Filed 3/12/24 Monroy v. Donsuemor, Inc. CA1/2

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

RIGOBERTO MONROY,

Plaintiff and Respondent,

v.

DONSUEMOR, INC.,

Defendant and Appellant.

 A167487

 (Alameda County

 Super. Ct. No. 22CV011917)

Rigoberto Monroy filed a lawsuit alleging individual and class claims 

against his former employer Donsuemor, Inc. Donsuemor appeals from an 

order denying its motion to compel arbitration on the ground that the parties’ 

arbitration agreement was unconscionable. It contends the trial court erred 

by finding the agreement was adhesive, and even if it was adhesive, there 

was minimal procedural unconscionability, at most, so a high degree of 

substantive unconscionability was required to find the agreement 

unenforceable. Donsuemor urges there was no such high substantive 

unconscionability here, and the trial court should have severed one term if 

necessary and enforced the agreement.

We agree with the trial court that the agreement was both procedurally 

and substantively unconscionable. We further conclude the trial court did 

not abuse its discretion by declining to sever the substantively 

unconscionable terms.
2

BACKGROUND

I.

The Parties and the Arbitration Agreement1

Donsuemor is an industrial baking company. Monroy worked for 

Donsuemor in Alameda, California for twenty years, from June 2000 until he 

was terminated in February 2020. Donsuemor hired Monroy as a nonexempt employee on the production line. In 2004, he became a shift manager 

on the swing shift.

The following year, a worker named Araceli Ramirez presented Monroy 

with a Spanish-language version of a document entitled “Mutual Agreement 

to Arbitrate Claims.” Ramirez told Monroy that if he failed to sign it, his 

employment would be terminated. This was consistent with Monroy’s 

general understanding throughout his employment with Donsuemor that he 

was required to sign all documents presented to him or be terminated. No 

one explained the arbitration agreement to Monroy, who was not aware of 

what he was signing. Ramirez was not part of the company’s human 

resources department; she was a worker on the production line who reported 

to Monroy. There was no opportunity for Monroy to negotiate the terms of 

the agreement or to inquire about it. 

At the time Donsuemor presented him with the agreement, Monroy had 

been working at the company for nearly five years and had come to rely on 

1 Because we apply substantial evidence review to the trial court’s 

factual findings, we state the facts in the light most favorable to Monroy, who 

prevailed in the trial court, and to the extent there is any factual dispute, we 

“ ‘presume the court found every fact and drew every permissible inference 

necessary to support its judgment.’ ” (Carlson v. Home Team Pest Defense, 

Inc. (2014) 239 Cal.App.4th 619, 630.)
3

the benefits of his employment. The loss of his job would have “created major 

disruptions, including an abrupt income reduction.” 

II.

The Proceedings Below

In May 2022, Monroy sued Donsuemor in Alameda County Superior 

Court. He alleged that he experienced discriminatory and harassing 

treatment at work due to his disability and medical condition. In response to 

his complaints, Donsuemor terminated his employment. Monroy further 

alleged that Donsuemor committed wage and hour violations against him and 

a putative class of other employees. Based on these allegations, he asserted 

individual claims for retaliation (Lab. Code, §§ 1102.5, 6310; Gov. Code,

§ 12900, et seq.), wrongful termination in violation of public policy and 

disability discrimination (Gov. Code, § 12940, et seq.), as well as putative 

class claims for unlawful business practices (Bus. & Prof. Code, § 17200, et 

seq.) and Labor Code violations.

Donsuemor filed a motion to compel arbitration. It argued that the 

parties executed a valid agreement to arbitrate that encompassed Monroy’s 

claims. Opposing the motion, Monroy argued that the agreement was 

procedurally and substantively unconscionable. He provided a declaration 

recounting the circumstances surrounding his execution of the agreement as 

described above. On reply, Donsuemor submitted a declaration by its Chief 

Executive Officer, who stated Donsuemor did not condition employment on 

signing the agreement. However, it admitted that it tried to encourage all 

employees to sign it and all but two percent of them did. Moreover, none of 

Donsuemor’s declarations denied that Ramirez told Donsuemor he had to 

sign the agreement or he would lose his job.
4

In its written order, the trial court found the agreement was 

“procedurally unconscionable as a contract of adhesion.” The court also found 

the agreement was substantively unconscionable due to its carve-out for 

injunctive relief most likely to be sought by Donsuemor and its provision

entitling the party prevailing on a motion to compel arbitration (again most 

likely Donsuemor) to recover costs and attorney fees. The court stated it 

“would be inclined to strike” the latter provision, but “there remain[s] the 

other unconscionable provision” and the court did not find severance would 

further the interests of justice. Accordingly, the court “decline[d] to sever the 

unconscionable provisions” and denied Donsuemor’s motion to compel 

arbitration.2 

Donsuemor timely appealed. 

