Filed 2/28/24 Valadez v. In-N-Out Burgers CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for 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 THREE

ERIKA VALADEZ et al.,

Plaintiffs and Appellants,

v.

IN-N-OUT BURGERS,

Defendant and Respondent.

B318125

(Los Angeles County

Super. Ct. No. BC675696)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Malcolm Mackey, Judge. Affirmed.

Mallison & Martinez, Stan S. Mallison, Hector R. Martinez, 

and Gonzalo Quezada for Plaintiffs and Appellants.

Littler Mendelson, Fermin H. Llaguno, and Michael L. 

Kibbe for Defendant and Respondent. 

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Plaintiffs Erika Valadez and Efren Lara appeal from the 

trial court’s judgment affirming an arbitration award in favor of 

defendant In-N-Out Burgers (INO). Plaintiffs contend the court 

erred in concluding their employment-related claims were subject 

to arbitration. Valadez argues that INO failed to prove she 

signed the arbitration agreement, and both plaintiffs assert that 

even if they signed it, they timely opted out of the agreement. 

Plaintiffs also argue the arbitration agreement was 

unconscionable. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Lara and Valadez began working for INO in 1987 and 2008, 

respectively. Lara was Valadez’s direct supervisor at INO’s meat 

processing facility. In September 2017, Valadez, Lara, and five 

others1 filed a complaint against INO, alleging sexual and 

national origin discrimination, sexual harassment, hostile work 

environment, and other employment-related claims.

I. Motion to Compel Arbitration

In February 2018, INO filed a motion to compel arbitration

of plaintiffs’ claims. In support of the motion, INO’s Regional 

Human Resources Manager, Deborah Marianno, attested that in 

2013, plaintiffs received and electronically signed INO’s dispute 

resolution agreement (DRA) through an online training module.

The training module provided the associate a copy of the fourpage DRA in both English and Spanish. The DRA stated the 

agreement was governed by the Federal Arbitration Act. It 

explained:

1 We do not discuss the five other plaintiffs any further. We 

use “plaintiffs” to refer solely to Valadez and Lara.
3

Except as it otherwise provides, this Agreement is 

intended to apply to the resolution of disputes that 

otherwise would be resolved in a court of law, and 

therefore this Agreement requires all such disputes 

to be resolved only by an arbitrator through final and 

binding arbitration and not by way of court or jury 

trial. Such disputes include without limitation 

disputes arising out of or relating to interpretation or 

application of this Agreement, but not as to the 

enforceability, revocability or validity of the 

Agreement or any portion of the Agreement.

The Agreement also applies, without limitation, to 

disputes regarding the employment relationship, 

trade secrets, unfair competition, compensation, 

breaks and rest periods, termination, or harassment 

and claims arising under the Uniform Trade Secrets 

Act, Civil Rights Act of 1964, Americans With 

Disabilities Act, Age Discrimination in Employment 

Act, Family Medical Leave Act, Fair Labor Standards

Act, Employee Retirement Income Security Act, 

Genetic Information Non-Discrimination Act, and 

state statutes, if any, addressing the same or similar 

subject matters, and all other state statutory and 

common law claims (excluding worker[’]s 

compensation state disability insurance and 

unemployment insurance claims).

The DRA further stated the arbitrator “shall be selected by 

mutual agreement of [INO and the employee]” and that “the 

parties will have the right to conduct adequate civil discovery, 

bring dispositive motions, and present witnesses and evidence as 

needed to present their cases and defenses, and any disputes in 

this regard shall be resolved by the Arbitrator.” As to paying for 

arbitration, the DRA stated: “Each party will pay the fees for his, 
4

her or its own attorneys, subject to any remedies to which that 

party may later be entitled under applicable law. However, in all 

cases where required by law, the Company will pay the 

Arbitrator’s and arbitration fees. If under applicable law the 

Company is not required to pay all of the Arbitrator’s and for 

arbitration fees, such fee(s) will be apportioned between the 

parties in accordance with said applicable law, and any disputes 

in that regard will be resolved by the Arbitrator.”

Although the DRA waived the employee’s right to “bring 

any dispute in arbitration on . . . a class, collective, or private 

attorney general basis,” it provided that the waiver “shall be 

severable in any case in which the dispute is filed as an 

individual action and severance is necessary to ensure that the 

individual action proceeds in arbitration.”

