Filed 6/28/22 Mirzoyan v. West Coast Wound and Skin Care CA2/1

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

ANI MIRZOYAN,

Plaintiff and Respondent,

v.

WEST COAST WOUND AND SKIN 

CARE INC., et al.,

Defendants and Appellants;

ANTHONY SAIDIANI,

Defendant.

 B310901

 (Los Angeles County

 Super. Ct. No. 20BBCV00378)

APPEAL from an order of the Superior Court of 

Los Angeles County, William D. Stewart, Judge. Reversed and 

remanded with instructions. 

Clark Hill, Rafael G. Nendel-Flores and Monique A. Eginli 

for Defendants and Appellants West Coast Wound and Skin Care

Inc. and Lydia Alsa.
2

No appearance for Defendant Anthony Saidiani. 

Lyon Law, Geoffrey C. Lyon and Henry Harmeling IV for 

Plaintiff and Respondent.

____________________________

West Coast Wound and Skin Care Inc. (WCW) hired

Ani Mirzoyan as an administrative employee in November 2019. 

Before the commencement of Mirzoyan’s tenure at WCW, she and 

a representative of WCW executed an arbitration agreement

covering claims or controversies arising out of her employment. 

Mirzoyan alleges WCW wrongfully terminated her in April 2020.

Mirzoyan filed suit against WCW, Lydia Alsa, and Anthony 

Saidiani, alleging a wrongful termination claim and various 

causes of action under the California Fair Employment and 

Housing Act (FEHA, Gov. Code, § 12900 et seq.) and Labor Code 

sections 1102.5 and 1102.6. WCW and Alsa (collectively, 

appellants) moved to compel arbitration. The trial court denied 

the motion upon finding the arbitration agreement

unconscionable. Although the court found the agreement was 

procedurally unconscionable only to a limited degree as an 

adhesion contract, the court concluded the agreement was

substantively unconscionable because it requires only Mirzoyan 

to arbitrate her employment-related claims. Appellants seek 

review of the trial court’s order denying their motion.1 

The trial court did not err in finding that the arbitration 

agreement presented a low degree of procedural 

1 Although appellants identified Saidiani as a party to this 

appeal in their civil case information statement, Saidiani has not 

made an appearance before this court.
3

unconscionability. We, however, disagree with the court’s finding 

that the agreement requires only Mirzoyan to arbitrate her 

claims. Although the arbitration agreement was inartfully 

drafted, the text nonetheless reveals that both Mirzoyan and 

WCW agreed to submit their respective claims against each other 

to final and binding arbitration. 

As to Mirzoyan’s other claims of substantive 

unconscionability, we agree only as to two of them—a one-sided 

prearbitration condition requiring the employee but not the 

employer informally to attempt to negotiate her claims with the 

employer, and an attorney fees and costs provision requiring each 

side to bear its own attorney fees and costs incurred in 

arbitration. Because, however, these provisions are collateral to 

the purpose of the arbitration agreement and can be easily 

excised from the agreement, we sever them and otherwise enforce 

the arbitration agreement.

Lastly, we conclude Alsa may enforce the agreement as a 

third-party beneficiary, but remand to the trial court to 

determine, in the first instance, (a) whether Mirzoyan should be 

required to arbitrate her claims against Saidiani; and (b) whether

the proceedings should be stayed pending completion of 

arbitration.

In sum, we reverse the order denying appellants’ motion to 

compel and remand the matter for further proceedings consistent 

with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

We summarize only those facts that are relevant to this 

appeal.
4

1. Mirzoyan’s complaint

On June 15, 2020, Mirzoyan filed a complaint against 

WCW, Alsa, and Saidiani.2 In the complaint, Mirzoyan alleges

that from approximately November 2019 to her termination on or 

about April 17, 2020, she was employed as an “ ‘Intake 

Administrative Assistant’ ” at WCW. Mirzoyan avers that Alsa 

was a “Scheduler” at WCW who “began to verbally harass 

[Mirzoyan] daily based on [Mirzoyan’s] race” from on or about 

November 5, 2019 until Alsa was terminated in or around 

December 2019. Mirzoyan asserts that Saidiani was the chief 

operating officer of WCW, and that he “created an objectively 

hostile working environment for [Mirzoyan]” and discriminated 

against Mirzoyan because of her pregnancy. Mirzoyan alleges 

WCW terminated her on or about April 17, 2020 on account of her

pregnancy and in retaliation for making certain complaints of 

unlawful discrimination.

The complaint levels the following fourteen causes of 

action: (1) wrongful termination in violation of public policy 

against WCW; (2) gender/pregnancy discrimination under FEHA 

against WCW; (3) harassment based on gender/pregnancy under 

FEHA against WCW and Saidiani; (4) harassment based on 

disability under FEHA against WCW and Saidiani; (5) disability 

discrimination under FEHA against WCW; (6) retaliation for 

requesting and using accommodations for disabilities under 

FEHA against WCW; (7) failure to engage in a timely, good faith, 

interactive process to determine reasonable accommodation for 

2 Curiously, appellants did not designate the complaint for 

inclusion in the clerk’s transcript. We, sua sponte, take judicial 

notice of this pleading. (Evid. Code, §§ 452, subd. (d), 459.)
5

disability under FEHA against WCW; (8) failure to reasonably 

accommodate disabilities under FEHA against WCW; 

(9) pregnancy disability leave retaliation under FEHA against 

WCW; (10) pregnancy disability leave discrimination under 

FEHA against WCW; (11) harassment based on race under 

FEHA against Alsa; (12) failure to prevent and stop harassment, 

discrimination, and retaliation under FEHA against WCW; 

(13) retaliation for opposing violations of FEHA against WCW; 

and (14) whistleblower retaliation under Labor Code 

sections 1102.5 and 1102.6 against WCW. 