DISCUSSION

I.

Governing Legal Principles

“The party seeking arbitration bears the burden of proving the 

existence of an arbitration agreement, and the party opposing arbitration 

bears the burden of proving any defense, such as unconscionability.” 

(Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC

(2012) 55 Cal.4th 223, 236.) Since there is no dispute the parties formed an 

arbitration agreement here, we focus on the defense Monroy raises to its 

enforcement—that the agreement is unconscionable.

Unconscionability has both a procedural and a substantive element. 

(OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125 (Kho).) The procedural 

2 Donseumor filed separate motions to dismiss Monroy’s class claims 

and to stay Monroy’s individual claims pending arbitration. The court denied 

these motions as moot in light of its ruling on the motion to compel 

arbitration. 
5

element addresses the circumstances of contract negotiation and formation, 

focusing on oppression or surprise due to unequal bargaining power. (Ibid.) 

Substantive unconscionability pertains to the fairness of an agreement’s 

terms and whether they are overly harsh or one-sided. (Ibid.) Both must be 

shown for the defense to be established, but they need not be present in the 

same degree. (Ibid.) Instead, they are evaluated on a sliding scale: the more 

substantively oppressive the contract term, the less evidence of procedural 

unconscionability is required to find it unenforceable, while the more 

deceptive or coercive the bargaining tactics employed, the less substantive 

unfairness is required. (Id. at pp. 125-126.) The ultimate issue in every case 

is whether the terms of the contract are so unfair, in view of all relevant 

circumstances, that a court should withhold enforcement. (Id. at p. 126.) 

“Because unconscionability is a contract defense, the party asserting the 

defense bears the burden of proof.” (Chen v. PayPal, Inc. (2021) 

61 Cal.App.5th 559, 579.)

As our colleagues in Division Three recently explained, “In assessing 

substantive unconscionability, we look to the terms of the parties’ agreement 

to ‘ensure[ ] 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.] These formulations ‘all mean 

the same thing.’ [Citation.] Substantive unconscionability ‘ “is concerned not 

with ‘a simple old-fashioned bad bargain’ [citation], but with terms that are 

‘unreasonably favorable to the more powerful party.’ ” ’ [Citation.] ‘[T]he 

paramount consideration in assessing [substantive] conscionability is 

mutuality.’ [Citation.] ‘Agreements to arbitrate must contain at least “ ‘a 

modicum of bilaterality’ ” to avoid unconscionability.’ [Citation.]” (Davis v. 
6

Kozak (2020) 53 Cal.App.5th 897, 910.) “In making this determination, 

courts often look to whether the agreement meets a minimum level of 

fairness based on the factors set forth in Armendariz.” (Ibid.) 

In Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 

24 Cal.4th 83 (Armendariz), our high court adopted certain minimum 

requirements that must be met when an arbitration agreement impairs the 

exercise of unwaivable statutory rights enacted for a public purpose. (Id. at 

pp. 99-101 [“an arbitration agreement cannot be made to serve as a vehicle 

for the waiver of” such rights].) Armendariz imposed minimum requirements 

on “employer-mandated arbitration clauses covering claims by employees 

based on statutory and constitutional provisions,” including the California 

Fair Employment and Housing Act (FEHA). (Boghos v. Certain Underwriters 

at Lloyd’s of London (2005) 36 Cal.4th 495, 506 (Boghos).) “To ensure that 

employer-mandated arbitration agreements would not become vehicles for 

the waiver of FEHA rights,” the Armendariz court held “such agreements are 

enforceable only if they provide for [1] neutral arbitrators, [2] more than 

minimal discovery, [3] a written award, and [4] all of the types of relief that 

would otherwise be available in court and, in addition, [5] ‘ “do[ ] not require 

employees to pay either unreasonable costs or any arbitrators’ fees or 

expenses as a condition of access to the arbitration forum.” ’ ” (Boghos, at 

p. 506, italics omitted.)

On review of a decision granting or denying a motion to compel 

arbitration, “[W]e review the trial court’s findings of disputed fact for 

substantial evidence; we review its finding of unconscionability based on 

those facts de novo.” (Gostev v. Skillz Platform, Inc. (2023) 88 Cal.App.5th 

1035, 1047 (Gostev).) If material facts are in dispute, we presume the court 

found every fact and drew every permissible inference necessary to support 
7

its judgment. (Carlson v. Home Team Pest Defense, Inc., supra,

239 Cal.App.4th at p. 630.)

II.

