Filed 6/23/22 Sellers v. World Financial Group CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for 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

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

BRITTANY SELLERS,

Plaintiff and Respondent,

v.

WORLD FINANCIAL GROUP, INC.,

et al.

Defendants and Appellants.

 D078934

 (Super. Ct. No. 37-2019-

00061048-CU-OE-CTL)

APPEAL from an order of the Superior Court of San Diego County, 

Katherine Bacal, Judge. Affirmed.

Ogletree, Deakins, Nash, Smoak & Stewart, Spencer C. Skeen, Tim L. 

Johnson, Jesse C. Ferrantella, and Cameron O. Flynn for Defendants and 

Appellants.

Blanchard, Krasner & French, David C. Hawkes; Law Office of David 

A. Huch and David A. Huch for Plaintiff and Respondent.

INTRODUCTION

Brittany Sellers brought a class action lawsuit against World Financial 

Group, Inc. and World Financial Group Insurance Agency, Inc. (together, 
2

WFG), asserting WFG unlawfully misclassified her and other WFG 

“associates” as independent contractors to avoid compliance with the 

California Labor Code. WFG moved to compel individual arbitration of 

Sellers’ claims pursuant to the Federal Arbitration Act (FAA) and Code of 

Civil Procedure section 1281.2, to dismiss the putative class claims, and to 

stay the claim for civil penalties under the Labor Code Private Attorneys

General Act of 2004 (PAGA) (Lab. Code,1 § 2698 et seq.) pending the outcome 

of arbitration. 

WFG asserted Sellers was bound by a valid and enforceable arbitration 

provision contained in an agreement she electronically signed via DocuSign 

to commence her relationship with WFG. The trial court denied WFG’s 

motion to compel arbitration, finding the arbitration provision was both 

procedurally and substantively unconscionable. Because it further found the 

unconscionability permeated the arbitration provision, the trial court 

declined to sever the unconscionable terms, and determined the arbitration 

provision was unenforceable as a whole. On our independent review, we 

agree with the trial court’s order denying WFG’s motion to compel 

arbitration. We therefore affirm.

FACTUAL AND PROCEDURAL BACKGROUND

I.

Sellers’ Complaint

As alleged in the operative Second Amended Complaint (SAC), WFG is

“a multi-level marketing company selling investment, insurance, and various 

other financial products through a network of distributors.” It operates 

1 All further unspecified statutory references are to the Labor Code. 
3

“nation-wide” with “approximately 3,500 offices in the United States, 

including many in California.”

Sellers worked for WFG as an “ ‘associate’ ” from April 2018 through 

early 2019. To work for WFG, Sellers was required to sign a “non-negotiable” 

contract called an “Associate Membership Agreement” (AMA), which “set 

forth uniform [company] rules and policies.” Upon signing the AMA, Sellers 

became a “member of WFG’s independent sales force,” “authorized to engage 

in the business of selling products” offered by WFG. WFG classified Sellers, 

and other associates like her, as independent contractors. 

Sellers “recruit[ed] additional workers, [and] attempt[ed] to sell 

insurance and financial products to friends and family and new ‘associates,’ ” 

as well as the general public. She, and other associates, were paid only 

commissions from the sales of WFG’s financial and insurance products. She 

regularly worked more than 8 hours per day, and more than 40 hours per 

week, but was not paid an hourly wage and so was not paid minimum wage 

or overtime. If she did not close a sale in a given pay period, she did not 

receive any compensation. 

Sellers alleged that, despite classifying her as an independent 

contractor, WFG “completely control[led] the overall operation of the 

business,” including organizing the associates into a “hierarchy” and setting 

criteria for promotions from “Training Associates” to more advanced positions

such as “Senior Marketing Director” and “retain[ing] the exclusive authority 

to hire and fire every associate.” WFG also required her to work the 

“majority of her time” in a physical office, “usually” six to eight hours per day, 

five days per week; and to perform “non-selling tasks on a regular basis,”

such as attend “mandatory” sales meetings, training sessions, and workrelated events outside normal working hours. Sellers alleged she received 
4

“virtually no compensation” during “nearly an entire year” of working full 

time for WFG. 

Sellers asserted WFG “unlawfully misclassified [her] and its other 

associates as independent contractors rather than properly classify[ing] them 

as employees in order to avoid compliance with [the] California Labor Code 

and other employer obligations, such as employment taxes, sick pay, benefits, 

and workers’ compensation.” She further alleged the AMA contained 

unlawful non-compete, non-solicitation, choice of law and forum selection 

provisions as conditions of employment.

Based on these allegations, Sellers filed this action in November 2019

and asserted nine causes of action in the SAC: (1) unlawful non-compete, 

non-solicitation, choice of law and forum selection provisions in employment 

agreements (Bus. & Prof. Code, § 16600; Lab. Code, § 925); (2) failure to pay 

minimum wage and hourly wages (§§ 221, 223, 1194, 1194.2, 1197, 1197.1);

(3) forced purchases and failure to reimburse for necessary business expenses

(§§ 221, 223, 224, 450, 2802); (4) failure to provide meal and rest periods

(§§ 223, 226.7, 512, 1198); (5) failure to pay overtime (§§ 510, 1194); 

(6) failure to maintain accurate time records or itemized wage statements

(§§ 226, 1174); (7) failure to pay compensation due at the time of separation

(§§ 201, 202, 203); (8) unlawful and unfair business practices (Bus. & Prof. 

Code, § 17200 et seq.); and (9) a PAGA claim for civil penalties. She asserted 

the first cause of action on behalf of herself and a putative class of similarlysituated employees, and the ninth cause of action on behalf of herself, the 

State of California, and all aggrieved employees.
5

II.

WFG’s Motion to Compel Arbitration

WFG moved to compel individual arbitration of Sellers’ claims based on 

an arbitration provision contained in the AMA. We begin our summary of the 

proceedings on WFG’s motion by describing the AMA.

A. The AMA

Sellers electronically signed the AMA as part of her employment 

application on April 4, 2018 through DocuSign.2 The AMA was included in a 

larger electronic packet titled, “U.S. Associate Membership Agreement and 

Application” (the packet). The packet consists of 17 pages and, at the front, 

there was a one-page “Easy Guide To Completing the AMA,” followed by a

two-page “Applicant Profile” that Sellers completed. (Some capitalization 

omitted.) There were then two pages spelling out numerous 

“Acknowledgements,” each signed or initialed by Sellers, including one that 

stated: “I acknowledge and understand that the application section of this 

agreement is not a legal, binding contract and the submission of this 

application does not entitle me to any compensation, rights, or benefits. 

Before I become entitled to receive any compensation on license-required 

products, I must sign the World Financial Group Associate Membership 

Agreement, Insurance Agency contracts, Broker/Dealer contracts and/or 

Product Provider contracts, and obtain the necessary licenses.” (Some 

capitalization omitted.) 

2 DocuSign is an internet-based contract management platform that 

allows companies and individuals to view and sign documents online in an 

electronic format. Andrew Schaad, WFG’s Director of Operations, submitted 

a declaration in support of WFG’s motion to compel arbitration, and attached 

a copy of the AMA signed by Sellers. 
6

The AMA appeared next, beginning on page seven of the packet. It is 

six pages long and contained nine sections, each with a heading in boldface, 

with many of the sections containing multiple subparts. The text of the AMA

is in single-space, small-type font: 9-point Times New Roman font.3 

The AMA referenced arbitration in three provisions, on two separate

and non-consecutive pages. The first two provisions appeared on page 4 of 

the AMA:4

V. Arbitration of Grievances

The Parties agree that, except as specifically provided to the contrary in this Agreement, any Grievance shall be resolved 

exclusively by Good Faith Arbitration.

VI. Extraordinary Relief

The Associate acknowledges that WFG would suffer extremely costly and irreparable harm, loss and damage if any of the 

provisions of this Agreement are violated by the Associate. The Associate agrees that WFG shall be entitled to seek Extraordinary 

Relief to temporarily enjoin violations by the Associate of this Agreement and that WFG may seek Extraordinary Relief in the 

federal and state courts of the State of Georgia, in any court of competent jurisdiction outside the State of Georgia, as well as in 

Good Faith Arbitration and if justice requires, in more than one of them, all without having to first comply with the requirements 

of Article V. The specifics of this Article VI shall not be deemed to preclude or narrow the judicial or arbitral powers regarding 

Extraordinary Relief.