Paragraph 10 of the DRA, titled “An Associate’s Right to 

Opt Out of this Agreement” stated:

An Associate may submit a form stating that the 

Associate wishes to opt out and not be subject to this 

Agreement. The Associate must submit a signed and 

dated statement on a “Dispute Resolution Agreement 

Opt Out Form” (“Form”) that can be obtained from

the Company’s website, www.in-n-out.com, under the 

Associate Events/Associate Portal tab at the bottom 

of the home page. In order to be effective, the signed 

and dated Form must be returned to the Human 

Resources Department within 30 days of the 

Associate’s receipt of this Agreement. For Associates 

under 18 years old choosing to opt out, the signed and 

dated Form must be returned to the Human 

Resources Department within 30 days of the receipt 

of the Agreement by the Associate’s parent or 

guardian. An Associate who timely opts out as 

provided in this paragraph will not be subject to any 
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adverse employment action as a consequence of that 

decision and may pursue available legal remedies 

without regard to this Agreement. Should an 

Associate not opt out of this Agreement within 30 

days of the Associate’s (or minor Associate’s parent or 

guardian’s) receipt of this Agreement, continuing the 

Associate’s employment constitutes mutual 

acceptance of the terms of this Agreement by 

Associate and the Company. An Associate has the 

right to consult with counsel of the Associate’s choice 

concerning this Agreement.

To access the DRA training module which presented the 

agreement quoted in part above, associates were required to 

input their unique associate number and their personal 

identification number (PIN), which they were prohibited from 

sharing with others. Marianno stated: “Toward the conclusion of 

the module [informing the associate of her rights and obligations 

under the DRA], a dialog box asks the Associate to acknowledge 

her receipt of the DRA as well as her understanding that, among 

other things, she may voluntarily opt out of the DRA and, if she 

does not timely do so, ‘it constitutes mutual acceptance’ of the 

DRA. The Associate acknowledges this by clicking a button 

stating, ‘I acknowledge,’ at the bottom of the dialog box. After the 

completion of the module, after the Associate’s acknowledgment 

of the DRA, the signature and date line of the DRA become 

populated with the Associate’s printed name and the date and 

time of the Associate’s assent, respectively. A record of this 

activity gets saved in INO’s electronic databases in the ordinary 

course of business.” In addition, the training module explained 

“the process an Associate should undertake should they have 

wished to opt out from the DRA. Further, the module explained 
6

that any associate questions or concerns could be addressed to 

either the Legal or Human Resources Departments and provides 

a phone number to contact.” Marianno stated that since the 

implementation of the DRA in 2012, more than 260 associates 

have opted out.

Marianno attested INO’s records showed that in February 

2013, Valadez and Lara completed the DRA training module, and 

received and acknowledged the DRA. Marianno attached as 

exhibits to her declaration records of Valadez’s and Lara’s 

electronically-signed and time-stamped agreements, which state 

above their signatures: “I acknowledge receipt of and agree to 

this Dispute Resolution Agreement.” Marianno reported that 

INO did not receive opt out forms from Valadez or Lara.

II. Opposition to the Motion to Compel Arbitration 

In March 2018, Valadez and Lara filed their opposition to 

INO’s motion to compel arbitration, attacking the DRA’s 

formation and fairness. They first argued their “ ‘electronic 

acknowledgments’ [on the DRAs were] not valid signatures and 

[did] not create a contract.” Valadez denied ever seeing the DRA 

module and insinuated another employee electronically forged it 

with her employee identification number. Lara asserted he 

signed it under threat of termination.

In her declaration, Valadez attested her primary language 

is Spanish but she can read and speak English on a basic level. 

Valadez averred that while working for INO, she never used a 

computer and did not know how to use a computer. Valadez 

stated that on two occasions she was assisted by bilingual INO 

coworker Ana Rodriguez in completing surveys on the computer. 

However, Valadez attested these two occasions did not involve 

the DRA. She stated the first time she saw the DRA was when 
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INO produced it to her attorneys in response to a request for her 

personnel file. She said that she never participated in any online 

modules and never clicked on any acknowledge button to sign the 

DRA. She attested that not only Rodriguez, but other 

supervisors, managers, and assistants knew how to log into her 

employee account using her associate number. Valadez denied 

having a PIN. In 2017, Valadez completed the opt out form and 

submitted it to INO’s human resources department.

Lara (Valadez’s supervisor) also attested: “Valadez did not 

personally use a computer at the times indicated [by Marianno].

Instead, another employee logged in under [Valadez’s account]

and input information for [her]. This was a common practice for 

employees who did not speak English or know how to use 

computers.” Counsel argued someone else from INO signed 

Valadez’s name to the DRA without her consent.

In his declaration, Lara admitted to electronically signing 

the DRA in February 2014 but only because his supervisor told 

him he would need to “get a lawyer” if he did not sign it. Lara 

attested he felt that he would be fired if he did not sign 

immediately and he did not read the DRA when he signed it. 

Lara subsequently submitted the DRA opt out form in 2017 with 

assistance from his lawyers.