Procedural Unconscionability

“ ‘[T]here are degrees of procedural unconscionability. At one end of 

the spectrum are contracts that have been freely negotiated by roughly equal 

parties, in which there is no procedural unconscionability. . . . Contracts of 

adhesion that involve surprise or other sharp practices lie on the other end of 

the spectrum. [Citation.] Ordinary contracts of adhesion, although they are 

indispensable facts of modern life that are generally enforced [citation], 

contain a degree of procedural unconscionability even without any notable 

surprises and “bear within them the clear danger of oppression and 

overreaching.” ’ . . . [C]ourts must be ‘particularly attuned’ to this danger in 

the employment setting, where ‘economic pressure exerted by employers on

all but the most sought-after employees may be particularly acute.’ ” 

(Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244 (Baltazar).) 

Here, the trial court concluded the arbitration agreement was “a 

contract of adhesion,” which it defined as “a standardized contract presented 

on a ‘take it or leave it’ basis with no opportunity to negotiate the terms and 

conditions.” This finding is supported by substantial evidence. In his 

declaration, Monroy stated he was told his employment would be terminated 

if he did not sign the agreement, which was consistent with his general 

understanding of Donsuemor’s practice regarding such documents. The 

agreement was presented to Monroy by a production line worker at his 

workplace, who told him he had to sign it or he would lose his job. There was 

no opportunity to negotiate. This was a classic “take it or leave it” contract of 

adhesion. 
8

But assuming a contract is one of adhesion, as “[a]rbitration contracts 

imposed as a condition of employment” “typically” are, the “pertinent 

question” then becomes “whether circumstances of the contract’s formation 

created such oppression or surprise that closer scrutiny of its overall fairness 

is required.” (Kho, supra, 8 Cal.5th at p. 126.) “ ‘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.’ ” (Id. at p. 127.) All those factors support a showing of significant 

oppression here. 

Monroy was primarily a Spanish speaker and could not read English 

well, which we infer from the fact that the company provided him a Spanishlanguage version of the arbitration agreement. Even so, Monroy had a 

limited education, and the agreement was presented by a low-level employee 

who was not in a position to explain it to him. The company made no effort to 

explain what he was signing or its implications. He signed it without 

understanding it. The signed agreement was placed in his personnel file, and 

there is no indication he was given a copy. He had no prior experience with 

legal matters. Further, he was required to sign the agreement after he had 

been working for the company for almost five years on pain of losing a job he 

had come to rely on. 

As our high court has observed, “ ‘[t]he 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 
9

necessary employment, and few employees are in a position to refuse a job 

because of an arbitration requirement.’ (Armendariz, supra, 24 Cal.4th at 

p. 115.) This economic pressure can also be substantial when employees are 

required to accept an arbitration agreement in order to keep their job. 

Employees who have worked in a job for a substantial length of time have 

likely come to rely on the benefits of employment. For many, the sudden loss 

of a job may create major disruptions, including abrupt income reduction and 

an unplanned reentry into the job market. In both prehiring and posthiring 

settings, courts must be ‘particularly attuned’ to the danger of oppression and 

overreaching.” (Kho, supra, 8 Cal.5th at p. 127.) In Fitz v. NCR Corp. (2004) 

118 Cal.App.4th 702, 722 (Fitz), the court found “a high degree of 

oppressiveness” where an employee was given no opportunity to negotiate the 

terms of an arbitration policy made as a condition of continued employment. 

Division Three of this district reached the same conclusion in Baxter v. 

Genworth North America Corp. (2017) 16 Cal.App.5th 713, 724.) 

The circumstances in which Monroy signed the arbitration clause here 

were very similar to those in Kho, in which our Supreme Court concluded 

“the arbitration agreement’s execution involved an ‘extraordinarily high’ 

degree of procedural unconscionability.” (Kho, supra, 8 Cal.5th at p. 126; see 

also id. at pp. 127-128 [agreement presented in workspace; neither contents 

nor significance was explained; Kho was told he was required to sign 

agreement to keep the job he had held for three years; company selected lowlevel employee to present agreement, creating impression no request for 

explanation was expected and any request would be unavailing and 

negotiation efforts would be futile].) 

Also as in Kho, the facts here support a finding of surprise. (See Kho, 

supra, 8 Cal.5th at p. 126 [surprise where unconscionable provision is hidden 
10

within a prolix printed form].) In Kho, the agreement was slightly more than 

a page long but written in an extremely small font. (Id. at p. 128.) The 

substance was “similarly opaque” with “sentences [that were] complex, filled 

with statutory references and legal jargon.” (Ibid.) 

Here, the font was not extremely small, but the agreement was three 

single-spaced pages long, referred to many different California and federal 

codes and statutes.