The third reference to arbitration appeared on page five of the AMA, as the 

eighth of 15 subparts of a “Miscellaneous” section:

3 We determined the font type and font size by viewing the copy of the 

AMA included in the record in Microsoft Word. Our observation is consistent 

with the finding by the district court of the same AMA in Yeomans v. World 

Fin. Grp. Ins. Agency, Inc. (N.D. Cal. 2020) 485 F.Supp.3d 1168, 1185 

(Yeomans) [“To be exact, the AMA is written in 9-point font.”]). We discuss 

Yeomans in further detail, post.

4 We reproduce the relevant provisions of the AMA in the same 9-point 

Times New Roman font to show the actual size of the font type and font size 

of the AMA text. However, when viewing the copy of the AMA that is in the 

record, it is apparent the margins of the document are reduced to allow more 

text in each line, resulting in an overall denser appearance of the text. 

Because our standard margins are wider, we are unable to reproduce the

same character spacing and wrap the text in the same lines as the AMA.
7

H. If any part, section, clause, paragraph, term or provision of this Agreement shall be found to be void or unenforceable by 

any court or arbitration of competent jurisdiction, such finding shall have no effect upon any other part, section, clause, paragraph, 

term or provision of this Agreement.

The AMA did not reference arbitration beyond these three provisions, 

and did not, itself, define the capitalized term “Good Faith Arbitration.” 

Instead, the packet included a separate four-page “GLOSSARY AND 

EXPLANATION OF TERMS” (Glossary), which appeared after the signature 

page for the AMA, on page 13 of the packet. The reader is told of the 

existence of the Glossary on page five of the AMA under the miscellaneous 

section:

A. All capitalized terms used but not otherwise defined herein shall have the meaning set forth in that certain Glossary and 

Explanation of Terms published by WFG and in effect as of the date of this Agreement, a copy of which Associate acknowledges 

receipt. The Glossary and Explanation of Terms are contractual supplements to this Agreement that are binding on the Associate 

and by this reference are made part of this Agreement. Any changes to the Glossary and Explanation of Terms shall be effective 

as of the date of general publication by WFG.

The separate Glossary contained 24 defined terms and the text is in the 

same single-spaced, 9-point Times New Roman font as the AMA. Beginning 

on the bottom of the second page of the Glossary, and continuing on for most 

of the third page, there was an eight-part definition of the term “ ‘Good Faith 

Arbitration’ ” under section I. The following three subparts were included in 

the definition:

1. General. All Grievances shall be resolved by Good Faith Arbitration in accordance with the Rules, except that, or in addition 

to such Rules: i) in order to assure neutrality and impartiality of the arbitrator(s), and to preserve the confidentiality of proprietary 

information, the arbitrator(s) shall not be any present or past owner, officer, director, employee, consultant, associate, agent, 

registered representative, attorney or other representative of any insurance company, insurance broker or insurance agency, 

securities broker, securities dealer or mortgage company, investment advisor, or of any affiliate of any of them; ii) the Parties may 

be entitled to such discovery and protective orders as provided herein; iii) the locale where the arbitration shall be held is the 

principal head office of WFG in Duluth, Georgia or, if that location is not convenient for all Parties, they shall try to devise a way 

so that it is convenient, or if that location cannot be made convenient, at such other place as the Parties may agree, or, if they cannot 

agree, then as may be set by the Rules, as the case may be: iv) a transcript shall be made on the proceeding; and v) the arbitrator’s(s’) 

award shall state their findings of fact and conclusions of law.

4. Waiver of Litigation. The Parties acknowledge and agree that, except as specifically provided to the contrary in this 

Agreement, this Section I is and shall be the Parties’ exclusive remedy for any Grievance arising out of or relating to this Agreement, 

or the breach thereof. It is the intent of the Parties that, except as specifically provided to the contrary in this Agreement, to the 

fullest extent allowed by law all Grievances, including any claims or defense (whether created or governed by federal, state or local 

law, rule or regulation) shall be resolved in an arbitral rather than a judicial forum. It is understood by the Parties that it is to their 

mutual benefit to submit Grievances that they are unable to resolve themselves for resolution by a neutral referee in an arbitral 

rather than a judicial forum. Those Parties recognize that by choosing Good Faith Arbitration as the mechanism for resolving 

Grievances, each Party expects to ensure a more expeditious and economical resolution of their Grievances than is available in 

most cases in a judicial forum. Accordingly, except as specifically provided to the contrary in this Agreement, the Parties expressly 

waive the right to litigate in a judicial forum all Grievances and waive the right to trial by jury. The Parties further agree that the 
8

findings of fact issued by the arbitrator(s), as reviewed, if applicable, shall be binding on them in any subsequent arbitration, 

litigation or other proceeding.

6. Extraordinary Relief. The Parties agree that WFG has the right to seek preliminary and temporary restraining orders, 

injunctions and other extraordinary relief (such orders, injunctions and other relief referred to as “Extraordinary Relief”) under 

Article VI of this Agreement without complying with Article V of the Agreement or this Section I. Without limitation, the Parties 

agree that the requirements for Good Faith Arbitration under Article V of the Agreement or this Section do not preclude WFG from 

seeking in an arbitral or in a judicial forum, or in both, Extraordinary Relief to protect its rights under Article VI of the Agreement. 

Neither Article V of the Agreement or this Section I shall be deemed to preclude or narrow the judicial or arbitral powers regarding 

Extraordinary Relief.

The following provision regarding equitable relief was set forth under section

D, subpart 7, related to “ ‘Covenants’ ”:

7. Equitable Relief. The Associate acknowledges and agrees that, in the event that he/she were to violate or threaten to 

violate any of the Covenants, WFG’s recovery of damages would be inadequate to protect WFG. Accordingly, the Associate agrees

that, in the event of a violation, actual or threatened, of any such Covenants, WFG shall be entitled to injunctive relief and specific 

performance, notwithstanding any other provision of this Agreement to the contrary. The Associate acknowledges and agrees that 

injunctive relief and specific performance are appropriate and necessary in the event of a violation, actual or threatened, of such 

covenants because there may be no adequate remedy at law for violation of any of such Covenants in that, among other reasons,

the property rights of WFG which are protected by such covenants are unique assets which cannot be readily replaced in any 

reasonable period of time or in any other way adequately protected.

Although the Glossary stated that “All Grievances shall be resolved by 

Good Faith Arbitration in accordance with the Rules” on page two, the term 

“ ‘Rules’ ” was separately defined on the last page of the Glossary, as “the 

Commercial Arbitration Rules of the American Arbitration Association, as in 

effect at the time of the occurrence of any Grievance” (the AAA rules). The 

AAA rules, though, were not provided as part of the packet. Nor did the AMA 

or Glossary include an instruction or hyperlink to where they could be 

found.5

WFG asserted the arbitration provision in the AMA was valid and 

enforceable against Sellers and her claims. It further asserted, to the extent 

the trial court concluded any part of the arbitration provision was not 

5 WFG provided a copy of the then-current AAA rules, which spanned 

approximately 46 pages of primarily single-spaced text, as an attachment to a 

declaration in support of its motion to compel arbitration.
9

enforceable, the trial court should sever those parts and enforce the 

remainder of the arbitration provision.

B. The Yeomans Decision

In September 2020, approximately two months after WFG filed its

motion to compel arbitration of Sellers’ claims, the United States District 

Court for the Northern District of California decided Yeomans. (Yeomans, 

supra, 485 F.Supp.3d 1168.) In that case, the district court denied WFG’s 

similar motion to compel arbitration against a different set of WFG 

associates, based on the same arbitration provision contained in the same 

AMA that is before this court. (Id. at p. 1191.) 