2. Appellants’ motion to compel arbitration and filings 

relating thereto

On December 18, 2020, appellants moved to compel 

Mirzoyan to submit her claims to arbitration.3 In support of the 

motion, appellants submitted the declaration of Dr. David Kay, 

WCW’s chief executive officer. Dr. Kay attested that WCW 

provided Mirzoyan with an employment agreement and an 

arbitration agreement, both of which Dr. Kay (on behalf of WCW) 

and Mirzoyan signed on or about November 4, 2019. These 

documents were attached to Dr. Kay’s declaration. 

In Mirzoyan’s opposition, she argued that the arbitration 

agreement is unenforceable because it is procedurally and 

substantively unconscionable. Mirzoyan did not contest 

appellants’ assertions that (a) she and WCW executed the 

arbitration agreement, and (b) the agreement covers the claims 

alleged in her complaint. 

3 Although Saidiani appeared in the trial court 

proceedings, he did not join appellants’ motion to compel 

arbitration. 
6

Appellants filed a reply in support of their motion to 

compel. 

3. The trial court’s order denying the motion to compel 

arbitration and appellants’ notice of appeal

On January 22, 2021, the trial court heard and denied

appellants’ motion to compel arbitration. The court found the 

arbitration agreement “does reflect some limited degree of 

procedural unconscionability” because it is a contract of adhesion. 

The court also concluded the arbitration agreement is 

substantively unconscionable because it “lacks mutuality 

between the parties.” Specifically, the court found there exists

under paragraphs 1 and 2 of the arbitration agreement “an 

obligation binding [Mirzoyan] to bring all workplace concerns and 

disputes to company attention, and later arbitration, but no 

reciprocal obligation binding WCW.” The court declined to sever 

these unconscionable provisions from, and enforce the remainder 

of, the arbitration agreement on the ground that “an agreement’s 

lack of mutuality creates an ‘unconscionable taint’ that 

permeates the entire agreement . . . .” 

Appellants timely appealed the trial court’s order denying 

their motion.4

STANDARDS OF REVIEW

“ ‘In ruling on a motion to compel arbitration, the trial 

court shall order parties to arbitrate “if it determines that an 

agreement to arbitrate the controversy exists . . . .” [Citation.]

4 “The denial of a motion to compel arbitration is an 

appealable order.” (Hernandez v. Ross Stores, Inc. (2016) 

7 Cal.App.5th 171, 176; Code Civ. Proc., § 1294, subd. (a).)
7

“[T]he party seeking arbitration bears the burden of proving the 

existence of an arbitration agreement by a preponderance of the 

evidence, and the party opposing arbitration bears the burden of 

proving by a preponderance of the evidence any defense . . . .”

[Citation.]’ ” (Western Bagel Co., Inc. v. Superior Court (2021)

66 Cal.App.5th 649, 662 (Western Bagel Co., Inc.).)

Unconscionability is a defense to enforcement of an 

arbitration agreement. (See Lange v. Monster Energy Co. (2020) 

46 Cal.App.5th 436, 444–445 (Lange).) “ ‘ “[U]nconscionability 

has both a ‘procedural’ and a ‘substantive’ element,” the former 

focusing on “ ‘oppression’ ” or “ ‘surprise’ ” due to unequal 

bargaining power, the latter on “ ‘overly harsh’ ” or “ ‘one-sided’ ”

results. [Citation.] “The prevailing view is that [procedural and 

substantive unconscionability] must both be present in order for a 

court to exercise its discretion to refuse to enforce a contract or 

clause under the doctrine of unconscionability.” [Citation.] But 

they need not be present in the same degree. . . . . [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.’ [Citation.]” (Id.

at p. 445.) “[I]f a trial court concludes that an arbitration 

agreement contains unconscionable terms, it then ‘must 

determine whether these terms should be severed, or whether 

instead the arbitration agreement as a whole should be 

invalidated.’ [Citation.]” (Id. at pp. 452–453.)

“ ‘In evaluating an order denying a motion to compel 

arbitration, “ ‘ “we review the arbitration agreement de novo to 

determine whether it is legally enforceable, applying general 

principles of California contract law.” ’ ” [Citation.]’ ” (Western 

Bagel Co., Inc., supra, 66 Cal.App.5th at p. 662.) “We review a 
8

trial court’s order declining to sever . . . unconscionable provisions 

from an arbitration agreement for abuse of discretion.” (Lange, 

supra, 46 Cal.App.5th at p. 453.)