Plaintiffs also asserted the DRA was unenforceable because 

it was unconscionable. They argued that the DRA was 

procedurally unconscionable since it was “clearly [a contract] of 

adhesion,” failed to state the method for selecting an arbitrator,

and provided no rules for arbitration. Plaintiffs contended the 

DRA was substantively unconscionable since it lacked mutuality

with regard to a confidentiality agreement. If plaintiffs violated 
8

their confidentiality agreement with INO, INO could apply to a 

court for injunctive relief.

III. INO’s Reply

In May 2018, INO filed its reply, attacking plaintiffs’ 

credibility. INO pointed out that Valadez (who had attested she 

never had a PIN and thus could not electronically sign the DRA) 

needed a PIN to clock in and out of work, complete and receive 

evaluations, and do other necessary work functions. Valadez’s

performance evaluations from 2011 through 2013 showed her 

electronic signatures with date stamps, all made by using her 

unique PIN. INO also produced a copy of INO’s “Personal 

Identification Number (PIN) Policy,” which Valadez signed by 

hand. In the signed policy, Valadez acknowledged that she must 

(1) “take all steps necessary to protect the confidentiality of [her] 

PIN”; (2) “not under any circumstances share [her] PIN with 

anyone”; (3) “establish a new PIN in a confidential manner” if she 

forgets it or if someone learns her PIN; and (4) “not use another 

person’s PIN under any circumstances.” Several other INO 

employees from the meat packing facility also attested that 

associates’ PINs were confidential and were not shared with 

others.

In support of the reply, Rodriguez declared that when she 

was an associate in the meat department, at the request of her 

supervisors, she occasionally helped associates, whose primary 

language was Spanish, complete INO’s web-based performance 

evaluations. Her assistance was limited to translating words or 

sentences associates did not understand. Rodriguez stated she 

did not know Valadez’s or any other employee’s PIN. Rodriguez 

had observed Valadez log herself into the computer during 

training modules and Valadez had no trouble using the computer. 
9

Rodriguez only minimally assisted Valadez with translation. 

According to INO’s attendance records, Rodriguez was not at 

work on the date Valadez electronically signed the DRA.

INO also asserted Lara’s failure to read the DRA and to opt 

out as permitted in the DRA were a result of Lara’s own lack of 

diligence and not any procedural unconscionability on the part of 

INO. Lara’s supervisor contradicted Lara’s statements and

attested that he did not compel Lara to sign anything, he was 

never pressured by his superiors to obtain anybody’s agreement 

to the DRA, and he always understood that associates could opt 

out of the DRA at their choosing without any negative 

repercussions. INO additionally pointed out that a section of the 

DRA contained the rules for arbitration.

IV. The Court’s Ruling and Subsequent Entry of 

Judgment

In June 2018, after hearing argument, the court found 

“plaintiffs expressly [agreed] to resolve any dispute they have 

with the defendant [INO] arising from their employment through 

binding arbitration. The agreements were entered electronically 

after each employee accessed the document online.” The court 

granted INO’s motion to compel arbitration, stayed the matter, 

and ordered the parties into binding arbitration.

Three years later, after successfully defending against 

plaintiffs’ claims, INO filed its petition to confirm the contractual 

arbitration award. In January 2022, the trial court entered 

judgment in favor of INO, stating plaintiffs take nothing by their 

complaint. Plaintiffs timely appealed.

DISCUSSION

Plaintiffs assert: (1) INO failed to prove Valadez assented 

to the arbitration agreements, (2) both plaintiffs opted out of the 
10

agreement, and (3) the DRA was procedurally and substantively 

unconscionable. 

I. General Principles 

“Although the arbitration agreement in the present case 

provides that the arbitration is to be governed by the [Federal 

Arbitration Act (FAA)] and not California law, generally the 

California Arbitration Act [(CAA, Code Civ. Proc.,2 §§ 1280–

1294.2)] governs arbitral procedures brought in California 

courts.” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 

899, 922.) Under the CAA, “when a petition to compel arbitration 

is filed and accompanied by prima facie evidence of a written 

agreement to arbitrate the controversy, the court itself must 

determine whether the agreement exists and, if any defense to its 

enforcement is raised, whether it is enforceable. Because the 

existence of the agreement is a statutory prerequisite to granting 

the petition, the petitioner bears the burden of proving its 

existence by a preponderance of the evidence. If the party 

opposing the petition raises a defense to enforcement . . . that 

party bears the burden of producing evidence of, and proving by a 

preponderance of the evidence, any fact necessary to the defense.” 

(Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 

Cal.4th 394, 413 (Rosenthal); §§ 1281.2, 1290.2.) “In these 

summary proceedings, the trial court sits as a trier of fact, 

weighing all the affidavits, declarations, and other documentary 

evidence, as well as oral testimony received at the court’s 

discretion, to reach a final determination. [Citation.]” (Engalla 

v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.)

2 All subsequent statutory references are to the Code of Civil 

Procedure.
11

Where, as in this case, the order granting a motion to 

compel arbitration depends on resolution of disputed facts, we 

review the decision for substantial evidence. (Ahern v. Asset 

Management Consultants, Inc. (2022) 74 Cal.App.5th 675, 687

(Ahern).) In doing so, we must “ ‘ “ ‘accept the trial court’s 

resolution of disputed facts when supported by substantial 

evidence; we must presume the court found every fact and drew 

every permissible inference necessary to support its judgment, 

and defer to its determination of the credibility of witnesses and 

the weight of the evidence.’ ” ’ ” (Hotels Nevada, LLC v. L.A. 

Pacific Center, Inc. (2012) 203 Cal.App.4th 336, 348.)

II. Substantial Evidence Supported the Court’s Finding 

that Valadez Agreed to the DRA3

Valadez argues INO failed to prove that she agreed to the 

DRA. “Every contract requires mutual assent or consent (Civ.

Code, §§ 1550, 1565), and ordinarily one who signs an instrument 

which on its face is a contract is deemed to assent to all its terms. 

A party cannot avoid the terms of a contract on the ground that 

he or she failed to read it before signing.” (Marin Storage & 

Trucking, Inc. v. Benco Contracting & Engineering, Inc. (2001) 89 

Cal.App.4th 1042, 1049 (Marin Storage).)

Under Civil Code section 1633.7, “an electronic signature 

has the same legal effect as a handwritten signature.” (Ruiz v. 

Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 843

(Ruiz).) “Civil Code section 1633.9 addresses how a proponent of 

an electronic signature may authenticate the signature—that is, 

show the signature is, in fact, the signature of the person the 

3 Lara did not deny signing the DRA; on appeal, he argues 

that it is unenforceable for other reasons discussed below.
12

proponent claims it is. The statute states: ‘(a) An electronic 

record or electronic signature is attributable to a person if it was 

the act of the person. The act of the person may be shown in any 

manner, including a showing of the efficacy of any security 

procedure applied to determine the person to which the electronic 

record or electronic signature was attributable.’ (Civ. Code, 

§ 1633.9, subd. (a), italics added.)” (Ruiz, supra, 232 Cal.App.4th 

at p. 843.)

Valadez cites her own declaration and argues “the record 

clearly reflects that someone other than Valadez accessed the 

online training module and affixed her signature without her 

authorization, knowledge, or consent.” She contends that INO 

summarily asserted that Valadez signed the DRA and that

Regional Human Resources Manager Marriano’s declaration was 

insufficient to authenticate Valadez’s signature. We disagree.

Marianno attested INO’s records showed that on February 

27, 2013, Valadez completed the DRA training module and 

electronically signed the DRA by entering her employee 

identification number and her PIN. Upon entry of these 

numbers, Valadez’s printed name and the date and time of her

assent populated the signature and date line of the DRA; a record 

of the agreement was saved to INO’s electronic database. Entry 

of the employee identification number and PIN was the only way 

to create this electronic record. Declarations from Marianno and 

other employees, and the copy of INO’s PIN Policy, hand-signed 

by Valadez, supported the court’s implicit conclusion that despite 

Valadez’s assertion otherwise, Valadez had a PIN, which she was 

prohibited from sharing with others, and that she regularly used 

for routine work functions. The court could reasonably conclude

that the electronic signature on the DRA was attributable to 
13

Valadez since INO’s evidence indicated the PIN was known solely 

to her. 

The court was not required to believe Valadez’s statements 

to the contrary. And, “[i]t is not the function of this court to 

reweigh the evidence and substitute its judgment for the 

judgment of the trial court.” (Berman v. Health Net (2000) 80 

Cal.App.4th 1359, 1373 [affirming trial court’s denial of a motion 

to compel arbitration].) Valadez’s assertion that the 

authentication was invalid because INO’s security measures 

lacked integrity fails for the same reason. The court was entitled 

to disbelieve Valadez’s statements about how others logged her 

into computers, particularly in light of INO’s employee 

declarations that they did not do so.

Valadez likens the facts here to Ruiz, supra, 232 

Cal.App.4th at pages 842–844, asserting INO’s evidence was 

insufficient to prove her consent. In Ruiz, the Court of Appeal 

concluded the evidence was insufficient to support a finding that 

an electronic signature on the arbitration agreement was the act 

of Ruiz because the business manager authenticating the 

arbitration agreement “summarily asserted . . . that Ruiz was the 

person who electronically signed the [arbitration] agreement.”