The named plaintiffs in Yeomans began working for WFG in or before

2016, and filed a putative class action lawsuit against WFG in December 

2018. (Yeomans, supra, 485 F.Supp.3d at pp. 1172, 1175, 1181.) They 

alleged WFG “recruit[ed]” individuals as associates “ ‘to build and operate 

their own financial services business.’ ” (Id. at p. 1173.) However, WFG 

conducted its business “ ‘by way of a massive pyramid scheme,’ ” in which the 

recruitment of new associates was one of the main factors to promotions, 

while it pressured associates to purchase and sell WFG’s financial and 

insurance products to the new associates. (Ibid.) The Yeomans plaintiffs

further alleged that WFG “ ‘unlawfully misclassified [a]ssociates as 

“independent contractors” rather than as employees’ in order to further 

increase company profits,” depriving them “of the protection of workers’ 

compensation, the benefits of overtime pay, and meal and rest breaks.” 

(Ibid.) They asserted violations of the California Labor Code, the California 

Business and Professional Code, and California Wage Orders. (Ibid.)

The Yeomans plaintiffs alleged they were each “ ‘required to sign 

identical, non-negotiable’ ” AMAs. (Yeomans, supra, 485 F.Supp.3d at 
10

p. 1173.) WFG moved to compel individual arbitration based on the 

arbitration provision contained in the AMA. (Id. at pp. 1176−1177.) The 

plaintiffs asserted they were not bound by the AMA’s arbitration provision 

because “they received only the signature page of the AMA when they were 

being recruited to join WFG and never actually saw or received the entire 

AMA or the provision containing the arbitration agreement.” (Id. at p. 1178.) 

Each admitted signing the signature page to the AMA, but they did so only 

after being “ ‘presented with a small packet of paper documents’ ” that did not 

contain a complete copy of the AMA. (Id. at p. 1181.) 

Thus, the Yeomans court first addressed whether a valid contract to 

arbitrate had been formed. It found the application packet did not “contain 

information about the arbitration agreement or clearly refer the signatory to 

a full copy of the AMA or where a copy of that document might be found.” 

(Yeomans, supra, 485 F.Supp.3d at p. 1179.) However, WFG also presented 

evidence establishing the full AMA was available through its online portal

beginning in 2016. (Id. at p. 1181.) All but one of the Yeomans plaintiffs 

conceded they had used DocuSign through the online portal, at some point 

after joining WFG, “to complete AMAs on behalf of new recruits.” (Id. at 

p. 1183.) The court found “[t]hat [this] process would permit the user [a] 

clear opportunity to view all pages of the AMA” and thus all but one of the 

plaintiffs “agreed to the terms of the AMA” by continuing their work for WFG 

after an opportunity to review the full terms. (Ibid.) The court therefore 

concluded WFG had met its burden of demonstrating the existence of a valid 

contract. (Ibid.)

Next, the Yeomans court considered the plaintiffs’ alternative 

argument that the AMA’s arbitration provision was unconscionable and 

unenforceable. (Yeomans, supra, 485 F.Supp.3d at p. 1184.) The court noted 
11

WFG “concede[d] that there exists both procedural and substantive 

unconscionability, but they argue[d] that there is only minimal with respect 

to both.” (Ibid.) After examining the formatting and content of the AMA and 

the arbitration provision, the court concluded the arbitration provision was 

procedurally and substantively unconscionable.6 (Id. at pp. 1185−1189.) It 

further concluded “the AMA is permeated by both a substantial degree of 

procedural unconscionability as well as multiple substantively 

unconscionable provisions that are designed to confer an unfair unilateral 

advantage to [WFG], which serves to chill attempts by would-be plaintiffs to 

vindicate their rights.” (Id. at p. 1190.) Accordingly, the district court 

declined to sever the unconscionable terms and denied WFG’s motion to 

compel arbitration. (Id. at p. 1191.) 

C. Sellers’ Opposition to the Motion Compel Arbitration

After Yeomans was decided, Sellers filed her opposition to WFG’s 

motion to compel arbitration. She argued primarily that WFG was 

collaterally estopped from relitigating the enforceability of the AMA’s

arbitration provision already found to be unconscionable and unenforceable

by the district court in Yeomans. She further asserted that, even without

collateral estoppel, the arbitration provision was unenforceable because it 

was unconscionable, for the same reasons articulated by the court in

Yeomans.

Sellers argued the arbitration provision was procedurally 

unconscionable because there was oppression in that the AMA was a contract 

of adhesion, and surprise because the “prolix printed form conceal[ed] the 

6 We discuss the Yeomans court’s analysis of unconscionability in further 

detail, post.
12

arbitration provision,” which was “further exacerbated” by the arbitration 

provision’s use of undefined terms and definitions located separately in the 

Glossary. She argued the arbitration provision was substantively

unconscionable, for three reasons: (1) The arbitration provision was “onesided” because, under the AMA’s “ ‘Extraordinary Relief’ ” and “ ‘Equitable 

Relief’ ” clauses, only WFG had the option of opting out of arbitration for 

particular claims, while all associates were required to submit those same

claims to arbitration. (2) The arbitration provision granted the arbitrator the 

authority to award attorney fees and costs to the prevailing party, 

“irrespective of whether the action was brought with merit.” (3) The AMA 

contained choice of law and choice of venue provisions which mandated that

all claims be filed in the state of Georgia, where WFG is headquartered, and 

apply Georgia law. Sellers argued, as the Yeomans court had found, that

these provisions would serve to deter litigants who do not have the means to 

litigate in a foreign state. Finally, Sellers asserted the multiple, 

unconscionable terms “so permeate[ed]” the arbitration provision that “the 

only cure” was to void the entire arbitration provision.

D. WFG’s Reply

WFG disagreed it was collaterally estopped by the Yeomans decision 

from relitigating the enforceability of the AMA’s arbitration provision. It

asserted the Yeomans decision was not a final judgment on the merits and 

the issues litigated there were not identical to the issues in Sellers’ case. As 

to a lack of identicality, WFG argued the court in Yeomans relied, at least in 

part, on its finding the Yeomans plaintiffs had not initially received a full and 

complete copy of the AMA. In contrast, Sellers conceded she had received 

and signed the complete AMA through DocuSign at the outset of her 

relationship with WFG. 
13

E. The Trial Court’s Ruling

The trial court ruled on WFG’s motion to compel arbitration on March 

5, 2021. It found the AMA’s arbitration provision was governed by the FAA 

because it affected interstate commerce. The court first ruled collateral 

estoppel did not apply because the Yeomans order was not “ ‘final and on the 

merits,’ ” at least in part because it was still subject to appeal. On the merits, 

the trial court found the arbitration provision was procedurally and 

substantively unconscionable, and severance of the unenforceable terms was 

not appropriate.

In assessing procedural unconscionability, the trial court found the 

AMA was an adhesion contract, which WFG did not dispute. The court, 

however, “note[d] that the small-font type used [in the AMA] does not suffice 

to establish procedural unconscionability” because “it appear[ed] [Sellers] 

could view the pages in any font size she wished” in DocuSign. It further 

noted that “unlike Yeomans,” Sellers did “not provide any evidence that she 

was not presented with the full agreement when she signed it.” But the court 

found that “the terms of the arbitration provision were found not only in the 

arbitration provision but also in the accompanying [G]lossary.” For that 

reason, the court stated it “must scrutinize the substantive terms.” In doing 

so, the trial court found the “ ‘Extraordinary Relief’ and ‘Equitable Relief’ 

provisions, which only allow[ed] [WFG] the option of excluding [itself] from 

arbitration for certain claims” and the prevailing party provisions, which 

“does not consider whether an action is brought in bad faith,” were both

substantively unconscionable terms. 

Finally, the trial court found severance was not appropriate. The court 

explained: “[I]n order to determine the terms of the arbitration agreement, 

one would have to look not only at the arbitration provision but also in the 
14

accompanying [G]lossary. Indeed, the arbitration provision under [section] V 

is only one sentence, with all the remaining terms located in a separate 

document in multiple separate subparagraphs. In order to remove the 

unconscionable taint, the [c]ourt would need to reform the contract by 

stitching together the patchwork of terms. This the [c]ourt cannot do.” 

