Court Opinion

ID: 4661424
Source: CourtListenerOpinion
Date Created: 2021-02-19 02:02:13.338283+00
Date Added: 2024-06-11T08:02:13.383591
License: Public Domain

Filed 2/18/21 McQueen v. Ervin Cohen & Jessup LLP CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION ONE

 KATHY MCQUEEN,                                                      B301637

           Plaintiff and Respondent,                                 (Los Angeles County
                                                                     Super. Ct. No. 19STCV07472)
           v.

 ERVIN COHEN & JESSUP LLP
 et al.,

           Defendants and Appellants.

     APPEAL from an order of the Superior Court of
Los Angeles County, Maureen Duffy-Lewis, Judge. Reversed.
     Lewis Brisbois Bisgaard & Smith, Raul L. Martinez, John
Haubrich, Jr., and Hider J. Al-Mashat for Defendants and
Appellants.
     Cummings & Franck, Scott O. Cummings, Lee Franck, and
Lindsey M. Crismon for Plaintiff and Respondent.
                  ____________________________
       Defendants appeal the denial of their petition to compel
arbitration of plaintiff’s employment claims. The employee
argues that defendants’ arbitration agreement does not satisfy
the minimum requirements for a valid arbitration agreement of
employment disputes set forth in Armendariz v. Foundation
Health Psychcare Services, Inc. (2000) 24 Cal.4th 83
(Armendariz). Among other things, Armendariz instructs that an
arbitration agreement in the employment context must permit
the selection of a neutral arbitrator and require that the
employer bear all costs and fees that would not have been
incurred in a judicial forum. We conclude that the arbitration
agreement at issue here satisfies these requirements.
       The employee also argues that the arbitration agreement
was invalid because it was procedurally and substantively
unconscionable. Although we agree that the arbitration
agreement is procedurally unconscionable, we conclude the
employee has failed to demonstrate substantive
unconscionability. Because procedural unconscionability alone is
insufficient to invalidate the arbitration agreement, the trial
court erred in not enforcing the arbitration agreement.
       We also conclude that the waiver of rights under the Labor
Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code,
§ 2698 et seq.) in the arbitration agreement is contrary to public
policy and must be severed from the remainder of the arbitration
agreement. We reject the employee’s argument that the PAGA
waiver invalidates the entire arbitration agreement because that
agreement is not permeated with illegality and because the
agreement itself calls for the severance of any illegal provision.
       We reverse the trial court’s order denying the employer’s
petition to compel arbitration. Upon remand, the trial court shall

                                   2
issue a new order severing the PAGA waiver and granting the
employer’s petition to compel arbitration.

                        BACKGROUND
       At the time plaintiff and appellant Kathy McQueen filed
her complaint in March 2019, she was a 53-year-old African
American female and a former employee of defendant, Ervin,
Cohen & Jessup LLP (ECJ). Further according to McQueen,
defendants Ronnie Dechezerey and David Tarlow supervised
McQueen, during her tenure at ECJ. At or around the same time
McQueen commenced working at ECJ, she signed multiple
documents including an arbitration agreement (Agreement),
which is the centerpiece of the parties’ dispute.
       McQueen’s complaint against ECJ, Dechezeray, and Tarlow
alleged the following 16 causes of action: (1) disability
discrimination; (2) failure to accommodate/engage in the
interactive process; (3) gender/sex discrimination; (4)
race/color/national origin discrimination; (5) age discrimination;
(6) hostile work environment; (7) retaliation for opposing
practices prohibited by the California Fair Employment and
Housing Act (FEHA) (Gov. Code, § 12900 et seq.); (8) “Failure to
do everything reasonably necessary to prevent discrimination,
harassment and retaliation from occurring . . . .”; (9) interference
with rights under the California Family Rights Act (Gov. Code, §
12945.2); (10) failure to allow employee accrued time off; (11)
violation of Labor Code section 246, governing paid sick days; (12)
wrongful termination; (13) negligent hiring and retention; (14)
intentional infliction of emotional distress; (15) violation of
Business and Professions Code section 17200; and (16) retaliation
for whistleblowing in violation of Labor Code section 1102.5.
(Some capitalization omitted.) She did not allege a PAGA claim.

                                    3
      It is undisputed that all of McQueen’s causes of action are
within the scope of the Agreement. McQueen does not dispute
defendants’ argument that if the Agreement is enforceable, then
she must arbitrate all her claims.

1.    Arbitration Agreement
      McQueen signed the Agreement on June 28, 2017. ECJ’s
human resources director also signed the Agreement. The
Agreement provides: “Binding arbitration will be the exclusive
method to resolve all disputes or controversies arising out of the
employment relationship (or its termination) that ECJ may have
against Employee or that Employee may have against ECJ
and/or against any of ECJ’s . . . managers, officers, . . . [or]
employees . . . . THIS ARBITRATION AGREEMENT IS A
WAIVER OF ANY RIGHT THAT ECJ OR EMPLOYEE MAY
HAVE TO LITIGATE ANY CLAIM IN COURT WITH A JUDGE
OR JURY TRIAL. Neither ECJ nor Employee can initiate or
prosecute any lawsuit based on a Claim covered by this
Agreement, whether Employee remains an employee of ECJ or
not.” (Boldface omitted.)
      The Agreement states that it is governed by the Federal
Arbitration Act “and in conformity with the procedures of the
California Arbitration Act (California Code of Civil Procedure
section 1280 et. seq.). Employee and ECJ will select an arbitrator
by mutual agreement. If Employee and ECJ are unable to agree
on a neutral arbitrator, either party may elect to obtain a list of
arbitrators from the Judicial Arbitration and Mediation Service
(‘JAMS’), the American Arbitration Association (‘AAA’), or any
other reputable dispute resolution organization.”
      With respect to the qualifications of the arbitrator, the
Agreement states: “The arbitrator shall be an active or retired