(Ruiz, at p. 843.) The fatal flaw of the business manager’s 

declaration was that she “did not explain that an electronic 

signature . . . could only have been placed on the [arbitration]

agreement . . . by a person using Ruiz’s ‘unique login ID and 

password’; that the date and time printed next to the electronic 

signature indicated the date and time the electronic signature 

was made; that all . . . employees were required to use their 

unique login ID and password when they . . . signed electronic 

forms and agreements; and the electronic signature . . . was, 
14

therefore, apparently made by Ruiz on September 21, 2011, at 

11:47 a.m.” (Ibid.) 

In contrast, Marianno’s declarations provided these critical 

facts. INO’s evidence more closely tracks the declaration

proffered by the employer in Espejo v. Southern California 

Permanente Medical Group (2016) 246 Cal.App.4th 1047 (Espejo). 

Distinguishing its facts from the facts in Ruiz, the Espejo court 

found sufficient evidence that the employee signed the 

arbitration agreement where the employer’s declarant detailed 

the “security precautions regarding transmission and use of an 

applicant’s unique username and password, as well as the steps 

an applicant would have to take to place his or her name on the 

signature line of the employment agreement and the 

[agreement]” by using that unique username and password. (Id.

at 1062.) Like in Espejo, the details provided by Marianno satisfy

the requirements articulated in Ruiz and establish that the 

electronic signature on the document was an act of Valadez. 

Without citation to authority, Valadez asserts that INO 

failed to prove she signed the DRA because INO did not offer a 

“percipient witness who . . . personally witnessed Valadez click 

the button acknowledging her consent to affix her electronic 

signature [or] who could attest that they at least heard Valadez 

verbally agree to allow another employee to affix her electronic 

signature to the document.” However, INO needed only to 

demonstrate that the electronic signature was Valadez’s act, 

which could be shown “in any manner,” including by

demonstrating that the DRA could only be signed by Valadez 

using her unique employee identification number and private 
15

PIN. (Civ. Code, § 1633.9, subd. (a); Ruiz, supra, 232 Cal.App.4th 

at p. 843.)4

III. Plaintiffs Did Not Timely Opt Out of the DRA

Plaintiffs argue that even if they signed the DRA, they 

timely opted out within 30 days of receiving a physical copy of the 

DRA after their attorneys requested their employment records. 

Although plaintiffs made factual assertions in their declarations 

about opting out, in their opposition brief before the trial court,

they did not argue that the DRA was inapplicable to their claims

due to their belated opt outs. (See Blankenship v. Allstate Ins. 

Co. (2010) 186 Cal.App.4th 87, 105 [“We do not consider factual 

arguments raised for the first time on appeal, and this argument 

is forfeited.”].) Although we generally do not consider such a 

factual argument for the first time on appeal, we nonetheless 

exercise our discretion to address this purely legal question 

because of the undisputed factual record. (DD Hair Lounge, LLC 

v. State Farm General Ins. Co. (2018) 20 Cal.App.5th 1238, 1243.)

According to paragraph 10 of the DRA, “In order [for the

opt out] to be effective, the signed and dated Form must be 

returned to the Human Resources Department within 30 days of 

the Associate’s receipt of this Agreement.” Plaintiffs assert 

“receipt” means when they obtained a copy of the agreement in 

2017.

4 In their reply brief, plaintiffs argue the court abused its 

discretion in declining to hold an evidentiary hearing on the issue 

of consent. We disagree. “There is simply no authority for the 

proposition that a trial court necessarily abuses its discretion, in 

a motion proceeding, by resolving evidentiary conflicts without 

hearing live testimony.” (Rosenthal, supra, 14 Cal.4th at p. 414.) 

The court had adequate evidence before it to make its decision.
16

In making this argument, plaintiffs ignore the plain 

language of the agreement. “We interpret words in a contract in 

accordance with their ordinary and popular sense, unless the 

words are used in a technical sense or a special meaning is given 

to them by usage. [Citation.] If contractual language is clear and 

explicit and does not involve an absurdity, the plain meaning 

governs.” (Westrec Marina Management, Inc. v. Arrowood 

Indemnity Co. (2008) 163 Cal.App.4th 1387, 1392.)

The final page of the DRA, above plaintiffs’ time-stamped 

signatures, states, “I acknowledge receipt of and agree to this 

Dispute Resolution Agreement.” Thus, Valadez and Lara 

received the DRA on February 27 and 28, 2013, respectively, as 

reflected on the signature lines of their electronically-signed 

DRAs. Since plaintiffs submitted their opt out forms years after 

receiving the DRA, they failed to timely opt out within 30 days of 

receipt. 