Finding “that the unconscionability permeates the agreement,” the court 

concluded severance was not appropriate and therefore denied WFG’s motion 

to compel arbitration.

On March 25, 2021, WFG filed its notice of appeal.

F. Yeomans Is Affirmed

On November 17, 2021, while this appeal was pending, the Court of 

Appeals for the Ninth Circuit affirmed the district court’s order in Yeomans. 

(Yeomans v. World Fin. Grp. Ins. Agency, LLC (9th Cir. Nov. 17, 2021, No. 20-

16937, No. 20-73758) 2021 WL 5356537 (Yeomans II).)7 In its de novo review 

of the order denying WFG’s motion to compel arbitration, the Ninth Circuit 

found both elements of procedural and substantive unconscionability present 

in the AMA’s arbitration provision. Specifically, the Yeomans plaintiffs 

“show[ed] that there was surprise in the contracting process” and “that some 

of the terms were ‘unreasonably favorable to [WFG,] the more powerful 

party.’ ” (Id. at p. *1.) “Moreover, given the relatively high degree of 

procedural unconscionability and multiple unconscionable provisions,” the 

7 WFG requests that we take judicial notice of the docket and Sellers 

requests that we take judicial notice of the briefing in Yeomans II. We have

already granted a request to take judicial notice of the briefing in connection 

with a motion to stay submitted by WFG, and the docket is not necessary for 

resolution of this appeal. We therefore deny both requests. (See Mangini v. 

R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063; County of San Diego 

v. State of California (2008) 164 Cal.App.4th 580, 613, fn. 29.)
15

court further agreed with the district court that severance was not 

appropriate “because the arbitration agreement lacked mutuality and ‘the 

central purpose . . . [wa]s tainted’ with an intent to deter [WFG] [a]ssociates, 

like plaintiffs, from enforcing their rights under California law.” (Ibid.)

DISCUSSION

On appeal, WFG contends the trial court erred by finding the 

arbitration provision both procedurally and substantively unconscionable, 

and by declining to sever the unconscionable terms. In response, Sellers

maintains that WFG is “collaterally estopped” from relitigating the 

enforceability of the AMA’s arbitration provision in light of Yeomans and

Yeomans II. She further maintains that, even if WFG is not “collaterally 

estopped,” the Yeomans and Yeomans II decisions are persuasive authority 

and the arbitration provision is unconscionable and unenforceable against 

her for the same reasons articulated in Yeomans. On this latter contention, 

we agree with Sellers and find no error with the trial court’s ruling. For that 

reason, we need not decide whether the doctrine of issue preclusion would bar 

WFG from relitigating the enforceability of the arbitration provision.8

Where there is no conflicting extrinsic evidence, “the validity of an 

arbitration clause, including whether it is subject to revocation as 

unconscionable, is a question of law subject to de novo review.” (Serpa v. 

California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 702 

8 “The law of preclusion helps to ensure that a dispute resolved in one 

case is not relitigated in a later case.” (Samara v. Matar (2018) 5 Cal.5th 

322, 326.) Although the parties, and the trial court, use the term “collateral 

estoppel,” our high court has explained the “contours and associated 

terminology” associated with the doctrine “have evolved over time. We now 

refer to ‘claim preclusion’ rather than ‘res judicata’ [citation], and use ‘issue 

preclusion’ in place of ‘direct or collateral estoppel’ [citations].” (Ibid.)
16

(Serpa).) We review the trial court’s decision whether to sever 

unconscionable portions of an arbitration agreement for abuse of discretion. 

(Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 

83, 122 (Armendariz); Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 

226 Cal.App.4th 74, 83 (Carmona).)

We have examined the AMA and the arbitration provision and,

although we are not bound by the decisions of the federal appellate courts, we 

agree with the district court’s observations of the AMA and the arbitration 

provision in Yeomans. We also find the court’s analysis in Yeomans 

persuasive. (See People v. Brooks (2017) 3 Cal.5th 1, 90 [decisions of the 

federal appellate courts “may be considered for their persuasive weight”].)

Accordingly, we independently conclude the arbitration provision is 

procedurally and substantively unconscionable, for largely the same reasons 

as the court did in Yeomans. We also find no abuse of discretion in the trial 

court’s refusal to sever the unconscionable portions of the arbitration 

agreement. 

I.

General Legal Principles

The parties agree the AMA is governed by the FAA. Under the FAA, 

“[a] written provision in . . . a contract evidencing a transaction involving 

commerce to settle by arbitration a controversy thereafter arising out of such 

contract . . . shall be valid, irrevocable, and enforceable, save upon such 

grounds as exist at law or in equity for the revocation of any contract[.]” 

(9 U.S.C. § 2.) The FAA reflects “both a ‘liberal federal policy favoring 

arbitration,’ [citation] and the ‘fundamental principle that arbitration is a 

matter of contract.’ ” (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 

339 (AT&T Mobility).) 
17

Because arbitration is a matter of contract, the FAA “permits 

agreements to arbitrate to be invalidated by ‘generally applicable contract 

defenses, such as fraud, duress, or unconscionability.’ ” (AT&T Mobility, 

supra, 563 U.S. at p. 339, quoting Doctor’s Associates, Inc. v. Casarotto (1996) 

517 U.S. 681, 687; accord Armendariz, supra, 24 Cal.4th at p. 114.) To 

determine the validity of an arbitration agreement, state law contract 

principles apply. (Pinnacle Museum Tower Assn. v. Pinnacle Market 

Development (US), LLC (2012) 55 Cal.4th 223, 236 [“In determining the 

rights of parties to enforce an arbitration agreement within the FAA’s scope, 

courts apply state contract law while giving due regard to the federal policy 

favoring arbitration.”]; accord OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 

125−138 (OTO), cert. den. sub nom. OTO, L.L.C. v. Ken Kho (2020) ___ U.S. 

____ [141 S.Ct. 85] [applying California state law regarding unconscionability 

and concluding “[t]he FAA thus contemplates that unconscionability claims, 

like other state law contract defenses, will be resolved before arbitration is 

enforced”].) And “[u]nder California law, courts may refuse to enforce any 

contract found ‘to have been unconscionable at the time it was made,’ or may 

‘limit the application of any unconscionable clause.’ ” (AT&T Mobility, at 

p. 340, quoting Civ. Code, § 1670.5, subd. (a).) 

As the California Supreme Court has explained, “ ‘[t]he 

unconscionability doctrine ensures that contracts, particularly contracts of 

adhesion, do not impose terms that have been variously described as 

“ ‘ “overly harsh” ’ ” [citation], “ ‘unduly oppressive’ ” [citation], “ ‘so one-sided 

as to “shock the conscience” ’ ” [citation], or “unfairly one-sided” [citation]. All 

of these formulations point to the central idea that unconscionability doctrine 

is concerned not with “a simple old-fashioned bad bargain” [citation], but 

with terms that are “unreasonably favorable to the more powerful party”
18

[citation]. These include “terms that impair the integrity of the bargaining 

process or otherwise contravene the public interest or public policy; terms 

(usually of an adhesion or boilerplate nature) that attempt to alter in an 

impermissible manner fundamental duties otherwise imposed by the law, 

fine-print terms, or provisions that seek to negate the reasonable 

expectations of the nondrafting party, or unreasonably and unexpectedly 

harsh terms having to do with price or other central aspects of the 

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

899, 910−911 (Sanchez).)

“ ‘[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. ‘Essentially a sliding scale is invoked which disregards the regularity 

of the procedural process of the contract formation, that creates the terms, in 

proportion to the greater harshness or unreasonableness of the substantive 

terms themselves.’ [Citations.] In other words, the 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.” (Armendariz, supra, 24 Cal.4th at p. 114.) 

II.

