderate level of procedural unconscionability]; Samaniego v. Empire Today, LLC (2012) 205 C al.App.4th 1138, 1147

- 1148 [provision shortening limitations period undermined statutory protections, and was “just one of several one

- sided provisions,” including requirement that the plaintiffs pay the defendant’s attorney fees with no reciprocal obligat ion on the defendant, and “[i]n addition,” an exemption for claims typically brought by employers]; F itz v. NCR Corp. (2004) 118 Cal.App.4th 702, 719, 725 [in addition to exempting disputes regarding noncompete agreements and intellectual property rights, the agreement’s limitations on discovery ran afoul of the minimum standards imposed by Armendariz “and fail to ensure that [the plaintiff] is entitled to discovery sufficient to adequately arbitrate her claims”]; O’Hare v. Municipal Resource Consultants (2 003) 107 Cal.App.4th 267, 282 [written employment contract “lacks any modicum of bilaterality ” because the employer “ has expressly reserved any and all rights to file a lawsuit against [the plaintiff] regardless of the theory of liability or relief request ed ”; the agreement also improperly require d the plaintiff to share costs and “ its facial prohibition of discovery is in derogation of law”] .)6

described the provision as requiring “that the arbitration (including the hearing and record of the proceeding) be confidential and not open to the public unless the partie s agree otherwise, or as appropriate in any subsequent proceeding between the parties, or as otherwise may be appropriate in response to governmental or legal process.” ( Id. at p. 408.) The
court held: “The

. . . provision requiring confidentiality is not unconscionable. In regard to ‘the fairness or desirability of a secrecy provision with respect to the parties themselves,

. . . we see nothing unreasonable or prejudicial about it,’ and it is not substantively u nconscionable

. ” ( Sanchez, at p. 408
, quoting Woodside Homes of California, Inc. v. Superior Court (2003)
107 Cal.App.4th 723, 732 ; see also Chin v. Advanced Fresh Concepts Franchise Corp. (2011) 194 Cal.App.4 th 704 , 714 [ finding no colorable claim of unco nscionability in the arbitration confidentiality provision of a franchise agreement].) The majority cites Ramos v. Superior Court (2018)
28 Cal.App.5th 1042 ( Ramos ), and Hasty v. American Automobile
Assn. (2023) 98 Cal.App.5th 1041 ( Hasty ) , where the cour ts found arbitration confidentiality clauses were substantively unconscionable in the context of a complaint for discrimination, harassment, and retaliation

— not an individual PAGA claim. I do not find the rationale of those cases applies to this case whic h involves only individual PAGA claims, and I find no basis to extend the holdings of those cases to plaintiffs’ individual PAGA
claims.
Ramos reasoned that informal discovery was critical to prepare a case for discrimination, harassment or retaliation. T he confidentiality provision would hamper the plaintiffs’ ability to prove a pattern of discrimination, prevent them from taking7

advantage of findings in past arbitrations, prevent them from informally contacting or interviewing witnesses outside the
forma l discovery process, and significantly increase the costs of discovery, thereby discouraging the vindication of plaintiffs’ statutory rights. ( Ramos, supra, 28 Cal.App.5th at pp. 1066

- 1067.) The holding in Hasty was also limited to harassment,
retaliation and discrimination claims. Hasty concluded the confidentiality clause in that case “benefits only [the defendant] with respect to harassment, retaliation, and discrimination claims, such as the claims here, and is thus substantively unconscionable.” ( Ha sty, supra, 98 Cal.App.5th at p. 1062.) Hasty in turn relied on Murrey v. Superior Court (2023)
87 Cal.App.5th 1223, a sexual harassment case that stated
Sanchez (which found no unconscionability in a confidentiality clause) was not persuasive “in the con text of a workplace sexual harassment complaint.” ( Murrey, at p. 1254.) Murrey agreed with a sister state case finding a confidentiality provision

“ ‘ “serves no purpose other than to tilt the scales of justice in favor of the employer by denying access to any information about other claims against the employer to other potential victims of discrimination.” ’ ” ( Ibid. ) But no discovery from third party witnesses is necessary to prepare these individual PAGA claims for arbitration. Plaintiffs allege f ailure to provide meal periods and rest breaks; failure to pay meal and rest break premiums; failure to provide accurate itemized wage statements; and failure to reimburse personal cell phone expenses . These individual PAGA claims implicate only
defendant ’s wage and hour compliance records and practices and plaintiffs’ own personnel records. Certainly, if plaintiffs prevail8

on their individual claims and pursue their representative claims in court, then the scope of discovery will expand to include other employees. This appeal concerns only the arbitration of plaintiffs’ individual PAGA claims. Plaintiffs quote liberally from Ramos but offer no explanation how the confidentiality clause might increase their discovery costs in the arbitration, or impede th eir access to the sorts of information necessary to arbitrate their individual PAGA claims, or thwart the vindication of their statutory rights. Ramos, Murrey and Hasty involve different and broader confidentiality clauses and many other unconscionability issues not raised in this case. Plaintiffs offer no analysis or practical considerations to support an extension of the reasoning of Ramos
and Hasty to these individual PAGA claims, where confidentiality is not likely to have any impact on prearbitration discovery or the
conduct of the arbitration.
2. Severance Since I find a low level of procedural unconscionability, as well as a low degree of substantive unconscionability in the only two provisions that are challenged in this case, I find the trial

cour t could have and should have severed the two clauses and
sent the PAGA claims to arbitration.