IV. Despite Some Procedural Unconscionability, the 

Agreement Was Enforceable 

Plaintiffs also argue the DRA was unenforceable because it 

is unconscionable. “ ‘[G]enerally applicable contract defenses, 

such as . . . unconscionability, may be applied to invalidate 

arbitration agreements without contravening’ the FAA. 

[Citations.] Unconscionability consists of both procedural and 

substantive elements. 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. [Citations.] A 

contract term is not substantively unconscionable when it merely 
17

gives one side a greater benefit; rather, the term must be ‘so onesided as to “shock the conscience.” ’ ” (Pinnacle Museum Tower 

Assn. v. Pinnacle Market Development (US), LLC (2012) 55 

Cal.4th 223, 246 (Pinnacle).)

“The party resisting arbitration bears the burden of proving 

unconscionability. [Citations.] Both procedural 

unconscionability and substantive unconscionability must be 

shown, but ‘they need not be present in the same degree’ and are 

evaluated on ‘ “a sliding scale.” ’ [Citation.] ‘[T]he more 

substantively oppressive the contract term, the less evidence of 

procedural unconscionability is required to come to the conclusion 

that the term is unenforceable, and vice versa.’ ” (Pinnacle, 

supra, 55 Cal.4th at p. 247.)

“[U]nconscionability is a question of law we review de novo. 

[Citation.] To the extent the trial court’s determination on the 

issue turned on the resolution of contested facts, we would review 

the court’s factual determinations for substantial evidence.” 

(Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 

Cal.App.4th 74, 82.)

a. Procedural Unconscionability 

Procedural unconscionability requires oppression or 

surprise. (Pinnacle, supra, 55 Cal.4th at p. 247.) “ ‘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.’ ” (Morris v. 

Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1317.) 

“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 
18

a take-it-or-leave-it basis.’ ” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 

111, 126; see Armendariz v. Foundation Health Psychcare 

Services, Inc. (2000) 24 Cal.4th 83, 113 (Armendariz).) Under 

California law, “an opt-out provision does not insulate an 

arbitration agreement from a finding of procedural 

unconscionability.” (Swain v. LaserAway Medical Group, Inc.

(2020) 57 Cal.App.5th 59, 69.) 

In Gentry v. Superior Court (2007) 42 Cal.4th 443, 470 

(Gentry), abrogated on other grounds by Iskanian v. CLS 

Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 360

(Iskanian), our Supreme Court held that a 30-day opt out 

provision, like the one at issue in this case, did not automatically 

eliminate procedural unconscionability and must be considered in 

light of the rest of the circumstances of the contract. The court 

explained, “It is true that freedom to choose whether or not to 

enter a contract of adhesion is a factor weighing against a finding 

of procedural unconscionability.” (Gentry, at p. 470.) 

Despite the opt out provision, the Supreme Court concluded 

there was no authentic informed choice made by Gentry based on 

the one-sided information provided by his employer, Circuit City. 

(Gentry, supra, 42 Cal.4th at pp. 470–472.) At the time of hiring, 

Circuit City gave Gentry “a packet that included an ‘Associate 

Issue Resolution Package’ and Circuit City’s ‘Dispute Resolution 

Rules and Procedures.’ ” (Id. at p. 451.) Although the package

“alluded to some of the shortcomings of arbitration in the general 

sense, it did not mention any of the additional significant 

disadvantages that this particular arbitration agreement had 

compared to litigation.” (Id. at p. 470.) The Circuit City

arbitration agreement significantly curtailed the employee’s legal 

remedies and rights by reducing the statute of limitations for 
19

overtime wages and the recovery period for backpay, imposing a 

maximum of $5,000 in punitive damages, and eliminating the

employee’s ability to recover attorney fees if successful in 

arbitration. (Id. at pp. 470–471.) The court explained that 

although an employee who read the dispute resolution rules and 

procedures “would have encountered the above provisions, only a 

legally sophisticated party would have understood that these 

rules and procedures are considerably less favorable to an 

employee than those operating in a judicial forum.” (Id. at 

p. 471.)