3 It contained significant legal jargon, such as “claims 

3 For example, the first section of the agreement included a 12-line 

sentence listing the claims it covered, including “claims arising out of 

contract law, tort law, common law, wrongful discharge law, privacy rights, 

statutory protections, constitutional protections, wage and hour law, 

California Labor Code protections, the California Fair Employment and 

Housing Act (which includes claims for discrimination or harassment on the 

basis of age, race, color, ancestry, national origin, disability, medical 

condition, marital status, religious creed, sex, pregnancy, and sexual 

orientation), any similar state discrimination law, the California Family 

Rights Act, the federal Family and Medical Leave Act, the federal Civil 

Rights Act of 1964 and 1991, as amended, the Age Discrimination in 

Employment Act, the Older Workers’ Benefit Protection Act, the Americans 

with Disabilities Act, claims for benefits (except where a benefit or pension 

plan specifies that its claims procedures shall culminate in an arbitration 

procedure different from this one) and claims for violation of any federal, 

state, or other governmental law, statute, regulation, or ordinance.” 

The second section excluded injunctive relief claims, including those in 

which the employee is “exposed to certain confidential information owned, 

controlled, or in the care of Employer,” exposure of which “[t]he parties 

acknowledge” “would cause irreparable harm to Employer and third parties 

(e.g., customers).” The same section excluded from arbitration more broadly

unspecified “situations where claims of either party may cause irreparable 

harm if such claims were subject to this Agreement.” 

Section three of the agreement states, in relevant part, that “[e]xcept as 

otherwise provided in paragraph one, arbitration shall be in accordance with 

the then current National Rules for Resolution of Employment Disputes of 

the American Arbitration Association (the ‘Rules’) before a single arbitrator 

who is selected in accordance with the Rules and who is licensed to practice 

law in California.” Those rules were neither provided nor attached. It also 
11

arising out of,” “claims shall culminate in,” “owned, controlled, or in the care 

of,” “irreparable harm,” “shall be in accordance with the then current [rules],” 

“void or voidable” and “advance all costs.” 

For a person with limited education, including one whose primary 

language is not English, it is difficult to imagine the specific terms and 

references of this arbitration agreement would be understandable. It may 

not be as impenetrable as the one in Kho, but for employees like Monroy and 

the production line workers Donsuemor hired, it was not designed to 

“promote[] understanding.” (Kho, supra, 8 Cal.5th at p. 129.) In our view

“[t]he document itself and the manner of its presentation did not promote 

provides, “[t]he arbitrator shall have the exclusive authority to resolve any 

dispute relating to the interpretation, applicability, enforceability or 

formation of this Agreement, including, without limitation, any Claim that 

all or any part of this Agreement is void or voidable.”

Section four states that if the employee alleges “a violation of public 

policy, or a violation of a statute relating to employment, including, without 

limitation, the California Fair Employment and Housing Act (or similar state 

statute), the 1964 and 1991 Civil Rights Act, 42 U.S.C. Section 2000e et seq., 

the Age Discrimination in Employment Act, or the Americans with 

Disabilities Act, Employer will advance all costs of the arbitration that would 

not be incurred by the parties if the dispute were litigated in court, including 

the fees of the arbitrator and any arbitration association administrative fees.” 

The agreement does not define the term “advance all costs.” Following that, 

it says “Except as set forth above, each party shall pay for its own costs, and 

attorneys’ fees, if any. However, if any party prevails in a statutory Claim 

that affords the prevailing party attorneys’ fees, the arbitrator may award 

reasonable attorney fees to the prevailing party in addition to any and all 

other remedies afforded by the relevant statute.” 

At the end of the document, in a paragraph without a heading, it states 

that “Arbitration as described above will be the exclusive forum for any 

Claims. Should the parties attempt to resolve a Claim by any method other 

than such arbitration, the prevailing party in any civil court motion to compel 

arbitration will be entitled to recover from the other party all costs and 

attorneys’ fees incurred as a result of that motion to compel.”
12

voluntary or informed agreement to its terms” by a workforce of laborers like 

Monroy. (Ibid.) For employers who have a workforce comprised primarily of 

relatively uneducated individuals, persons who do not read and understand 

English well, or both, even an agreement that might be comprehensible to an

employee with a college education will not necessarily be so for less educated 

employees or non-native-English speaking employees. In these 

circumstances, the presumption of voluntariness and mutual assent that 

undergird policies encouraging arbitration may be unjustified and 

unjustifiable. (See ibid. [where employee is induced to sign arbitration 

agreement through “ ‘sharp practices’ ” and surprise, consent rationale for 

compelling arbitration “carries less force”].)