The Arbitration Provision is Procedurally Unconscionable

As noted, procedural unconscionability focuses on oppression or 

surprise due to unequal bargaining power. (Armendariz, supra, 24 Cal.4th at 
19

p. 114.) “ ‘Oppression’ arises from an inequality of bargaining power which 

results in no real negotiation and ‘an absence of meaningful choice.’ ” (Zullo 

v. Superior Court (2011) 197 Cal.App.4th 477, 484 (Zullo).) “ ‘ “ ‘Surprise’ 

involves the extent to which the supposedly agreed-upon terms of the bargain 

are hidden in the prolix printed form drafted by the party seeking to enforce 

the disputed terms.” ’ ” (Ibid.)

Both oppression and surprise due to unequal bargaining power are 

present here for many of the same reasons found by the court in Yeomans. 

(See Yeomans, supra, 485 F.Supp.3d. at pp. 1184−1187.) First, the AMA is a 

contract of adhesion and is, by its nature, oppressive. (See Armendariz, 

supra, 24 Cal.4th at p. 113 [“Unconscionability analysis begins with an 

inquiry into whether the contract is one of adhesion.”].) A contract of 

adhesion is a “ ‘standardized contract, which, imposed and drafted by the 

party of superior bargaining strength, relegates to the subscribing party only 

the opportunity to adhere to the contract or reject it.’ ” (Ibid.) The court in 

Yeomans found that “[a]t the moment in which the [WFG] application 

packets were presented, applicants ‘had a stark choice: either sign the AMA 

signature page as part of the sign-up packet, or reject the agreement and not 

take the job.’ ” (Yeomans, at p. 1185.) The record in this case is also devoid of 

evidence suggesting Sellers, or any other associate, had any ability to 

negotiate the terms of the boilerplate AMA in WFG’s standard employment 

application packet. We thus agree with the Yeomans court that “ ‘[t]here was 

no meaningful opportunity to negotiate the terms of the agreement,’ ” “[n]or 

was there an option to opt out.” (Ibid.) 

WFG does not dispute the AMA is a contract of adhesion. Instead, it

asserts that fact alone is not sufficient to establish procedural 

unconscionability, and “there are no other procedural factors pointing toward 
20

unconscionability.” First, we note that WFG in Yeomans “concede[d] that 

there exists both procedural and substantive unconscionability, but . . . 

argue[d] that there is only minimal with respect to both.” (Yeomans, 485 

F.Supp.3d at p. 1184.) Even in the absence of issue preclusion, it is dubious 

whether WFG can now assert there was no procedural unconscionability in 

the AMA’s arbitration provision. (See Jackson v. County of Los Angeles 

(1997) 60 Cal.App.4th 171, 181 [“ ‘Judicial estoppel prevents a party from 

asserting a position in a legal proceeding that is contrary to a position 

previously taken in the same or some earlier proceeding.’ ”].) 

Second, although “[t]he adhesive nature of the contract will not always 

make it procedurally unconscionable,” courts have generally acknowledged 

“adhesion contracts in the employment context typically contain some 

measure of procedural unconscionability.” (Roman v. Superior Court (2009) 

172 Cal.App.4th 1462, 1470−1471, fn. 2 (Roman); Marin Storage & Trucking, 

Inc. v. Benco Contracting and Engineering, Inc. (2001) 89 Cal.App.4th 1042, 

1054 [“we find no error in the trial court’s conclusion that the Work 

Authorization and Contract was a contract of adhesion and, hence, 

procedurally unconscionable”].) Further, as our high court recently explained

in OTO, “[w]ith respect to preemployment arbitration contracts, we have 

observed that ‘the economic pressure exerted by employers on all but the 

most sought-after employees may be particularly acute, for the arbitration 

agreement stands between the employee and necessary employment, and few 

employees are in a position to refuse a job because of an arbitration 

requirement.’ ” (OTO, supra, 8 Cal.5th at p. 127, quoting Armendariz, supra, 

24 Cal.4th at p. 115.) 

WFG relies on Roman to assert the adhesive nature of the arbitration

provision is not enough to establish procedural unconscionability, but even 
21

the court in Roman found there was at least some level of “procedural 

unfairness . . . inherent in an adhesion agreement in the employment 

context.” (Roman, supra, 172 Cal.App.4th at pp. 1470–1471.) The Roman 

court explained the “oppression typically inherent in adhesion contracts is 

minimal” when the bargaining power “is not grossly unequal and reasonable 

alternatives exist.” (Id. at p. 1470, fn. 2.) But here, as we have discussed, the

AMA containing the arbitration provision presented Sellers and others like 

her with “ ‘a stark choice: either sign the AMA signature page as part of the 

sign-up packet, or reject the agreement and not take the job.’ ” (Yeomans, 

supra, 485 F.Supp.3d at p. 1185; accord OTO, supra, 8 Cal.5th at p. 127

[acknowledging the economic pressure exerted by employers in the context of 

preemployment arbitration contracts].) Thus, it cannot be said that the 

bargaining power was not grossly unequal or that Sellers had a reasonable 

alternative. The resulting oppression was not minimal. 

We further disagree with WFG that no other procedural factors pointed 

toward unconscionability. There was strong indicia of surprise as well. Our 

independent review of the formatting and content of the AMA leads us to 

reach the same conclusion as the court did in Yeomans: the key terms of the 

arbitration provision are hidden in the prolix of the AMA. (See Yeomans, 

supra, 485 F.Supp.3d at pp. 1185−1186; Zullo, supra, 197 Cal.App.4th at 

p. 484 [“ ‘ “ ‘Surprise’ involves the extent to which the supposedly agreedupon terms of the bargain are hidden in the prolix printed form drafted by 

the party seeking to enforce the disputed terms.” ’ ”].)

As the Yeomans court observed, “although the heading of the AMA’s 

arbitration provision is underscored in bold (like all other headings), the text 
22

is in single-spaced, small-type font.”9 (Yeomans, supra, 485 F.Supp.3d at 

p. 1185.) To be exact, the text is in 9-point Times New Roman font. (See

footnote 3, ante; see Yeomans, at p. 1185.) We also observe that the margins 

of the AMA are reduced to allow more text in each line, resulting in an 

overall denser appearance of the text. (See footnote 4, ante.) As noted by the 

court in Yeomans, our high court has found similarly-small, dense text to be 

“a paragon of prolixity,” supporting a finding of surprise. (OTO, supra, 8 

Cal.5th at pp. 119, fn. 4, 128 [finding an arbitration provision written in 

“extremely small font,” between 7 and 8.5 points, spanning 51 lines on a 

single page to be the “paragon of prolixity”]; see Yeomans, at p. 1185.) We 

agree with the district court’s observation “that ‘[a] layperson trying to 

navigate this block text, printed in tiny font, would not have an easy 

journey.’ ” (Yeomans, at p. 1186.) 

We further agree with the district court that “[t]he prolix is further 

exacerbated by the arbitration provision[’s] use of undefined terms, 

definitions of which are located elsewhere.” (Yeomans, supra, 485 F.Supp.3d 

at pp. 1185−1186.) The arbitration provision in the AMA itself is just a single 

sentence, stating “[t]he Parties agree that, except as specifically provided to 

the contrary in this Agreement, any Grievance shall be resolved by Good 

Faith Arbitration.” That sentence appears on page four of the AMA and page 

10 of the application packet. The AMA does not define either of the 

capitalized terms, “Grievance” and “Good Faith Arbitration.” 

9 We note the heading of the arbitration provision, like other headings in 

the AMA, is in bold but is not underscored in the AMA executed by Sellers 

that is in the record. However, the parties agree the AMA at issue in 

Yeomans was the same as in this case. 
23

We observe, as did the Yeomans court, the reader instead must turn 

another four pages to the Glossary⎯“a wholly separate document that is 

similarly single spaced and in small-scale font⎯to find the general definition 

of ‘Good Faith Arbitration,’ followed by seven separate terms and definition 

that make up good faith arbitration. Then, the reader must scroll further to 

uncover the definition of ‘Grievance’ in order to put it all together. Although 

these agreed-upon terms were not hidden per se, they were not contained 

within the AMA’s arbitration provision, and a reader seeking to make sense 

of the arbitration provision would have to flip through a separate document 

in order to understand the extent to which they would be bound.” (Yeomans,

supra, 485 F.Supp.3d at p. 1186.) Further, although the Glossary refers to

the “ ‘Rules’ ” of arbitration under the AMA, the rules are “not defined until 

near the end of the Glossary and even then makes reference to the AAA rules 

without a hyperlink or an instruction as to how to obtain them.” (Id. at 

pp. 1186−1187.) Based on all these factors, we conclude there was a high 

degree of procedural unconscionability associated with Sellers’ assent to 

arbitration. (See id. at p. 1187 [ “there was a significantly high degree of 

procedural unconscionability”].).) 