“ In the context of severing unconscionable provisions from an arbitration agreement, ‘ the strong legislative and judicial preference is to sever the offending ter m and enforce the balance of the agreement . . . .’ ” ( Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482, 495 .) “[T] he statute appears to give a trial
court some discretion as to whether to sever or restrict the unconscionable provision or whether t o refuse to enforce the entire agreement . But it also appears to contemplate the latter9

course only when an agreement is ‘ permeated ’ by unconscionability. ” (

Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 122 ( Armendariz ).) One reason for severing terms is “ to prevent parties from gaining undeserved benefit or suffering undeserved detriment as a result of voiding the entire agreement . . . .” ( Armendariz,

supra, 24 Cal.4th at p. 123 .) T he “overarching” question is whether severance serves the interests of justice. ( Id. at p. 124 .)
Armendariz instructs: “ Courts are to look to the various purposes
of the contract. If the central purpose of the contract is tainted with illegality, then the contract as a whole canno t be enforced. If the illegality is collateral to the main purpose of the contract, and the illegal provision can be extirpated from the contract by means of severance or restriction, then such severance and restriction are appropriate. ” ( Ibid. ) Here, th e trial court refused to sever the two provisions, stating: “[

Armendariz ] held that when an arbitration agreement
is non

- mutual, the court cannot cure the problem simply by striking unconscionable terms. Rather, the court would have to
reform the contrac t, which the court cannot do.” The trial court added that “severance is disfavored where, as here, the arbitration agreement contains more than one unconscionable
term.” The trial court apparently construed Armendariz as supporting a refusal to sever unc onscionable terms whenever there is a lack of complete mutuality in an arbitration clause.
But that is not what Armendariz said. The court was addressing the “unconscionably unilateral arbitration clause” in the case
before it when it stated that “ the co urt would have to, in effect, reform the contract, not through severance or restriction, but by10

augmenting it with additional terms. ” ( Armendariz, supra,
24 Cal.4th at pp. 124

- 125.) This was because, in Armendariz

, there was no single clause that could b e severed; the agreement to arbitrate applied only to the employee’s claim of wrongful termination ( id. at pp. 91

- 92). The court would have had to “augment[] [the agreement] with additional terms. ” ( Id. at

p. 125.)
That is not the case here. The exclu sions and arbitration confidentiality clauses “ can be extirpated from the contract by
means of severance or restriction ” ( Armendariz, supra, 24 Cal.4th at p. 124), with no need to add additional terms. Nor do those clauses justify a conclusion that the “ c entral purpose of the contract is tainted with illegality, ” so that “ the contract as a
whole cannot be enforced. ” ( Ibid .) On the contrary, the clauses are clearly “ collateral to the main purpose of the contract ” ( ibid. ) and just as clearly can be excised with no effect on the remainder
of the contract. In some cases, “multiple defects” indicate a systematic effort to impose arbitration on an employee “as an inferior forum that works to the employer’s advantage.” ( Armendariz, supra,
24 Cal.4th at p. 124.) I do not see that here, where the Fredeen noncompete agreement has no application to a PAGA claim and defendant acknowledges it is unenforceable in any event. (There was no noncompete agreement or confidentiality agreement in
Mitchum’s contract. ) And the authorities are clear that the presence of more than one objectionable term does not preclude severance; it is only one of the relevant factors in the trial court’s severability inquiry. (See, e.g., Lange v. Monster Energy Co. (2020) 46 Cal.App .5th 436, 455 ( Lange ).)11 Lange agreed with a Ninth Circuit case stating the point this way: “ ‘In each case’ regarding severance . . . ‘the dispositive question is whether “the central purpose of the contract” is so tainted with illegality that there is no lawful object of the contract to enforce.’ ” ( Lange, supra, 46 Cal.App.5th at p. 455, quoting Poublon v. C.H. Robinson Co. (9th Cir. 2017) 846 F.3d 1251, 1273.) In Poublon, the court limited one unenforceable provision, and severed another provision “th at permits [the defendant], but not [the plaintiff], to seek judicial resolution of specified claims”; the court stated the provision could be extirpated without affecting the remainder of the clause “and is ‘collateral to the main purpose of the contract, ’ which is to require arbitration of disputes.” ( Poublon, at p. 1273.) The same is true
here.

GRIMES, J.