Based on the above, we conclude there was a high degree of procedural 

unconscionability in this case. Having so decided, we next turn to the parties’ 

arguments about substantive unconscionability. Under the sliding scale 

approach, where there is a contract of adhesion but “no other indication of 

oppression or surprise, the degree of procedural unconscionability . . . is low, 

and the agreement will be enforceable unless the degree of substantive 

unconscionability is high.” (Ajamian v. CantorCO2e, L.P. (2012) 

203 Cal.App.4th 771, 796; see Davis v. Kozak, supra, 53 Cal.App.5th at 

p. 917; Baltazar, supra, 62 Cal.4th at p. 1245 [contracts that are merely 

adhesive are not subjected to same degree of scrutiny as contracts of adhesion 

that involve surprise or other sharp practices].) We must therefore

determine whether there is any substantive unconscionability and, if so,

whether the agreement is unenforceable with the high degree of procedural 

unconscionability in mind. 
13

III.

Substantive Terms

Monroy claims the arbitration agreement is substantively

unconscionable because: it (1) contains a wholesale waiver of claims under 

the Private Attorneys General Act (“PAGA,” Lab. Code, § 2698 et seq.), (2) 

carves out claims for injunctive relief, (3) fails to exclude claims under the 

National Labor Relations Act (“NLRA,” 29 U.S.C. § 151 et seq.) and claims for 

administrative remedies under California law, (4) requires employees to pay 

costs of arbitration, and (5) fails to comport with California fee-shifting 

statutes.

4 

A. Armendariz Requirements

Most of the issues Monroy raises pertain to whether the agreement 

provides adequate protection of unwaivable statutory rights under 

Armendariz. Monroy contends the arbitration agreement does not require 

the employer to pay all costs unique to arbitration, limits statutory remedies, 

and otherwise provides inadequate protection to his rights under several 

statutes. We address each of his arguments in turn.

4 Monroy raised only a subset of these issues below, and the trial court 

based its finding of unconscionability on a smaller subset. While we could 

disregard Monroy’s new arguments as waived, they raise legal questions 

determinable from uncontroverted facts and we thus exercise our discretion 

to consider them—at least insofar as they are adequately developed on 

appeal. (Farrar v. Direct Commerce, Inc. (2017) 9 Cal.App.5th 1257, 1275 & 

fn. 3.) Of course, “[w]e review the judgment, not the reasoning of the court 

below.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 

769.) Finally, Donsuemor notes that some of the issues raised by Monroy 

pertain to claims that are not included in his lawsuit. This is not material to 

our analysis. (Subcontracting Concepts (CT), LLC v. De Melo (2019) 

34 Cal.App.5th 201, 212.)
14

1. Costs Unique to Arbitration

Section 4 of the agreement provides that if the employee “alleges a 

violation of public policy, or a violation of a statute relating to employment,” 

including FEHA, “Employer will advance all costs of the arbitration that 

would not be incurred by the parties if the dispute were litigated in court, 

including the fees of the arbitrator and any arbitration association 

administrative fees.” The section states further, that “[e]xcept as set forth 

above, each party shall pay for its own costs, and attorneys’ fees, if any.” 

Monroy contends Section 4 is unconscionable for two reasons. First, he 

claims that by stating Donsuemor will “advance” costs unique to arbitration, 

the agreement requires the employee to repay these costs. The agreement is 

ambiguous on the point. The arbitration agreement says nothing about 

reimbursement or recovery of costs. If we found no substantive terms to be 

unconscionable, we would “[f]ollow[] the approach used by the Supreme Court 

in Armendariz” and interpret the provision to require that the employer must 

bear the arbitration forum costs. (Farrar v. Direct Commerce, Inc., supra, 

9 Cal.App.5th at p. 1276, citing Armendariz, supra, 24 Cal.4th at p. 113.) 

Second, Monroy contends the list of claims for which Donsuemor must

advance costs does not include all claims subject to arbitration, for example, 

claims for negligence and other torts. But the requirement that the employer 

bear costs unique to arbitration applies only to unwaivable rights “carefully 

tethered to statutory or constitutional provisions”: our Supreme Court has 

not extended the Armendariz cost-shifting rule “to common law claims 

generally.” (Boghos, supra, 36 Cal.4th at pp. 507-508.) Rather than violating 

Armendariz, the agreement complies with it by shifting costs unique to 

arbitration to the employer where the employee “alleges a violation of public 

policy, or a violation of a statute relating to employment.” 
15

2. PAGA Waiver

Monroy contends that the agreement contains an unconscionable

“wholesale waiver” of PAGA claims. The agreement, while requiring 

arbitration of all “claims arising out of . . . wage and hour law, [and] 

California Labor Code protections” requires PAGA claims to be arbitrated,

does not purport to waive PAGA claims. Monroy urges that because the 

agreement covers and “fails to carve out” PAGA claims, it “necessarily 

includes a wholesale waiver.” But Monroy cites no authority suggesting that 

an agreement to arbitrate a PAGA claim is akin to a wholesale waiver or is 

otherwise unconscionable. He relies on Viking River Cruises, Inc. v. Moriana

(2022) 596 U.S. 639, 647, which addressed an agreement “providing that in 

any arbitral proceeding, the parties could not bring any dispute as a . . .