WFG argues this case differs from Yeomans in two key respects which 

preclude a finding of procedural unconscionability. First, it asserts Sellers 

viewed the AMA electronically, while the Yeomans plaintiffs viewed the AMA 

in paper format. So it argues the trial court was correct in finding that 

Sellers could “view the pages in any font size she wished” and, thus, the 

“small-font type used does not suffice to establish procedural 

unconscionability.” However, because we review unconscionability de novo, 

we are not bound by the trial court’s analysis. (See Serpa, supra, 215 

Cal.App.4th at p. 702.) We also do not agree with it.
24

As an initial matter, we note, contrary to WFG’s assertion, the 

Yeomans plaintiffs did not “view” the AMA on paper. Although they initially 

received a paper packet, that packet did not include a complete copy of the 

AMA. (See Yeomans, supra, 485 F.Supp.3d at pp. 1179, 1182−1183.) Just 

like Sellers, the Yeomans plaintiffs’ only opportunity to view the full AMA 

was electronically, when they subsequently accessed DocuSign to complete 

the application process for new recruits. (Ibid.) Thus, the court in Yeomans

actually considered an electronic version of the AMA in its analysis of 

procedural unconscionability. 

Further, we find no evidence in the record indicating the circumstances 

under which Sellers viewed the AMA, including what type of device she used, 

or establishing that the DocuSign platform allowed Sellers to “view the pages 

in any font size she wished.” We acknowledge Sellers may have been able to 

adjust the size, or zoom, of the document on the screen of whatever device she 

may have used, but doing so would not change the formatting of the 

document or the fact that Sellers would have to search through numerous 

pages of dense text, spanning several documents, to find the pertinent terms 

of the arbitration provision. (See OTO, supra, 8 Cal.5th at p. 128 

[considering density of text along with font size].)

Still, this asserted difference does not affect our independent analysis. 

The relevant question is whether the terms were hidden or, to put it another 

way, whether the contracting party would be surprised to learn of them. (See 

OTO, supra, 8 Cal.5th at p. 128; Zullo, supra, 197 Cal.App.4th at p. 484.) As 

we have already discussed, the arbitration provision and most notably its key 

substantive terms were spread out and essentially hidden within the AMA 

and the separate Glossary, which appeared only after the signature page to 

the AMA. Sellers would have to “scroll further” or “flip through” multiple 
25

pages of both documents and “put it all together” in order to understand the 

extent to which she was bound by an arbitration provision. (Yeomans, supra,

485 F.Supp.3d at p. 1186.) As in OTO, “the agreement appears to have been 

drafted with an aim to thwart, rather than promote, understanding.” (OTO, 

at p. 129.)

Second, WFG asserts the Yeomans court relied on the fact that the 

plaintiffs there, unlike Sellers, were not initially given the full AMA in its 

procedural unconscionability analysis. The Yeomans plaintiff argued there 

was surprise because “they were never presented with the full AMA, the 

arbitration provision it contained, or any hint that they were binding 

themselves to additional terms when the[y] signed the signature page 

contained in the WFG application packet, at least until sometime later they 

had notice of the AMA when they recruited others.” (Yeomans, supra, 485 

F.Supp.3d at p. 1185.) As we explained, the district court discussed these 

facts primarily in its analysis of contract formation. (See id. at 

pp. 1178−1184.) The court did reference these facts at the start of its

procedural unconscionability analysis, finding that “[t]he AMA’s rollout was 

plagued with an element of surprise due to all the reasons discussed above 

regarding formation.” (Id. at p. 1185.) But it then focused the majority of its 

analysis of procedural unconscionability on the prolix and hidden terms. (See 

id. at pp. 1185−1187.) Thus, as a preliminary matter, we disagree with any

assertion that the Yeomans plaintiffs’ initial lack of a full copy of the AMA 

was dispositive in the district court’s procedural unconscionability analysis. 

At the same time, we acknowledge Sellers, unlike the Yeomans

plaintiffs, was presented with a full copy of the AMA at the outset of her 

relationship with WFG. We consider the degree of procedural 

unconscionability in light of that difference, but conclude the distinction is 
26

not significant. The only question here is whether, and to what extent, the 

degree of procedural unconscionability is diminished by the fact that Sellers 

was presented with a complete copy of the AMA at the outset of her 

relationship with WFG. In our view, any diminishment is minimal. Even 

when given the full AMA, Sellers could not meaningfully negotiate the terms 

of the agreement. Rather, she could only accept the agreement in its entirety 

or not take the job. It would also not change the presence of surprise caused 

by the prolix of the AMA and hidden terms of the arbitration provision in the 

separate Glossary.

In sum, on our own independent review, considering Yeomans as 

persuasive authority, we conclude there was a high degree of procedural 

unconscionability based on the adhesive nature of the AMA and the 

significant degree of prolix and hidden terms related to the arbitration 

provision. 

III.

The Arbitration Provision is Substantively Unconscionable

We turn now to whether any terms of the arbitration provision are 

substantively unconscionable. This inquiry focuses on whether there are 

“ ‘ “overly harsh” ’ or ‘ “one-sided” ’ results.” (Armendariz, supra, 24 Cal.4th 

at p. 114.) Here, we conclude three terms render the arbitration provision 

substantively unconscionable.

First, section VI of the AMA regarding “Extraordinary Relief” 

entitled WFG exclusively the right to seek extraordinary relief to temporarily 

enjoin the associate if “any of the provisions of [the AMA] are violated by the 

[a]ssociate.” Section I, subpart 6, of the separate Glossary further addressed 

“Extraordinary Relief.” It entitled WFG exclusively “the right to seek 

preliminary and temporary restraining orders, injunctions and other 
27

extraordinary relief . . . without complying with [section] V of the 

Agreement”⎯the arbitration provision, “or this Section I”⎯the “ ‘Good Faith 

Arbitration’ ” provision. (Italics added.) And section D, subpart 7, of the 

Glossary regarding “Equitable Relief” required the associate to “agree[ ] that, 

in the event that he/she were to violate or threaten to violate any of the 

Covenants, WFG’s recovery of damages would be inadequate to protect WFG. 

Accordingly, the [a]ssociate agrees that, in the event of a violation, actual or 

threatened, of any such Covenants, WFG shall be entitled to injunctive relief 

and specific performance, notwithstanding any other provision of this 

Agreement to the contrary.” (Italics added.)

We conclude, as did the Yeomans court, that the terms entitling WFG, 

and WFG only, the right to initiate litigation to seek extraordinary relief 

under section VI of the AMA and equitable relief under section D, subpart 7 

of the Glossary, without first complying with its own arbitration provision, to 

be overly one-sided. (See Yeomans, supra, 485 F.Supp.3d at pp. 1188−1189.) 

In addition to these two sections, there was a third similar term under 

section I, subpart 6, of the Glossary not considered by the Yeomans court, 

which itself defined “Extraordinary Relief” in a circular manner to include 

“other extraordinary relief (such [as] orders, injunctions and other relief 

referred to as ‘Extraordinary Relief’).” In California, “[c]ourts have found 

one-sided employer-imposed arbitration provisions unconscionable where 

they provide that employee claims will be arbitrated, but the employer 

retains the right to file a lawsuit in court for claims it initiates, or where only 

the types of claims likely to be brought by employees (wrongful termination, 

discrimination etc.) are made subject to arbitration.” (Serafin v. Balco 

Properties, Ltd., LLC (2015) 235 Cal.App.4th 165, 181 (Serafin).) 
28

Applying California law, the Yeomans court found “the one-sidedness of 

arbitration [in the AMA] is even more stark. This is not the case where, e.g., 

either party can seek an injunction to force compliance with a confidentiality 

clause⎯where there is facial mutuality but results in a de facto advantage to 

the employer. Here, the one-sidedness is facial.” (Yeomans, supra, 485 

F.Supp.3d at pp. 1187–1188.) The Yeomans court found these terms were 

“ ‘designed to allow [WFG]—and [WFG] only—the option of circumventing 

the arbitration process for the claims they felt were important enough to 

them to go the extreme position of excluding themselves from arbitration for 

those claims, while requiring all employees to submit those very claims to the 

arbitration process.’ ” (Id. at p. 1187.) We agree, and also conclude these 

terms are substantively unconscionable. (See Serafin, supra, 235 

Cal.App.4th at p. 181.) 