The Supreme Court further stated, “it is not clear that 

someone in Gentry’s position would have felt free to opt out. The 

materials provided to Gentry made unmistakably clear that

Circuit City preferred that the employee participate in the 

arbitration program. The ‘Associate Issue Resolution Handbook’

distributed with the opt[]out form touted the virtues of 

arbitration, including use of the all-capitalized subheading—

WHY ARBITRATION IS RIGHT FOR YOU AND CIRCUIT 

CITY—that left no doubt about Circuit City’s preference. The 

fact that the arbitration agreement was structured so that 

arbitration was the default dispute resolution procedure from 

which the employee had to opt out underscored Circuit City’s 

proarbitration stance. Given the inequality between employer 

and employee and the economic power that the former wields 

over the latter [citation], it is likely that Circuit City employees 

felt at least some pressure not to opt out of the arbitration 

agreement. The lack of material information about the 

disadvantageous terms of the arbitration agreement, combined 

with the likelihood that employees felt at least some pressure not 

to opt out of the arbitration agreement, leads to the conclusion 
20

that the present agreement was, at the very least, not entirely 

free from procedural unconscionability.” (Gentry, supra, 42 

Cal.4th at pp. 471–472.) 

As there was some procedural unconscionability, the 

Supreme Court remanded for the Court of Appeal to analyze the 

existence of substantive unconscionability, which it had not 

addressed on appeal. (Gentry, supra, 42 Cal.4th at p. 472.) The 

Court stated: “To reiterate, the fact that some degree of 

procedural unconscionability is present does not mean 

necessarily that the arbitration agreement is unenforceable. But 

it does mean that the agreement is not immune from judicial 

scrutiny to determine whether or not its terms are so one-sided or 

oppressive as to be substantively unconscionable.” (Id. at p. 472.)

Similarly here, the DRA suffers from some of the flaws 

exhibited by the Gentry agreement. First and foremost, INO 

required plaintiffs to sign and acknowledge the DRA; plaintiffs

had no choice but to do this to complete the training module. To 

opt out, INO employees had to go through two extra steps: 

seeking out an opt out form online and submitting it to INO’s 

human resources department within 30 days. As in Gentry, 

arbitration was the default option for the employees and opting 

out was additional work.

The training module also made clear that arbitration was 

INO’s preferred method for resolving conflicts with employees. 

As plaintiffs point out, the module states that arbitration 

furthers employees’ “ ‘[r]ight to be heard and to have their 

concerns addressed,’ and ‘respects and protects the rights of the 

Associate.’ ” We agree these aspects of the DRA and training 

module introducing the DRA were somewhat oppressive. Like in 

Gentry, it is not clear that non-executive employees in INO’s 
21

meat packing plant would have felt free to opt out given the 

pressure from INO’s pro-arbitration messaging in the training 

module and INO’s implicit discouragement of the opt out 

provision.

However, unlike Gentry, the DRA did not curtail the 

employee’s rights to recover individual damages, which was 

perhaps the most egregious aspect of the Gentry agreement. 

Instead, the DRA, which was provided in both English and 

Spanish, informed employees that they were giving up their right 

to bring a lawsuit against INO in court and that the agreement 

was not mandatory. In sections 4 through 6, the DRA provided 

the applicable arbitration rules, e.g. rules for commencing 

arbitration, selecting the arbitrator, discovery, presentation of 

evidence, and effect of the arbitrator’s decision. INO’s training 

module also “explained that any associate questions or concerns 

could be addressed to either the Legal or Human Resources 

Departments and provide[d] a phone number to contact.”5 The 

existence of a clear opt out provision and INO’s disclosure of the 

arbitration rules and procedures show that the contract was not 

really offered on a “ ‘take it or leave it basis,’ ” as plaintiffs assert. 

As such, the procedural unconscionability is not great.

5 Lara asserts that the DRA was procedurally 

unconscionable because he “was not provided with a copy of the 

agreement nor never given any of the rules that would govern if 

he voluntarily agreed to arbitration.” As stated above, the rules 

were provided. Had Lara wanted a copy of the agreement after 

he signed it, he could have requested it from either the human 

resources or legal departments; he does not state that he asked 

for such a copy.
22

As to Lara in particular, he asserts his agreement was 

infected with oppression because his supervisor stated if he did 

not sign the agreement, he would have to “get a lawyer.” Lara 

interpreted this to mean he would be terminated if he did not 

sign the DRA. Had Lara read through the training module and 

DRA, he would have learned he could opt out of the agreement. 

(See Marin Storage, supra, 89 Cal.App.4th at p. 1049 [“A party 

cannot avoid the terms of a contract on the ground that he or she 

failed to read it before signing.”].) The plain language of the 

agreement made it clear that Lara’s inference about termination 

was incorrect and the agreement was not oppressive on this 

basis. (Cf. OTO L.L.C. v. Kho, supra, 8 Cal.5th at p. 127 

[arbitration agreement unconscionable where the agreement’s 

contents and significance were unexplained by employer, and 

employee was required to sign the agreement to keep the job he

had held for three years].)