DISCUSSION

A. The Arbitration Agreement Possesses Some Limited 

Degree of Procedural Unconscionability

The trial court did not err in finding that the arbitration 

agreement “does reflect some limited degree of procedural 

unconscionability” because it is an adhesion contract. Appellants 

do not challenge the trial court’s finding that the arbitration 

agreement is an adhesion contract. In addition, Dr. Kay

admitted in his declaration that WCW’s offer of employment to 

Mirzoyan “was conditional based on [Mirzoyan] executing” the 

“standard stand-alone” arbitration agreement. This evidence 

indicates WCW presented the arbitration agreement to Mirzoyan 

as a condition of employment without any opportunity to 

negotiate its standardized terms.

Mirzoyan intimates that the trial court minimized the

degree to which the agreement is procedurally unconscionable. 

Specifically, she argues the agreement contains an element of 

surprise because “the recitals and Par[agraph] 5 are intended to 

cause the reader to think the agreement requires all parties to 

mutually arbitrate all claims, when . . . only the employee’s 

claims ‘shall’ go to arbitration, while the employer’s ‘may.’ ” This 

argument fails because, as we explain in Discussion, part B, post, 

the arbitration agreement obligates her and WCW to submit 

their respective claims against each other to binding arbitration.

Because the only indicium of procedural unconscionability 

presented by the arbitration agreement is its status as a contract 
9

of adhesion, the trial court did not err in finding the agreement 

presents a low degree of procedural unconscionability. 

(See Serpa v. California Surety Investigations, Inc. (2013) 

215 Cal.App.4th 695, 704 [“It is well settled that adhesion 

contracts in the employment context, that is, those contracts 

offered to employees on a take-it-or-leave-it basis, typically 

contain some aspects of procedural unconscionability. . . . [¶] . . .

When, as here, there is no other indication of oppression or 

surprise, ‘the degree of procedural unconscionability of an 

adhesion agreement is low . . . .’ ”].)

B. The Arbitration Agreement Is Mutually Binding

The crux of this appeal is whether the trial court erred in 

concluding the arbitration agreement obligates Mirzoyan but not 

WCW to arbitrate claims. The court’s conclusion in that regard 

hinged on its construction of paragraphs 1 and 2 of the 

agreement, which provide:

“1. Employee is obligated to bring all workplace 

concern(s) or dispute(s) (‘Issue’) to the attention of Company 

management, in writing, for possible resolution. The writing 

should contain a brief description of the issue, the parties 

involved, and relevant date(s). Company response, if any, will be 

provided to the Employee within thirty (30) days of the date the 

issue is brought to Company’s attention.

“2. If after thirty (30) days the Employee is not satisfied 

with Company response, then the Issue, which includes but is not 

limited to, any and all claims or controversies arising out of 

Employee’s application or candidacy for employment, 

employment, or cessation of employment with the Company, shall 

be resolved through final and binding arbitration pursuant to the 

National Rules for the Resolution of Employment Disputes of the 
10

American Arbitration Association (‘AAA’) in existence as of the 

time the dispute arises. A copy of the Rules can be obtained from 

the AAA’s website, adr.org/Dispute Resolution

Services/Arbitration/Mediation/Employment Rules, or will be 

provided to you upon request. Arbitration may be initiated by 

either the Employee or the Company in accordance with the

procedures specified in those Rules. The claims which are subject 

to arbitration shall include, but not be limited to, any and all 

employment-related claims or controversies, such as breach of 

employment agreement, breach of the covenant of good faith and 

fair dealing, negligent supervision or hiring, wrongful discharge 

in violation of public policy, unpaid wages of overtime under the 

state and federal wage payment laws, breach of privacy claims, 

intentional or negligent infliction of emotional distress claims, 

fraud, defamation, and divulgence of trade secrets.” 

At first blush, paragraph 1 and the first sentence of 

paragraph 2 suggest the arbitration contemplated by this 

agreement encompasses only claims raised by Mirzoyan after she 

had presented them to WCW. The remainder of paragraph 2 and 

other text in the arbitration agreement, however, demonstrate

that the parties intended to be mutually bound to arbitrate any 

disputes between them relating to Mirzoyan’s employment.5 

(See Quantification Settlement Agreement Cases (2011) 

201 Cal.App.4th 758, 799 [“ ‘[E]ven if one provision of a contract 

is clear and explicit, it does not follow that that portion alone 

5 As we explain in Discussion, part C.1, post, however,

paragraphs 1 and 2 obligate only Mirzoyan to participate in the

prearbitration dispute resolution mechanism before submitting

her claims to arbitration.
11

must govern its interpretation; the whole of the contract must be 

taken together so as to give effect to every part.’ ”].)

First, the provision allowing “[a]rbitration [to] be initiated 

by either the Employee or the Company in accordance with the 

procedures specified in [the aforementioned AAA] Rules”

supports this conclusion.

6 AAA rule 4 indicates that in the 

absence of the parties’ “joint request for arbitration,” arbitration 

must be initiated by filing a “Demand” that raises a “claim” to 

which the other party may respond.7 If WCW’s claims were not 

covered by the arbitration agreement, then, if WCW exercised its 

contractual right to initiate arbitration by presenting a claim 

against Mirzoyan, she could simply refuse to participate in the 

arbitration and insist that WCW file a court action. (See Holley 

v. Silverado Senior Living Management, Inc. (2020)

6 We use the shorthand “AAA rules” to refer to these 

procedures.