representative PAGA action.” Viking River affirmed California law would 

invalidate such an agreement to the extent it “waiv[ed] representative 

standing to bring PAGA claims” in either “a judicial or arbitral forum”: a 

“wholesale waiver of PAGA standing.” (Id. at p. 649.) But far from declaring

arbitration of a PAGA claim unconscionable, Viking River held an agreement 

to arbitrate individual PAGA claims is enforceable if the agreement is

covered by the Federal Arbitration Act (FAA).

5 (Viking River, at p. 662; 

Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1119.) As this 

Division recently observed, Viking River “foreclose[s]” any argument that an 

agreement to arbitrate PAGA claims is substantively unconscionable. 

(Barrera v. Apple American Group LLC, supra, 95 Cal.App.5th at p. 89.)

5 The FAA applies to contracts that involve interstate commerce and 

contracts that state that it applies. (Barrera v. Apple American Group LLC

(2023) 95 Cal.App.5th 63, 76.) The parties do not contend that the FAA does 

or does not apply here, and we do not address the issue. 
16

3. Administrative Remedies

Monroy contends that the agreement fails to exclude from arbitration 

claims under the NLRA and administrative claims for unpaid wages under 

the Labor Code (Lab. Code, § 98 et seq., known as the “Berman” statutes). 

Assuming this is true, under the authority raised by Monroy, “the fact that 

arbitration supplants an administrative hearing cannot be [the sole] basis for 

finding an arbitration agreement unconscionable.” (Sonic-Calabasas A, Inc. 

v. Moreno (2013) 57 Cal.4th 1109, 1146 (Sonic II); Kho, supra, 8 Cal.5th at 

p. 130 [stressing that “the waiver of Berman procedures does not, in itself, 

render an arbitration agreement unconscionable”].) Rather, “the agreement 

must provide in exchange an accessible and affordable forum for resolving 

wage disputes.” (Kho, at p. 133, citing Sonic II.) The trial court found the 

agreement here does so, and Monroy does not engage with its reasoning. His

only argument concerning the accessibility and affordability of arbitration is 

the one about costs that we rejected above. Monroy does not otherwise

develop his administrative remedies argument in any meaningful way, and 

we will not do so for him. (Doe v. McLaughlin (2022) 83 Cal.App.5th 640, 

654.)

4. Fee-Shifting

Finally, Section 8 of the agreement provides that “[s]hould the parties 

attempt to resolve a Claim by any method other than . . . arbitration, the 

prevailing party in any civil court motion to compel arbitration will be 

entitled to recover from the other party all costs and attorneys’ fees incurred 

as a result of that motion to compel.” 

Divisions Four and Seven of the Second District have held that such 

provisions violate an employee’s rights under FEHA, which provides that “a 

prevailing defendant shall not be awarded fees and costs unless the court 
17

finds the action was frivolous, unreasonable, or groundless . . . .” (Gov. Code, 

§ 12965, subd. (c)(6)). (Patterson v. Superior Court (2021) 70 Cal.App.5th 

473, 489-490 [interpreting the provision to incorporate the FEHA standard]; 

Ramirez v. Charter Communications, Inc. (2022) 75 Cal.App.5th 365, 378, 

382 (Ramirez), review granted, June 1, 2022, S273802 [disagreeing 

with Patterson that such a provision “can be saved by impliedly incorporating 

the FEHA . . . standard into its unambiguous language”]; see also Mills v. 

Facility Solutions Group, Inc. (2022) 84 Cal.App.5th 1035, 1057-1058.) The 

trial court agreed, and so do we.

Donsuemor urges that the agreement in Ramirez contained other 

unenforceable provisions but does not otherwise disagree that this provision 

runs afoul of FEHA. Since this is a violation of Armendariz’s “minimum

requirements” (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1076), the 

provision is unconscionable.

