1

Filed 6/11/24 Fredeen v. California Cemetery 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 APPELLATE DISTRICT

DIVISION EIGHT

LISA FREDEEN et al.,

Plaintiffs and Respondents,

v.

CALIFORNIA CEMETERY AND 

FUNERAL SERVICES, LLC,

Defendant and Appellant.

 B326031

 (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 Appellant.

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 unenforceable. 

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 also 

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 reasons stated below, we affirm. 

BACKGROUND

I. Plaintiffs’ employment with CCFS and the

arbitration agreements

Plaintiffs and Respondents Lisa Fredeen and Sarah 

Mitchum are CCFS’s former employees. Fredeen worked for 

CCFS as a preplanning advisor from 2012 until mid-2017. 

Mitchum worked for CCFS as a family services counselor rookie 

from approximately November of 2017 to February of 2018. 

During Fredeen’s first week of employment, she attended

onboarding training with other preplanning advisors. 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 signed an employment agreement with 

noncompetition 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 signed. 

She believed she would be unable to progress with the online 

training if she did not sign each document. Mitchum 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 all 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 2802.

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 pressure 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 Plaintiffs to consult with an attorney or 

otherwise take time to review the documents. 

The trial court also found that the agreement was

substantively unconscionable. It 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 them

from conducting informal discovery through interviews to develop 

evidence, and could discourage other employees from pursuing 

potential claims. 
5

In denying CCFS’s motion, the trial court found the 

agreement’s lack of mutuality would require it to reform the 

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 declined 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 408, 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.” (Avila v. Southern California Specialty 

Care, Inc. (2018) 20 Cal.App.5th 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, 114 
6

(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 limit 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 procedural 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 

substantively 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 unfairness 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 contract 
7

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 unconscionability

“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 typically 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. [Citations.]

‘ “ ‘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 contract; 

(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 observed 
8

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 

necessary 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 oppression 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, 

additional 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 not 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 without giving them additional 

time to review the agreement (Murrey v. Superior Court (2023) 

87 Cal.App.5th 1223, 1238 (Murrey)). 

Given these circumstances, we find at least a low level of

procedural unconscionability.
9

III. Substantive unconscionability

“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” ’ ” [citation], 

“ ‘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 simple oldfashioned 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 public 

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-sided.” 

(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 pp. 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, 24 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

(Baltazar)), 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 decisions

cited by CCFS address the 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. Management 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-CV05153-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 noncompete 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, an 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 Community 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 proceedings, 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 Associate 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 recognized 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; see 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. Essentially, 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 it 
13

allows CCFS to disclose the arbitration to virtually 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 when 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 strict 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 lessened 

to the extent it allows Plaintiffs to disclose certain information to 

the extent required by law. First, the 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, the 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 proceedings 
14

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 discovery. 

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. The law is clear that we determine unconscionability at the 

time 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 agreement 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 unconscionability, 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 unawareness 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 unconscionable 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 

declining to sever the offending provisions. As the trial court 

correctly acknowledged, an employment arbitration agreement 

with more than one unconscionable provision is disfavored and 
16

“ ‘ “can be considered 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 containing 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.

VIRAMONTES, 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 substantive 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 plaintiffs 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, 982.) 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 or 
2

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. 

However, 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 

plaintiff 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 

agreement “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 Fredeen’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 PAGA 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 

public 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 discovery 
4

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 exempts [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 multiple 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 plaintiff 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 prevail[ed] on 
5

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.4th 398, a wrongful termination case, the 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 Cal.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 obligation on the defendant, and “[i]n addition,” an 

exemption for claims typically brought by employers]; Fitz 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 (2003) 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 requested”; the agreement also 

improperly required 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 parties 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 unconscionable.” (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.4th 704, 714 

[finding no colorable claim of unconscionability 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 courts 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 which 

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. The 

confidentiality provision would hamper the plaintiffs’ ability to 

prove a pattern of discrimination, prevent them from taking 
7

advantage of findings in past arbitrations, prevent them from 

informally contacting or interviewing witnesses outside the 

formal 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.” (Hasty, 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 context 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 failure 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 prevail 
8

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 their 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 

court 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 term 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 to refuse to enforce the 

entire agreement. But it also appears to contemplate the latter 
9

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.) The “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 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.” (Ibid.)

Here, the 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 contract, 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 unconscionable 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 court would have to, in effect, 

reform the contract, not through severance or restriction, but by 
10

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 be 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 exclusions 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 “central 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 “that 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.