7 In support of their motion to compel, appellants 

requested judicial notice of the AAA rules, a copy of which was 

attached to their request. The trial court did not rule on this 

request for judicial notice, presumably because its denial of the

underlying motion to compel mooted the request. We take 

judicial notice of the AAA rules because Mirzoyan does not 

dispute their authenticity on appeal, there is no indication she 

did so below, and the AAA rules “are not subject to dispute and 

are capable of immediate and accurate determination by resort to 

sources of reasonably indisputable accuracy.” (See Evid. Code, 

§§ 452, subd. (h), 459; Emerald Aero, LLC v. Kaplan (2017) 

9 Cal.App.5th 1125, 1132, fn. 5 [sua sponte taking judicial notice 

of arbitration association rules]; San Francisco CDC LLC v. 

Webcor Construction L.P. (2021) 62 Cal.App.5th 266, 281, fn. 5 

[taking judicial notice of a document in part because its 

authenticity had not been challenged].) 
12

53 Cal.App.5th 197, 201 [“ ‘[P]arties can only be compelled to 

arbitrate when they have agreed to do so. [Citation.] 

“Arbitration is a matter of consent, not coercion . . . .” ’ ”].) Thus, 

we cannot construe the arbitration agreement as encompassing

only Mirzoyan’s claims without running afoul of our obligation to 

“ ‘avoid [an] interpretation[ ] that render[s] any portion 

superfluous, void or inexplicable.’ [Citation.]” (See United 

Farmers Agents Assn., Inc. v. Farmers Group, Inc. (2019)

32 Cal.App.5th 478, 495 (United Farmers Agents Assn., Inc.).)

Second, paragraph 2 provides a nonexhaustive list of “[t]he 

claims which are subject to arbitration . . . .” Several of the 

claims listed are those that an employee would likely assert, such 

as “wrongful discharge in violation of public policy” and 

“unpaid . . . overtime under the state and federal wage payment 

laws.” Nevertheless, the list includes a claim that only an 

employer would be expected to raise—i.e., “divulgence of 

trade secrets.” (See Mercuro v. Superior Court (2002) 

96 Cal.App.4th 167, 171, 176 [identifying claims for “ ‘the use 

and/or unauthorized disclosure of trade secrets or confidential 

information’ ” as causes of action the employer “is most likely to 

bring against its employees”].) Accordingly, this aspect of the 

agreement further evinces the parties’ intention to be bound to

arbitrate Mirzoyan’s and WCW’s claims.

Third, paragraph 5 employs language suggesting the 

parties intended that the arbitration agreement be mutually 

binding. Paragraph 5 provides: “The parties to this Agreement 

intend to arbitrate any disputes between them on an individual

basis only. To the fullest extent permitted by law, the parties

agree that they shall not join or consolidate claims submitted for 

arbitration under this Agreement with those of any other 
13

persons, and that no form of class, collective, or representative 

action shall be maintained without the mutual consent of the 

parties.” (Italics added.) 

Paragraph 5 would not have referred to “the parties[’]” 

intent to arbitrate “any disputes between them” and barred

either side from joining or consolidating “claims submitted for 

arbitration” if only Mirzoyan were obligated to submit her claims 

to final and binding arbitration. Moreover, the fact that the 

following paragraph states that “Employee will not be disciplined 

or retaliated against by the Company if Employee seeks to pursue 

claims on a class, collective, or representative basis” further

supports the inference that the agreement is mutually binding, 

given that the two provisions differentiate between (1) the rights 

and obligations of “the parties” vis-à-vis joinder and (2) those of 

just “Employee”—i.e., Mirzoyan. (Italics added.) (Cf. Wolf v. 

Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107,

1111–1112, 1134–1137 [rejecting the plaintiffs’ argument that 

the term “Purchaser” in an agreement included a contracting 

party’s subsidiaries in part because the agreement’s definition of 

“Purchaser” did not include subsidiaries and, “[w]hen the parties 

intended to identify ‘subsidiaries[ ]’ [elsewhere in the agreement,] 

they knew how to do so”].)

Mirzoyan contends that “Paragraph No. 5 applies to class, 

collective and representative actions” and “[o]nly an employee 

would bring a class, collective or representative action, not an 

employer against the employee.” Mirzoyan overlooks the text in 

paragraph 5 that bars not only class, collective, or representative 

actions, but any joinder or consolidation of claims submitted to

arbitration, thus prohibiting WCW from joining claims against 

Mirzoyan with claims belonging to persons other than WCW. 
14

Lastly, the arbitration agreement’s recitals confirm our 

interpretation of the arbitration agreement as being mutual. One 

of the recitals states, “Employee and Company desire to resolve 

any and all future disputes between them in the most expeditious 

and economical fashion possible” and “Employee and Company 

recognize and agree that arbitration of any and all disputes 

between them through binding, impartial arbitration is in the 

best interests of both parties . . . .” (Italics added.) (See Burch v. 

Premier Homes, LLC (2011) 199 Cal.App.4th 730, 744 (Burch)

[indicating that an agreement’s recitals may provide evidence of 

the contracting parties’ intent].)

In sum, when the arbitration agreement’s terms are read 

as a whole, it is evident that each side agreed to submit its or her

respective employment-related claims to final and binding 

arbitration. The trial court erred in holding that the arbitration 

agreement is substantively unconscionable because it lacks 

mutuality.