B. Injunctive Relief Carve-Out

That brings us to the last substantive issue raised by Monroy: the 

agreement’s carve-out for injunctive relief, which he claims is unconscionably 

one-sided. Mutuality is the paramount consideration in assessing substantive 

conscionability. (Gostev, supra, 88 Cal.App.5th at p. 1056.) Agreements to 

arbitrate must contain at least a modicum of bilaterality to avoid 

unconscionability. (Ibid.) “This does not mean that parties may not choose to 

exclude particular types of claims from . . . arbitration.” (Fitz, supra, 

118 Cal.App.4th at p. 723.) And a degree of one-sidedness may be 

appropriate when supported by “some reasonable justification . . . based on 

‘business realities.’ ” (Armendariz, supra, 24 Cal.4th at p. 117.) However, an 

adhesive agreement “ ‘lacks basic fairness and mutuality if it requires one 

contracting party, but not the other, to arbitrate all claims arising out of the 
18

same transaction or occurrence or series of transactions or occurrences.’ ” 

(Fitz, at p. 723, quoting Armendariz, at p. 120.) Agreements that “compel 

arbitration of employee-initiated claims while exempting from arbitration 

employer-initiated claims” are unconscionable. (Baltazar, supra, 62 Cal.4th 

at p. 1248, fn. 4.)

Here, the parties “mutually agree[d]” to arbitrate “all claims or 

controversies arising out of Employee’s employment or its termination . . . 

that either party may have against the other . . . .” Theoretically, “either 

party is entitled to seek and obtain temporary injunctive relief (and 

subsequent preliminary/permanent injunctive relief) from a court . . . .” The 

trial court found this carve-out lacked mutuality. Acknowledging that the 

agreement allows either party to seek injunctive relief in court, the trial court 

reasoned that “the employer is the party most likely to bring such claims.” It 

referred to the agreement’s discussion of employer claims arising from 

exposure of confidential information as the only specific example of 

circumstances justifying the carve-out. 

The provision is one-sided in that the claims exempt from arbitration

most likely to be brought are claims by the employer, such as trade secret 

and intellectual property claims as well as unfair competition claims. While 

it is not inconceivable that an employee might assert a claim for injunctive

relief, as a practical matter such claims seem unlikely at best. Nonetheless,

our high court has held such a provision is not “unfairly one-sided merely 

because one side is, as a practical matter, more likely to make use of it.” 

(Baltazar, supra, 62 Cal.4th at p. 1248 & fn. 4.) In this case, however, the 

provision is one-sided in another respect: it states that the parties 

acknowledge the “irreparable harm” of any exposure of the employer’s

confidential information, thus relieving the employer from proving that 
19

essential element of a claim for injunctive relief. No such relief from proving 

that or any other essential element of an injunctive relief claim is provided to 

the employee.

Arbitration agreements that exempt claims for injunctive relief more 

likely to be brought by the employer have been held unconscionable where 

there were additional unconscionable terms or a high degree of procedural 

unconscionability. For example, in Mercuro v. Superior Court (2002) 

96 Cal.App.4th 167, 175-179, the agreement reflected a high degree of 

procedural unconscionability and the court of appeal held that “given the 

[resulting] low threshold of substantive unconscionability,” an exclusion of 

claims for injunctive or other equitable relief for certain claims most likely to 

be asserted by the employer, “together with the disadvantages to the 

employee in using” a particular arbitration provider, rendered the agreement 

unconscionable. (See also Fitz, supra, 118 Cal.App.4th at pp. 709, 719

[agreement carved out all “disputes over confidentiality/non-compete 

agreements or intellectual property rights” and failed to provide for adequate 

discovery in arbitration]; Samaniego v. Empire Today LLC (2012) 

205 Cal.App.4th 1138, 1147-1148 [agreement exempting “claims typically 

brought by employers—namely, those seeking declaratory and preliminary 

injunctive relief to protect . . . proprietary information and noncompetition/non-solicitation provisions” unconscionable when considered 

together with “multiple [additional] one-sided provisions.”

Given the high degree of procedural unconscionability here, the carveout for injunctive relief with the provision effectively stipulating to 

irreparable harm where the employer seeks injunctive relief regarding 

confidential information establishes a low degree of substantive 

unconscionability. That, together with the unconscionable fee-shifting clause 
20

for motions to compel arbitration and high degree of procedural 

unconscionability in this case renders the agreement unenforceable absent 

severance of the unconscionable terms. We next turn to the issue of 

severance. 

IV.

Severance

Where a court finds a contract or any of its provisions unconscionable, 

it “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.” (Civ. 

Code, § 1670.5, subd. (a).) We review the trial court’s refusal to sever 

unconscionable terms for abuse of discretion. (Gostev, supra, 88 Cal.App.5th 

at p. 1062.)