WFG asserts the California Supreme Court rejected the argument that 

a similar provision was unconscionable in Baltazar v. Forever 21, Inc. (2016) 

62 Cal.4th 1237, 1241, 1246−1248 (Baltazar). Baltazar is inapposite. The 

arbitration provision at issue in Baltazar was mutual and based specifically

on California statutory law. The provision stated: “ ‘Pursuant to California 

Code of Civil Procedure [section] 1281.8 either party hereto may apply to a 

California court for any provisional remedy, including a temporary 

restraining order or preliminary injunction.’ ” (Id. at p. 1241.) Code of Civil 

Procedure section 1281.8, in turn, defines “ ‘provisional remedy’ ” to include

attachments and temporary protective orders, writs of possession, 

preliminary injunctions, temporary restraining orders, and the appointment 

of a receiver. (Code Civ. Proc., § 1281.8, subd. (a).) Subdivision (b) provides, 

“[a] party to an arbitration agreement may file in the court in the county in 

which an arbitration proceeding is pending . . . an application for a 
29

provisional remedy in connection with an arbitrable controversy, but only 

upon the ground that the award to which the applicant may be entitled may 

be rendered ineffectual without provisional relief.” (Id., subd. (b).) The Court

in Baltazar “accept[ed] for the sake of argument that employers are, in 

general, more likely than employees to seek provisional relief during the 

pendency of an arbitration,” but concluded the provision was not 

substantively unconscionable because it did “no more than recite the 

procedural protections already secured by [Code of Civil Procedure] section 

1281.8[, subdivision] (b).” (Baltazar, at p. 1247.) 

WFG concedes the extraordinary and equitable relief provisions at 

issue here are not mutual and, instead, apply only to WFG. WFG 

nevertheless asserts the analysis in Baltazar is instructive because the 

provisions here likewise do no more than confirm WFG’s statutory rights. We 

disagree. None of the terms regarding extraordinary or equitable relief in the 

AMA’s arbitration provision are expressly limited to the provisional relief set 

forth in Code of Civil Procedure section 1281.8. Rather, section I, subpart 6, 

of the separate Glossary is expressly unlimited and allows WFG “to seek 

preliminary and temporary restraining orders, injunctions and other 

extraordinary relief,” without explaining what that “other extraordinary 

relief” might be. (Italics added.) Further, if the intent of these terms was 

simply to “recite the procedural protections already secured by [Code of Civil 

Procedure] section 1281.8(b),” there would be no reason to make the terms

unilateral.10 (Baltazar, supra, 62 Cal.4th at p. 1247.) Further still, as we 

10 At oral argument, WFG’s counsel agreed the extraordinary relief 

provision “reads as a one-way provision,” but asserted, for the first time, “the 

agreement also says the AAA commercial arbitration rules would apply and 

the AAA commercial arbitration rules allow either party to do that [i.e., seek 
30

will discuss, the AMA specified arbitration would occur in accordance with

Georgia law, rendering Code of Civil Procedure section 1281.8, and the 

mutual relief specified by the statute, inapplicable. 

Second, section IX, subpart J, of the AMA regarding “Miscellaneous” 

provided that if any party “commences an action or arbitration to enforce any 

of the provisions hereof, the prevailing Party in such action shall be entitled 

to an award of its reasonable attorneys’ fees and all costs and expenses 

incurred in connection therewith.” As the Yeomans court noted, “California 

courts have previously disapproved of mandatory fee and cost provisions 

where a plaintiff who failed to prevail on similar claims in court would be 

responsible for attorney[ ] fees only where the action was ‘frivolous, 

unreasonable, without foundation, or brought in bad faith.’ ” (Yeomans, 

supra, 485 F.Supp.3d at p. 1188, quoting Trivedi v. Curexo Technology Corp. 

(2010) 189 Cal.App.4th 387, 394 (Trivedi), disapproved on other grounds in 

Baltazar, supra, 62 Cal.4th at pp. 1246−1247.) 

In Trivedi, the Court of Appeal addressed a fee provision that 

“allow[ed] for the recovery of attorney fees and costs by the prevailing party 

extraordinary relief].” Thus, counsel asserted, the provision “simply purports 

to grant a contractual right to WFG which is a right already afforded by the 

commercial arbitration rules.” While the AAA rules do provide a mechanism 

for either party to seek emergency relief from the arbitrator, they do not 

afford Sellers the same broad relief WFG is entitled to under the admittedly 

one-sided extraordinary relief provision in the AMA. Reference to the AAA 

rules—which WFG further concedes were not attached to the AMA—does not 

support WFG’s position and, instead, simply injects further ambiguity into 

the arbitration provision of the AMA. Now, Sellers would be required to 

search for a wholly separate document and view an additional 46 pages of 

mostly single-spaced text to fully understand what she was assenting to with 

regards to arbitration. Reference to the AAA rules only increases the overall 

procedural unconscionability and, as we discuss next, makes severance even

less feasible. 
31

in an arbitration.” (Trivedi, supra, 189 Cal.App.4th at p. 394.) The plaintiff 

brought an action for discrimination in violation of the Fair Employment and 

Housing Act (FEHA), which provides “ ‘a prevailing defendant may recover 

attorney fees only when the plaintiff’s action was frivolous, unreasonable, 

without foundation, or brought in bad faith.’ ” (Ibid.) The Trivedi court 

concluded the fee provision there was substantively unconscionable because 

it did not limit the defendant’s right to recover fees from the plaintiff in 

accordance with FEHA. (Id. at p. 395.) 

Here, Sellers brought claims, among others, under the Labor Code for 

the nonpayment of wages. Section 218.5 provides: “In any action brought for 

the nonpayment of wages, fringe benefits, or health and welfare or pension 

fund contributions, the court shall award reasonable attorney[ ] fees and 

costs to the prevailing party. . . . However, if the prevailing party in the court 

action is not an employee, attorney[ ] fees and costs shall be awarded 

pursuant to this section only if the court finds that the employee brought the 

court action in bad faith.” (Italics added.) The fee provision in the AMA, 

however, simply awards fees to the prevailing party, and does not contain a 

bad faith requirement. 

Just as in Trivedi, the fee shifting provision in the AMA “lessen[ed]

[Sellers’] incentive to pursue claims deemed important to the public interest, 

and weaken[ed] the legal protection provided to plaintiffs who bring 

nonfrivolous actions from being assessed fees and costs.” (Trivedi, supra, 189 

Cal.App.4th at p. 395; accord Ajamian v. CantorCO2e, L.P. (2012) 203 

Cal.App.4th 771, 800 [finding fee provision unconscionable where it imposes 

the obligation to pay attorney fees where the plaintiff “would have no such 

obligation under at least one of her California statutory claims”].) WFG

asserts Trivedi is not instructive here because the fee-shifting provision in 
32

the AMA applies to breach of contract claims only. To the contrary, the fee 

provision applies to any “action or arbitration to enforce any of the provisions 

[of the AMA],” and the AMA, in turn, governs essentially all aspects of 

Sellers’ relationship with WFG, including, notably, the “Associate’s

Compensation.” 