C. Certain Provisions of the Arbitration Agreement Are 

Substantively Unconscionable

1. The prearbitration dispute resolution mechanism is 

substantively unconscionable

Paragraph 1 of the arbitration agreement requires the 

employee to “bring all workplace concern(s) or dispute(s) . . . to 

the attention of Company management” “for possible resolution”

in a writing “contain[ing] a brief description of the issue, the 

parties involved, and relevant date(s),” and provides that the 

“Company[’s] response, if any” will be provided to the employee 

within 30 days thereafter. The first sentence of paragraph 2 

authorizes the employee to arbitrate the workplace concern or 
15

dispute “[i]f after thirty (30) days the Employee is not satisfied 

with Company response . . . .” The arbitration agreement does 

not contain any language requiring WCW to discuss its claims 

with Mirzoyan before resorting to arbitration. 

“While on [their] face, th[ese] provision[s] may present a 

laudable mechanism for resolving employment disputes

informally,” their “unilateral nature” “suggests that [WCW] 

would receive a ‘free peek’ at [Mirzoyan’s] case, thereby obtaining 

an advantage if and when [she] were to later demand 

arbitration.” (See Nyulassy v. Lockheed Martin Corp. (2004) 

120 Cal.App.4th 1267, 1282–1283 (Nyulassy); see also id. at 

p. 1273 & fn. 4 [indicating that the arbitration clause in Nyulassy

required the plaintiff-employee, but not the defendant-employer, 

to adhere to the prearbitration dispute resolution procedure].) 

Given the unfairly one-sided nature of the arbitration 

agreement’s prearbitration dispute resolution mechanism, and 

appellants’ failure to offer any justification for it after Mirzoyan 

raised the issue in her respondent’s brief, we conclude this 

prearbitration dispute resolution mechanism is substantively 

unconscionable. (See id. at pp. 1283, 1287–1288 [concluding that 

an arbitration clause was substantively unconscionable in part 

because of its one-sided prearbitration dispute resolution

mechanism]; Carmona v. Lincoln Millennium Car Wash, Inc.

(2014) 226 Cal.App.4th 74, 78–79, 81, 89–90 [concluding that a 

“unilateral ‘free peek’ provision” was one of several 

“unconscionable provisions” in an arbitration agreement]; Lange, 

supra, 46 Cal.App.5th at p. 447 [“[S]ubstantive unconscionability 

‘pertains to the fairness of the agreement’s actual terms.’ 

[Citation.] . . . ‘ “[U]nconscionability turns not only on a ‘one-
16

sided’ result, but also on an absence of ‘justification’ for 

it . . . .” ’ ”].)

2. The attorney fees/costs provision is substantively 

unconscionable

Paragraph 7 of the arbitration agreement provides in 

pertinent part: “The parties . . . shall be responsible for their own 

attorneys’ fees and costs incurred in presenting their case to the 

Arbitrator.” Mirzoyan argues that this provision is substantively 

unconscionable because it bars her from invoking her statutory 

right to seek attorney fees and costs if she prevails on her claims. 

We agree.

Before reaching Mirzoyan’s challenge to this provision, we 

address a related issue. Mirzoyan points out that 

paragraph 18(c) of the employment agreement provides: “If either 

party employs attorneys to enforce any rights arising out of or 

relating to this agreement, the losing party shall reimburse the 

prevailing party for its reasonable attorneys’ fees.” The trial 

court rejected Mirzoyan’s reliance on paragraph 18(c), reasoning 

that (a) she had “fail[ed] to show that either the Arbitration 

Agreement or the Employment Agreement contain provisions 

providing for any supplantation of the Arbitration Agreement’s 

attorney fee provision” found in paragraph 7, and (b) “[t]he 

Arbitration Agreement . . . provides in paragraph 12 [that it] . . . 

supersede[s] all prior agreements or understandings between the 

parties concerning the subject matter of arbitration.”8

8 (See also Code Civ. Proc., § 1856, subd. (a) [“Terms set 

forth in a writing intended by the parties as a final expression of 

their agreement with respect to the terms included therein 
17

Mirzoyan does not contest the trial court’s conclusion that 

paragraph 7 of the arbitration agreement supersedes

paragraph 18(c) of the employment agreement. Accordingly, 

we proceed on the assumption that paragraph 7—and not 

paragraph 18(c)—governs the parties’ rights vis-à-vis attorney 

fees and costs. (See Tokio Marine & Fire Ins. Corp. v. Western 

Pacific Roofing Corp. (1999) 75 Cal.App.4th 110, 118 [“[T]he 

general rule [is] that trial court rulings are presumed correct.”]; 

In re D.N. (2020) 56 Cal.App.5th 741, 767 [“ ‘[I]t is as much the 

duty of the respondent to assist the [appellate] court upon the 

appeal as it is to properly present a case in the first instance, in 

the court below.’ ”].)

As previously noted, paragraph 7 requires both parties to 

bear their respective attorney fees and costs, regardless of 

whether Mirzoyan prevails. Conversely, FEHA provides that 

“the court, in its discretion, may award to the prevailing party . . . 

reasonable attorney’s fees and costs, including expert witness 

fees, except that . . . a prevailing defendant shall not be awarded 

fees and costs unless the court finds the action was frivolous, 

unreasonable, or groundless when brought, or the plaintiff 

continued to litigate after it clearly became so.” (See Gov. Code, 

§ 12965, subd. (c)(6).) 