Based on the foregoing, we conclude the DRA was infected 

with some procedural unconscionability. 

b. Substantive Unconscionability

The court’s inquiry into whether a contract is substantively 

unconscionable “focus[es] on . . . ‘ “overly harsh” ’ or ‘ “one-sided” ’ 

results.” (Armendariz, supra, 24 Cal.4th at p. 114.) “[T]he 

paramount consideration in assessing [substantive] 

conscionability is mutuality.” (Abramson v. Juniper Networks, 

Inc. (2004) 115 Cal.App.4th 638, 657.)

Plaintiffs argue the DRA is substantively unconscionable 

because it primarily requires arbitration of the type of claims 

employees bring against employers. We disagree with this 

characterization of the agreement. The DRA states it applies to 

not only disputes about compensation, breaks and rest periods, 
23

termination, and harassment, but also to claims INO could bring 

against an employee regarding trade secrets and unfair 

competition. The DRA does not exclude any of INO’s claims 

against its employees. (Cf. Stirlen v. Supercuts, Inc. (1997) 51 

Cal.App.4th 1519, 1528 [the arbitration agreement was 

substantively unconscionable where it excluded the employer’s 

claims relating to the protection of the employer’s intellectual 

and other property and the enforcement of a postemployment 

covenant not to compete, which were to be litigated in state or 

federal court].)

Plaintiffs assert that the DRA’s lack of mutuality is 

illustrated by the fact that despite the DRA, INO can still seek 

injunctive relief from a court when the employee violates “ ‘In-NOut Burgers’ Associate Confidentiality and At-Will Employment 

Agreement’ ” (an agreement separate from the DRA at issue on 

appeal). In the event of breach, the confidentiality agreement 

states that INO “ ‘may apply to any court of law or equity having 

jurisdiction for injunctive relief’ ” because monetary damages 

would not effectively remedy the violation.

The injunctive relief provision that plaintiffs take issue 

with is not even part of the DRA. Rather, it is found in INO’s “At 

Will Employment Agreement,” which Valadez signed in 2007, 

years before she signed the DRA in 2013. (The record does not 

contain such an agreement signed by Lara.) As it was not 

contemporaneously executed, we do not construe the DRA and At 

Will Employment Agreement together, and the latter is not a 

consideration in our unconscionability analysis of the DRA. (See 

Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482, 491 

[construing an arbitration agreement and confidentiality 
24

agreement together pursuant to Civil Code section 1642 because 

they were contemporaneously executed].) 

Citing Viking River Cruises, Inc. v. Moriana (2022) 596 

U.S. __, __, 142 S.Ct. 1906 (Viking River), plaintiffs also argue

the arbitration agreement is substantively unconscionable

because it requires plaintiffs “ ‘to bring any dispute in arbitration 

on an individual basis only, and not on a . . . private attorney 

general basis.’ . . . Employers may not force employees to waive 

their right to bring a Private Attorney General Act [PAGA] 

claim.”

In Viking River, the United States Supreme Court reviewed 

an unconscionability challenge to an employment contract with 

an arbitration provision specifying that “in any arbitral 

proceeding, the parties could not bring any dispute as a class, 

collective, or representative PAGA action. It also contained a 

severability clause specifying that if the waiver was found 

invalid, any class, collective, representative, or PAGA action 

would presumptively be litigated in court. But under that 

severability clause, if any ‘portion’ of the waiver remained valid, 

it would be ‘enforced in arbitration.’ ” (Viking River, supra, 596 

U.S. at p. __, 142 S.Ct. at p. 1916.) Considering our state law 

rule articulated in Iskanian, supra, 59 Cal.4th 348, which 

prohibited the wholesale waiver of PAGA claims, the Viking 

River court held that the contract’s severability clause applied 

and the FAA compelled enforcement of the arbitration agreement 

as to the plaintiff’s individual Labor Code claims. (Id. at pp. __, 

142 S.Ct. at pp. 1922–1925; see Adolph v. Uber Technologies, Inc.

(2023) 14 Cal.5th 1104, 1113–1114.)

Like in Viking River, the DRA contains a severability 

clause, which states: “The Class Action Waiver and Private 
25

Attorney General Waiver, and any other provision of this 

Agreement, shall be severable in any case in which the dispute is 

filed as an individual action and severance is necessary to ensure 

that the individual action proceeds in arbitration.” Thus, as in 

Viking River, the DRA’s PAGA waiver is severable from the 

arbitration agreement, which remains enforceable against 

plaintiffs’ individual claims. 

Based on the foregoing, we conclude plaintiffs failed to 

show the DRA was substantively unconscionable, which is 

necessary to find it unenforceable. 

DISPOSITION

The judgment is affirmed. Defendant In-N-Out Burgers is 

awarded its costs on appeal.

EDMON, P. J.

We concur:

LAVIN, J.

EGERTON, J.