Third, section VI of the AMA regarding “Extraordinary Relief” 

entitled WFG exclusively the right to seek extraordinary relief “in the federal 

and state courts of the State of Georgia, in any court of competent jurisdiction 

outside the State of Georgia, as well as in Good Faith Arbitration and if 

justice requires, in more than one of them, all without having to first comply 

with the requirements of [section] V”⎯the arbitration provision. (Italics 

added.) As the Yeomans court noted, WFG is headquartered in Georgia and 

so “[t]he burden imposed on individual plaintiffs is obvious.” (Yeomans, 

supra, 485 F.Supp.3d at p. 1189.) The court concluded “the provision 

mandating all court litigation to occur in the state of [WFG’s] headquarters, 

as well as the application of Georgia law, to be unduly one-sided such that it 

would serve as a deterrent to litigants who otherwise do not have the means 

to litigate in a foreign state.” (Ibid.) We agree. 

WFG asserts Sellers provides no authority finding a choice of law or 

forum selection clause unconscionable. But WFG again neglects to address 

the analysis in Yeomans, which is, itself, persuasive authority. Moreover, 

other courts in California have found similar choice of law or forum selection 

clauses substantively unconscionable. For example, the court in Pinela v. 

Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, found a provision 

requiring the application of Texas law against a California plaintiff to be 

substantively unconscionable because “on its face [it] disable[d] California 

substantive law, undermining [the plaintiff’s] claims on the merits. Since 
33

[the plaintiff’s] wage-and-hour claims [were] specifically founded on 

California statutory law, [the choice of law provision] work[ed] a substantial 

injustice on him as a citizen of California.” (Id. at pp. 246−249, 251; accord

Samaniego v. Empire Today, LLC (2012) 205 Cal.App.4th 1138, 1149

(Samaniego) [concluding Illinois choice of law provision “would result in 

substantial injustice” because “Illinois law might require enforcement of [the] 

arbitration clause”].) The same is true here. Sellers asserts WFG subjected 

her to non-compete, non-solicitation, and choice of law and forum provisions 

in violation of section 925 and Business and Professions Code section 16600. 

Beyond serving as a deterrent to litigation, the choice of law and forum 

clauses in the AMA’s arbitration provision would directly undermine Sellers’

substantive claims under California law. 

In sum, we independently conclude, like the Yeomans court, that there 

are at least three terms that cause the AMA’s arbitration provision to be 

substantively unconscionable. Where there is both procedural and 

substantive unconscionability, “[a] sliding scale is applied so that ‘ “ ‘the 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.’ ” ’ ” (Serafin, supra, 235 Cal.App.4th at

p. 178; accord Armendariz, supra, 24 Cal.4th at p. 114; see Yeomans, 485 

F.Supp.3d at p. 1189.) Here, for the reasons we have discussed, we conclude 

there is a high degree of procedural unconscionability. Although this in turn 

requires less evidence of substantive unconscionability to render the 

arbitration provision unenforceable, we agree with the Yeomans court that 

with three overly-harsh or overly one-sided, employer-imposed terms, the 

AMA’s arbitration provision has “far more than a low degree of substantive 

unconscionability.” (Yeomans, at p. 1189.) Ultimately, our independent 
34

review of the AMA and its arbitration provision leads us to conclude the 

terms “are ‘unreasonably favorable to the more powerful party.’ ” (Sanchez, 

supra, 61 Cal.4th at p. 911.) Thus, we also conclude the arbitration provision 

is unenforceable unless the unconscionable terms can be severed. We turn to 

this question next.

IV.

The Trial Court Did Not Abuse Its Discretion

in Declining to Sever the Unconscionable Terms

WFG argues the trial court abused its discretion in declining to sever

any unconscionable terms and enforce the remainder of the arbitration 

provision. We find no abuse. 

Once the trial court determines any portion of an arbitration provision 

is unconscionable, it has discretion to find the entire provision unenforceable, 

or to sever or limit any unconscionable terms and enforce the remainder of 

the contract. (See Civ. Code, § 1670.5, subd. (a) [“If the court . . . finds the 

contract or any clause of the contract . . . unconscionable . . . 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.”]; see 

Armendariz, supra, 24 Cal.4th at pp. 121–122; Yeomans, supra, 485 

F.Supp.3d at p. 1189.) We review the trial court’s discretionary decision 

whether to sever unconscionable portions of an arbitration provision for an 

abuse of that discretion. (See Armendariz, at p. 122; Carmona, supra, 226 

Cal.App.4th at p. 83.)

The California Supreme Court in Armendariz explained a trial court 

may refuse to enforce a contract, or provision, as a whole if it is “ ‘permeated’ 

by the unconscionability,” and addressed “precisely what it means for an 
35

agreement to be permeated by unconscionability.” (Armendariz, supra, 24 

Cal.4th at p. 122.) Considering “[t]he basic principles of severability that 

emerge from [the underlying statutes] and the case law,” the Armendariz

Court explained: “Courts are to look to the various purposes of the contract. 

If the central purpose of the contract is tainted with illegality, then the 

contract as a whole cannot be enforced. If the illegality is collateral to the 

main purpose of the contract, and the illegal provision can be extirpated from 

the contract by means of severance or restriction, then such severance and 

restriction are appropriate.” (Id. at p. 124.) The Court found two specific 

factors weighed against severance of the terms at issue there. (Ibid.) First, 

“multiple defects indicate a systematic effort to impose arbitration on an 

employee not simply as an alternative to litigation, but as an inferior forum 

that works to the employer’s advantage.” (Ibid.) “Second, in the case of the 

agreement’s lack of mutuality, such permeation is indicated by the fact that 

there is no single provision a court can strike or restrict in order to remove 

the unconscionable taint from the agreement.” (Id. at pp. 124−125.)

Considering those factors, both the trial court in this case and the 

district court in Yeomans concluded, though for slightly different reasons, 

that severance of the unconscionable terms in the AMA’s arbitration 

provision was not appropriate. (See Yeomans, supra, 485 F.Supp.3d at 

p. 1191.) We reach the same conclusion. As we have discussed, there were at 

least three substantively unconscionable terms in the AMA that defined the 

scope and terms of arbitration, and they appeared in multiple locations in the 

AMA itself and in the separate Glossary. (See Carbajal v. CWPSC, Inc. 

(2016) 245 Cal.App.4th 227, 254 [finding an arbitration provision with three 

unconscionable terms “was permeated with unconscionability”].) There was 

not one single term the trial court could “strike or restrict in order to remove 
36

the unconscionable taint from the agreement.” (Armendariz, supra, 24 

Cal.4th at pp. 124−125.) As the trial court concluded, “[i]n order to remove 

the unconscionable taint, the [c]ourt would need to reform the contract by 

stitching together the patchwork of terms” in two separate documents.

Further still, the “multiple defects demonstrat[ed] a systemic lack of 

mutuality” that favored WFG. (Carmona, supra, 226 Cal.App.4th at p. 90.) 

The Yeomans court concluded the AMA’s arbitration provision was “designed 

to confer an unfair unilateral advantage to [WFG],” and “to chill attempts by 

would-be plaintiffs to vindicate their rights.” (Yeomans, supra, 485 

F.Supp.3d at p. 1190.) We also conclude the unconscionable terms evidenced

“a systematic effort to impose arbitration on an employee not simply as an 

alternative to litigation, but as an inferior forum that works to the employer’s 

advantage.” (See Armendariz, supra, 24 Cal.4th at p. 124; Samaniego, supra, 

205 Cal.App.4th at p. 1149 [finding no abuse of discretion in declining to 

sever unconscionable terms where “ ‘ “multiple defects indicate a systematic 

effort to impose arbitration” ’ ”].) 

Accordingly, we find no abuse of discretion in the trial court’s refusal to 

sever the unconscionable terms. Because we affirm the trial court’s order 

denying the motion to compel arbitration, we need not address WFG’s 

remaining assertions the trial court should dismiss the class claims and stay 

the PAGA claims. 
37

DISPOSITION

The trial court’s order denying the motion to compel arbitration is 

affirmed. Sellers is awarded her costs on appeal. (Cal. Rules of Court, rule 

8.278(a)(1) & (2).)

DO, J.

WE CONCUR:

IRION, Acting P. J.

DATO, J.