Labor Code section 1102.5 authorizes “[t]he court . . . to 

award reasonable attorney’s fees to a plaintiff who brings a 

successful action for a violation of” that statute. (See Lab. Code, 

§ 1102.5, subd. (j).)

may not be contradicted by evidence of a prior agreement or of a 

contemporaneous oral agreement.”].)
18

Paragraph 7’s attorney fees and costs provision is thus

substantively unconscionable because it abridges Mirzoyan’s 

statutory rights to seek attorney fees and costs as a prevailing 

party. (See Serafin v. Balco Properties Ltd., LLC (2015)

235 Cal.App.4th 165, 183 (Serafin) [“By requiring both parties to 

bear their own attorney fees and costs, the provision before us . . .

runs counter to FEHA which allows a successful plaintiff to 

recover attorney fees and costs from the employer (but does not 

similarly allow an employer to recover fees and costs from an 

employee in most cases). [Citation.] Such a modification of 

California law is inappropriate . . . as it has the effect of denying 

a plaintiff the rights and remedies he or she would have if he or 

she were litigating his or her claims in court.”].)

Appellants do not dispute the general proposition that a 

contractual provision requiring an employee to bear his or her 

own attorney fees and costs is substantively unconscionable. 

Instead, they assert that the following language from 

paragraph 8 empowers the arbitrator to order appellants to pay

Mirzoyan’s attorney fees and costs if she prevails: “The 

Arbitrator shall have the power to award all legal relief available 

in a court of law, including any and all damages that may be 

available for any of the claims asserted.” 

Appellants’ resort to paragraph 8 fails. Although the

American Rule “provides that each party to a lawsuit must 

ordinarily pay his or her own attorney fees,” there are several 

exceptions to this rule, including when “ ‘fees are specifically 

provided for by statute . . . .’ ” (See Tract 19051 Homeowners 

Assn. v. Kemp (2015) 60 Cal.4th 1135, 1142 & fn. 2.) In addition, 

a prevailing party is typically entitled to costs as a matter of 

right. (See Code Civ. Proc., § 1032, subd. (b).) By its terms, the 
19

fees/costs clause of paragraph 7 bars Mirzoyan from invoking 

exceptions to the American Rule and obtaining a cost award as a 

prevailing party via the Code of Civil Procedure and/or FEHA,

given that the contractual provision requires each side to bear its 

own attorney fees and costs. If paragraph 8 were interpreted to

allow Mirzoyan to nevertheless seek recovery of attorney fees and 

costs, then the fees/costs provision of paragraph 7 becomes

nugatory. We cannot countenance such a construction of the 

contract. (See United Farmers Agents Assn., Inc., supra,

32 Cal.App.5th at p. 495.)

Appellants further maintain that AAA rule 39(d) 

safeguards Mirzoyan’s right to seek attorney fees and costs if she 

prevails in the arbitration. As pertinent here, that rule provides: 

“The arbitrator may grant any remedy or relief that would have 

been available to the parties had the matter been heard in court 

including awards of attorney’s fees and costs, in accordance with 

applicable law.” It appears that appellants are claiming that

rule 39(d) should be treated as a term of the arbitration 

agreement. Regardless of whether that premise is valid, it would 

not resuscitate the enforceability of the fees/costs provision of 

paragraph 7. To hold otherwise would, once again, prevent the 

attorney fees/costs provision from serving any purpose.

9

9 AAA rule 1 provides that “[i]f a party establishes that an 

adverse material inconsistency exists between the arbitration 

agreement and these rules, the arbitrator shall apply these 

rules.” Appellants do not contend that AAA rule 1 invalidates the 

portion of paragraph 7 that precludes Mirzoyan from obtaining 

an award of attorney fees and costs. 
20

For these reasons, we conclude that the portion of 

paragraph 7 requiring each side to bear its own attorney fees and 

costs is substantively unconscionable.

3. The clauses providing that the arbitral award will be 

“final and binding” are not substantively 

unconscionable

Mirzoyan claims the arbitration agreement’s provisions 

requiring the parties to submit to final and binding arbitration

operate as a waiver of her right to vacate an award on the ground

that “ ‘[t]he arbitrators exceeded their powers and the award 

cannot be corrected without affecting the merits of the decision 

upon the controversy submitted.’ ” Statutory and case law do not 

support this contention.

“[T]he ‘final and binding’ language of [an] arbitration 

agreement does not preclude judicial review of an arbitration 

award pursuant to Code of Civil Procedure sections 1286.2 

and 1286.6.” (See Serafin, supra, 235 Cal.App.4th at p. 184.) In 

turn, Code of Civil Procedure section 1286.2, subdivision (a)(4) 

authorizes the relief Mirzoyan claims is necessary to safeguard 

her rights, i.e., a court shall vacate an award if “[t]he arbitrators 

exceeded their powers and the award cannot be corrected without 

affecting the merits of the decision upon the controversy 

submitted.” (Code Civ. Proc., § 1286.2, subd. (a)(4).) 

Appellants claim the Federal Arbitration Act’s judicial 

review provisions found in title 9 United States Code sections 9 

and 10 govern any future petition to vacate an arbitral award. 