In Armendariz, the court described the basic principles of severance in 

this context, explaining that courts must “look to the various purposes of the 

contract.” (Armendariz, supra, 24 Cal.4th at p. 124.) “If the central purpose 

of the contract is tainted with illegality, then the contract as a whole cannot 

be enforced.” (Ibid.) “If the illegality is collateral to the main purpose of the 

contract,” and the illegal provision can be severed or restricted, severance or 

restriction is appropriate. (Ibid.) The overarching inquiry is whether the 

interests of justice would be furthered by severance. (Ibid.) The fact that an 

“arbitration agreement contains more than one unlawful provision” may 

“indicate a systematic effort to impose arbitration on an employee . . . as an 

inferior forum that works to the employer’s advantage” and may justify a 

conclusion “that the arbitration agreement is permeated by an unlawful 

purpose.” (Ibid.) And if “there is no single provision a court can strike or 

restrict in order to remove the unconscionable taint from the agreement,” as 
21

with an agreement that lacks mutuality, the court would have to “reform the 

contract, not through severance or restriction, but by augmenting it with 

additional terms,” which would exceed its power to cure a contract’s illegality. 

(Id. at pp. 124-125.) On the other hand, where “[t]here is only a single 

provision that is unconscionable” and “no contract reformation is required” 

since “the offending provision can be severed,” courts will sever the provision. 

(Little v. Auto Stiegler, Inc., supra, 29 Cal.4th at p. 1075.)

Here, the two substantively unconscionable provisions render

arbitration “an inferior forum.” (Armendariz, supra, 24 Cal.4th at p. 124.) 

The provision governing fee and cost awards upon a motion to compel 

arbitration, while clearly intended to discourage employees from challenging

the agreement in court and contrary to FEHA, could nonetheless have been

severed. (Ibid.) Indeed, the trial court stated it would be inclined to sever it,

were it not for the carve-out for injunctive relief. However, because it also 

found the injunctive relief provision unconscionable, the trial court declined 

to sever these two, unfairly one-sided provisions. The question is not whether 

we would have declined to sever those provisions but whether the trial court’s 

decision not to sever them was an abuse of discretion. 

In its reply brief, Donsuemor argues in conclusory fashion that even if 

both the fee-shifting provision and injunctive relief carve-out provision are 

unconscionable, the trial court abused its discretion in declining to sever 

them. The argument fails to persuade. It is conclusory and based on a 

premise we have rejected that the level of procedural unconscionability is 

low. Further, Donsuemor cites Lhotka v. Geographic Expeditions, Inc. (2010) 

181 Cal.App.4th 816 (Lhotka) without explaining how that case aids its 

position. As we see it, Lhotka, a decision by Division Three of this district, 

supports the opposite conclusion.
22

In Lhotka, Justice Siggins explained, “Civil Code section 1670.5, 

subdivision (a) gives the trial court discretion to either refuse to enforce a 

contract it finds to be unconscionable, or to strike the unconscionable 

provision and enforce the remainder of the contract. It provides: ‘If the court 

as a matter of law finds the contract or any clause of the contract to have 

been unconscionable at the time it was made 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.’ The trial court 

has discretion under this statute to refuse to enforce an entire agreement if 

the agreement is ‘permeated’ by unconscionability. (Armendariz, supra, 

24 Cal.4th at p. 122; Murphy v. Check ‘N Go of California, Inc. [2007]

156 Cal.App.4th [138,] 149.) An arbitration agreement can be considered 

permeated by unconscionability if it ‘contains more than one unlawful 

provision. . . . Such multiple defects indicate a systematic effort to impose 

arbitration . . . not simply as an alternative to litigation, but as an inferior 

forum that works to the [stronger party’s] advantage.’ (Armendariz, supra, at 

p. 124; Murphy, supra, at p. 148.) ‘The overarching inquiry is whether “ ‘the 

interests of justice . . . would be furthered’ ” by severance.’ (Armendariz, 

supra, at p. 124.)” (Lhotka, 181 Cal.App.4th at p. 826.) In Lhotka, the court 

affirmed the trial judge’s decision not to sever as “within the court’s 

discretion.” (Ibid.)

The trial court here declined to sever the unconstitutional provisions, 

observing, “As plaintiff argues, the agreement contains no severability clause; 

however, the court has statutory authority to sever unconscionable provisions 

under Civil Code § 1670.5, subd. (a). [¶] As noted above, the court would be 

inclined to strike the provision awarding fees for prevailing on a motion to 
23

compel arbitration. However, there remain[s] the other unconstitutional 

provision and the court does not find that severance would further the 

interests of justice. (Armendariz, supra, 24 Cal.4th at p. 124.) Thus, the 

court declines to sever the unconscionable provisions.” 

The trial court was aware of its discretion and of the high court’s 

admonition that, in deciding whether to sever, “the overarching inquiry is 

whether ‘ “the interests of justice . . . would be furthered” ’ by severance.” In 

short, Donsuemor has not persuaded us that the trial court abused its 

discretion.

DISPOSITION

The order denying Donsuemor’s motion to compel arbitration is 

affirmed. Monroy shall recover his costs on appeal.
24

STEWART, P.J.

We concur.

RICHMAN, J.

MILLER, J.

Monroy v. Donsuemor, Inc. (A167487)