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Filed 11/30/21 Sanchez v. JFK Memorial Hospital CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication 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

FOURTH APPELLATE DISTRICT

DIVISION TWO

ARACELI SANCHEZ,

Plaintiff and Respondent,

v.

JFK MEMORIAL HOSPITAL, INC. et al.,

Defendants and Appellants.

E072560

(Super. Ct. No. PSC1805119)

OPINION

APPEAL from the Superior Court of Riverside County. David M. Chapman, 

Judge. Reversed.

Hill, Farrer & Burrill, Michael S. Turner, Dean E. Dennis and Jenner C. Tseng, for 

Appellants and Defendants.

Law Offices of Ramin R. Younessi, Ramin R. Younessi, Gabrielle A. Pedone and 

Samantha L. Ortiz, for Plaintiff and Respondent. 
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I.

INTRODUCTION

Plaintiff and Respondent, Araceli Sanchez, sued her employer, Defendant and 

Appellant, JFK Memorial Hospital, Inc. (JFK), and her supervisor, Jose Pecero, for 

various claims related to her employment. In response, defendants petitioned to compel 

arbitration of her claims. The trial court denied the petition because the parties’ 

arbitration agreement’s prearbitration dispute resolution process is unconscionable and 

not severable. We reverse.

II.

FACTUAL AND PROCEDURAL BACKGROUND

JFK hired Sanchez in 2015. As part of her onboarding, Sanchez electronically 

signed JFK’s “Handbook and Fair Treatment Process Acknowledgement.”

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 The 

Acknowledgement provides in relevant part: “Except to the extent that any applicable 

collective bargaining agreement provides otherwise, I hereby voluntarily agree to use the 

Company’s Fair Treatment Process [(FTP)] and to submit to final and binding arbitration 

any and all claims and disputes that are related in any way to my employment or the 

termination of my employment” with JFK. 

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JFK is a part of Tenet Healthcare. All of Sanchez’s employment documents 

refer to “Tenet” instead of JFK, but there is no material difference between them for 

purposes of this appeal.
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In 2018, Sanchez filed this case against JFK and Pecero, alleging various 

employment-related claims.2 Defendantstherefore petitioned to compel arbitration of 

Sanchez’s claims, except for her claim under the Private Attorneys General Act (PAGA; 

Lab. Code, §§ 2699 et seq.). Sanchez opposed the petition on the grounds that she did 

not agree to arbitrate her claims and the FTP is unconscionable.

The trial court denied the petition. The court found that Sanchez agreed to 

arbitrate her claims, but found that the FTP is unconscionable and thus unenforceable.

The court reasoned that the FTP was “presumed to be procedurally unconscionable 

because of the inequality of the parties’ bargaining power and an absence of real 

negotiation or a meaningful choice on the part of Sanchez whether to agree to the

[arbitration] agreement.” The trial court found that the FTP’s four-step prearbitration 

procedure was substantively unconscionable because it would afford JFK a “‘free peek’” 

at Sanchez’s case before she requested arbitration, which would give JFK “‘an advantage 

if and when [she] were to later demand arbitration.’” The trial court also found it was 

“not possible” to sever the FTP’s “prearbitration requirements” and, even if it were, 

severing them was inappropriate because the FTP’s prearbitration process sought “to 

inhibit Sanchez’s access to a fair resolution of the dispute by requiring her to disclose to 

JFK the evidence and arguments she would present before arbitration.”

Defendants timely appealed.

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The allegations underlying Sanchez’s claims are not relevant to the issues on 

appeal. 
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III.

DISCUSSION

Defendants argue the trial court erred in denying its petition to compel arbitration

because (1) the FTP’s prearbitration process is not unconscionable and (2) even if it were, 

the trial court should have severed the prearbitration provisions, upheld the parties’ 

arbitration agreement, and ordered them to arbitration. We assume without deciding that 

the FTP’s prearbitration process is unconscionable because, even if it is, the trial court 

should have severed it, granted defendants’ petition, and ordered the parties to arbitration.

Civil Code section 1670.5, subdivision (a) 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.” 

Accordingly, “[u]nder this section the court, in its discretion, may 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.” (Cal. Civ. Code, § 1670.5, Legis. Comm. Comments, n. 2; see 

also Lhotka v. Geographic Expeditions, Inc. (2010) 181 Cal.App.4th 816, 826 [“The trial 

court has discretion under [Civil Code section 1670.5, subdivision (a)] to refuse to 

enforce an entire agreement if the agreement is ‘permeated’ by unconscionability.”].)
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Two policies support severing a contract’s illegal provision rather than voiding the 

entire contract: “The first is to prevent parties from gaining undeserved benefit or 

suffering undeserved detriment as a result of voiding the entire agreement—particularly 

when there has been full or partial performance of the contract. [Citations.] Second, 

more generally, the doctrine of severance attempts to conserve a contractual relationship 

if to do so would not be condoning an illegal scheme.” (Armendariz v. Foundation 

Health Psychcare Servs. (2000) 24 Cal.4th 83, 123-124.)

To determine whether to sever unconscionable provisions in an arbitration 

agreement, “[c]ourts 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.” (Armendariz v. Foundation Health 

Psychcare Servs., supra, 24 Cal.4th at p. 124.) 

Thus, “[i]n determining whether to sever or restrict illegal terms rather than 

voiding the entire contract, ‘[t]he overarching inquiry is whether “‘the interests of justice 

. . . would be furthered’” by severance.’ [Citation.] Significantly, the strong legislative 

and judicial preference is to sever the offending term and enforce the balance of the 

agreement: Although ‘the 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[,] . . . it also appears to contemplate the latter course only when an 
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agreement is “permeated” by unconscionability.’ [Citation.]” (Roman v. Superior Court 

(2009) 172 Cal.App.4th 1462, 1477-1478.) To determine whether an arbitration 

agreement is “permeated” with unconscionability, courts look to (1) whether there are 

multiple unconscionable provisions; (2) whether “the central purpose” of the contract is 

illegal; and (3) whether the contract can be “saved” by severing the unconscionable 

terms, or whether the contract would have to be “reformed.” (Poublon v. C.H. Robinson 

Co. (9th Cir. 2017) 846 F.3d 1251, 1273.) 

Sanchez did not comply with the FTP prearbitration process and defendants have 

not sought to enforce it. The arbitration agreement can be “saved” by severing the

prearbitration provisions of the FTP and ordering the parties to arbitration. After doing 

so, Sanchez’s claims can be arbitrated free of any allegedly unconscionable terms. The 

trial court thus could have easily severed the FTP’s prearbitration provisions, upheld the 

remainder of the parties’ arbitration agreement (none of which Sanchez challenges), and 

ordered the parties to arbitration. As a result, we conclude the trial court abused its 

discretion in declining to sever the FTP’s prearbitration provisions and denying 

defendants’ petition to compel arbitration. 

IV.

DISPOSITION

The trial court’s order denying defendants’ petition to compel arbitration is 

reversed. The trial court is directed to sever the FTP’s prearbitration provisions, grant 
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defendants’ petition to compel arbitration, and order the parties to arbitrate Sanchez’s 

claims. Defendants may recover their costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

CODRINGTON

Acting P. J.

We concur:

FIELDS

J.

MENETREZ

J.