Much like Code of Civil Procedure section 1286.2, title 9 United 

States Code section 10 would allow the parties to seek vacation of 

an award on the ground that “the arbitrators exceeded their 

powers . . . .” (See 9 U.S.C. § 10(a)(4).) Whether this federal
21

procedure would apply to a petition to vacate filed in this matter

is not altogether clear,

10 and is an issue we need not decide. 

Even if the federal judicial review procedures were applicable, 

the parties’ obligation to submit to final and binding arbitration 

would not be substantively unconscionable because they could

petition to vacate the award under title 9 United States Code 

section 10.

D. The Prearbitration Dispute Resolution and Attorney 

Fees/Costs Provisions Are Severable from the 

Arbitration Agreement

Paragraph 11 of the arbitration agreement provides: “If, 

for any reason, any provision of this Agreement is determined by 

an arbitrator or a court of competent jurisdiction to be illegal or 

otherwise invalid, all other provisions of this agreement shall 

remain in full force and effect, insofar as they are consistent with 

existing law.”

“Civil Code section 1670.5, subdivision (a) states that ‘[i]f 

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.’ ” (Lange, supra, 46 Cal.App.5th 

at p. 452.)

10 Paragraph 9 of the arbitration agreement provides that 

the “Agreement is entered into under the Federal Arbitration 

Act, and shall be interpreted and construed in accordance with 

the law and procedures developed under that statute.” 
22

In determining whether to sever one or more 

unconscionable provisions from a contract, “ ‘[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.’ [Citation.]” (See Lange, supra, 46 Cal.App.5th at 

p. 454.)

“ ‘[T]he strong legislative and judicial preference is to sever 

the offending term and enforce the balance of the agreement: 

Although “[Civil Code section 1670.5] 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 agreement is ‘permeated’ by 

unconscionability.” ’ [Citations.]” (See Lange, supra, 

46 Cal.App.5th at p. 453.)

The trial court concluded that the entire arbitration 

agreement was unenforceable because its “lack of mutuality 

creates an ‘unconscionable taint’ that permeates the entire 

agreement . . . .” The court found that this taint could be purged 

only “through augmentation rather than merely severing or 

restrict[ing] the agreement: an action that the court is not 

authorized to perform.” The trial court did not consider whether

the arbitration agreement would have been enforceable if its only 

two substantively unconscionable aspects were the prearbitration 

dispute resolution mechanism and the attorney fees/costs 

provision addressed in Discussion, parts C.1 & C.2, ante. 
23

We conclude, as a matter of law, that these two features of 

the arbitration agreement can be severed from the remainder of 

the agreement. (See Lange, supra, 46 Cal.App.5th at p. 453 

[holding that although the trial court’s decision whether to sever 

offending clauses from an arbitration agreement is reviewed for 

abuse of discretion, that discretion is constrained by “ ‘applicable 

legal principles’ ”].)

Although the prearbitration dispute resolution process is 

designed to “resolv[e] employment disputes informally” (see 

Nyulassy, supra, 120 Cal.App.4th at p. 1282), it is nonetheless 

collateral to the main purpose of the arbitration agreement. 

Assuming arguendo paragraphs 1 and 2 of the arbitration 

agreement would preclude Mirzoyan from initiating arbitration 

until she had presented her claims to WCW in accordance with 

the procedures delineated in those two paragraphs, the text of 

the arbitration agreement nonetheless indicates that compelling

her participation in this prearbitration dispute resolution 

mechanism is not the central purpose of the contract. 

Specifically, the recitals indicate the principal objective of the 

agreement is to enable the parties “to resolve any and all future 

disputes between them in the most expeditious and economical 

fashion possible,” that is, “through binding, impartial 

arbitration.”11 (See Burch, supra, 199 Cal.App.4th at p. 744 

11 In their appellate briefing, neither side addresses

whether Mirzoyan participated in the arbitration agreement’s 

prearbitration dispute resolution process before she filed suit. 

Additionally, appellants do not claim that any failure on

Mirzoyan’s part to comply with these prearbitration dispute 

resolution procedures would bar her from arbitrating her claims 

against them. 
24

[indicating that an agreement’s recitals may provide evidence of 

the contracting parties’ intent].)

The portion of paragraph 7 that requires each side to bear 

its own attorney fees and costs is a collateral provision, given 

that “the main purpose of the arbitration agreement [is] not to 

regulate costs, but to provide a mechanism to resolve disputes.”

(See Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 92; see 

also Serafin, supra, 235 Cal.App.4th at pp. 183–184 [concluding 

that a provision requiring each party to bear its own attorney 

fees and costs was collateral to the main purpose of an 

arbitration agreement].) 

We agree with appellants that “ ‘the illegal provision[s] can 

be extirpated from the contract by means of severance . . . .’ 

[Citation.]” (See Lange, supra, 46 Cal.App.5th at p. 454.) As 

appellants demonstrate in their opening brief, the prearbitration 

dispute resolution mechanism can be readily excised from the 

contract by deleting the entirety of paragraph 1 and the first half 

of the introduction sentence of paragraph 2, such that the first 

operative provision of the arbitration agreement would begin 

with: “[A]ny and all claims or controversies arising out of 

Employee’s application or candidacy for employment, 

employment, or cessation of employment with the Company, shall 

be resolved through final and binding arbitration . . . .”12 The 

attorney fees and costs provision may be removed by simply

12 In offering these proposed deletions to the arbitration 

agreement, appellants were actually attempting to show that any 

lack of mutuality could be removed from the agreement. 

Nevertheless, the deletions they proposed have the effect of 

excising the prearbitration dispute resolution mechanism from 

the arbitration agreement.
25

deleting the underlined text from the second sentence of 

paragraph 7: “The parties may be represented by their own 

attorneys in the arbitration proceeding and shall be responsible 

for their own attorneys’ fees and costs incurred in presenting 

their case to the Arbitrator.” (Underscoring added.) No text 

needs to be added to the arbitration agreement to purge it of 

illegality.

Additionally, we observe that the presence of more than 

one unconscionable provision does not, per se, establish that 

severance is improper. (See Lange, supra, 46 Cal.App.5th at 

pp. 454–455.) Rather, “ ‘the dispositive question is whether “the 

central purpose of the contract” is so tainted with illegality that 

there is no lawful object of the contract to enforce.’ [Citation.]” 

(Id. at p. 455.) As we have explained above, the answer to that 

dispositive question is “no.”

E. Appellants’ Request for an Order Compelling 

Mirzoyan to Arbitrate Her Claims Against Saidiani 

and for a Stay Should Be Addressed by the Trial 

Court Upon Remand

Appellants ask us to “reverse the Trial Court’s ruling and 

remand this case with instructions to enter a new order 

compelling [Mirzoyan] to arbitrate her claims against all

Defendants and staying all Trial Court proceedings pending 

completion of arbitration.” (Italics added.) Appellants argue that

even though Alsa and Saidiani are not signatories to the 

arbitration agreement, those two defendants may compel 

Mirzoyan to arbitrate her claims against them. 

We agree that Alsa may enforce the terms of the

arbitration agreement against Mirzoyan. The arbitration 

agreement provides that it is “intended to apply to any claim 
26

Employee may have against any of the Company’s officers, 

directors, employees, agents, or any of its affiliated or related 

entities . . . .” In her complaint, Mirzoyan alleges that Alsa was a 

“Scheduler” at WCW when she “verbally harass[ed Mirzoyan] 

daily based on [Mirzoyan’s] race . . . . ” The pleading indicates 

the job title “Scheduler” refers to a position of employment at 

WCW. Therefore, Alsa is a third-party beneficiary of the 

arbitration agreement.

13

Although appellants asked the trial court for an order 

compelling Mirzoyan to arbitrate her claims against all named 

defendants, the court did not address whether Mirzoyan’s claims 

against Saidiani are subject to arbitration because it denied the 

entirety of the motion to compel. For that same reason, the trial

court had no occasion to address appellants’ request to stay the 

action pending arbitration. 

13 (See Cargill, Inc. v. Souza (2011) 201 Cal.App.4th 962, 

967 [holding that “ ‘ “[t]he test for determining whether a 

contract was made for the benefit of a third person is whether an 

intent to benefit a third person appears from the terms of the 

contract[,]” ’ ” and that a third-party beneficiary “may enforce the 

contract”]; Michaelis v. Schori (1993) 20 Cal.App.4th 133, 135, 

139 [holding that a nonsignatory employee or associate could 

invoke an arbitration agreement against a plaintiff who was a 

party thereto because the contract provided that all claims 

against the employees and associates of the defendant-signatory 

must be arbitrated]; Harris v. Superior Court (1986) 188 

Cal.App.3d 475, 477, 478–479 [holding that a doctor-employee of 

a professional corporation was a third-party beneficiary of an 

arbitration agreement that covered claims against the 

professional corporation and its “ ‘employees or other contracting 

health professionals’ ”].) 
27

Because appellants do not explain why—despite Saidiani’s 

failure to join their motion to compel—Mirzoyan should be

ordered to arbitrate her claims against Saidiani, we decline to 

reach this issue. (See Hernandez v. First Student, Inc. (2019) 

37 Cal.App.5th 270, 277 [“ ‘We are not bound to develop 

appellants’ arguments for them.’ ”].) We leave that matter for the 

trial court to decide in the first instance upon remand. Because 

the resolution of that issue affects whether a stay of all or only 

part of the trial court proceedings may be appropriate, 

appellants’ request for a stay is not ripe for our review. (See 

Wilson & Wilson v. City Council of Redwood City (2011) 

191 Cal.App.4th 1559, 1573 [“ ‘A controversy is “ripe” when it has 

reached, but has not passed, the point that the facts have 

sufficiently congealed to permit an intelligent and useful decision 

to be made.’ ”].) On remand, the trial court may address the 

propriety of appellants’ request for a stay in the first instance as 

well.
28

DISPOSITION

We reverse the trial court’s order denying the motion to 

compel arbitration. Upon remand, the trial court shall: 

(a) determine in the first instance whether to compel 

Ani Mirzoyan to arbitrate her claims against Anthony Saidiani, 

and (b) undertake further proceedings consistent with this 

opinion. The parties are to bear their own costs on appeal.

NOT TO BE PUBLISHED.

BENDIX, J.

We concur:

ROTHSCHILD, P. J.

CHANEY, J.