                                   4
judge, or a person with at least ten (10) years experience in the
private practice of law in a law firm of over twenty-five (25)
attorneys.”
      With respect to the costs of the arbitration, the Agreement
provides: “To ensure that both ECJ and Employee are satisfied
with this cost effective and efficient means of resolving disputes,
ECJ will pay for all of the reasonable and necessary fees and
costs of the arbitration forum and of the arbitrator. ECJ may,
however, be entitled to reimbursement of those fees and costs
that Employee would have otherwise incurred in a judicial
proceeding pursuant to a ruling by the arbitrator.”
      Under the Agreement, “[t]he arbitrator will have the
authority to award any form of remedy or damages that would be
available in a court of proper jurisdiction.”
      The Agreement contains the following PAGA waiver: “All
Claims brought under this Agreement shall be brought in the
individual capacity of the Employee or the Firm. This Agreement
shall not be construed to allow or permit Claims to proceed as a
class action, collective action, private attorney general action or
any similar representative action. . . . . Employee expressly
agrees to waive any right Employee may have to bring an action
on a class, collective, private attorney general, representative or
other similar basis.”

2.    Defendants’ Petition to Compel Arbitration
       On May 13, 2019, defendants filed a petition to compel
arbitration. Defendants argued that McQueen agreed to
arbitrate all her claims. Defendants further argued that the
Agreement is not unconscionable and is enforceable because it
satisfies the enforcement criteria in Armendariz. Defendants

                                    5
also maintained that if any provision of the Agreement were
unenforceable, the trial court should sever that provision.
      ECJ’s director of human resources provided a declaration
stating that McQueen “was hired by ECJ as a billing specialist on
or about June 28, 2017. On June 28, 2017, Plaintiff signed the
Binding Arbitration Agreement.”

3.    McQueen’s Opposition to the Petition to Compel
      Arbitration
      McQueen opposed defendants’ petition to compel
arbitration. She argued that the Agreement did not satisfy
Armendariz, supra, 24 Cal.4th 83. She also argued the
Agreement is procedurally and substantively unconscionable, and
the unconscionable provisions so permeated the Agreement as to
prevent severance of the offending provisions.
      In a declaration in support of her opposition, McQueen
averred that ECJ hired her in July 2017 and, as part of the hiring
process, provided her with a “stack of documents” to sign.
McQueen stated that she “had no clue that [she] was signing an
arbitration agreement nor was it ever explained to [her] . . . .”

4.    Trial Court Order
      The trial court denied defendants’ petition to compel
arbitration. In its written order, the trial court explained:
“Agreement appears to be signed and dated by defendant but
only signed and not dated by plaintiff. Defendant does not
provide foundation as to plaintiff’s alleged signature—when it
took place, how, etc.
      “Agreement is a bit vague. The agreement does not meet
Armendariz basic standards.

                                   6
       “Plaintiff is precluded from bringing or joining in a PAGA
claim—that’s been determined to be unlawful and contrary to
public policy. [Citation.] It does not matter that plaintiff is not
bringing a PAGA claim.
       “The agreement is unconscionable. Procedurally, plaintiff
was forced to sign the agreement. Substantively, there is a
disparity in paying costs, an arbitrator who must have been [an]
attorney for [a] certain required number of years and a non-
PAGA clause.
       “Agreement is, therefore, both procedurally and
substantively unconscionable. Does not meet Armendariz basic
standards.”
       Defendants timely appealed from the order denying their
petition to compel arbitration. An order denying a petition to
compel arbitration is appealable. (Code Civ. Proc., § 1294,
subd. (a).)

                   STANDARD OF REVIEW
      “ ‘ “[W]e review the arbitration agreement de novo to
determine whether it is legally enforceable, applying general
principles of California contract law.” ’ [Citation.] Thus,
unconscionability is a question of law we review de novo.
[Citation.] To the extent the trial court’s determination on the
issue turned on the resolution of contested facts, we would review
the court’s factual determinations for substantial evidence.”
(Carmona v. Lincoln Millennium Car Wash, Inc. (2014)
226 Cal.App.4th 74, 82 (Carmona).) In this case, the trial court
did not resolve contested facts, and we interpret the Agreement’s
language de novo. (Coast Plaza Doctors Hospital v. Blue Cross of
California (2000) 83 Cal.App.4th 677, 684 (Coast Plaza Doctors
Hospital).) A trial court’s decision regarding severance is

                                    7
reviewed for abuse of discretion. (Carmona, supra, at p. 83;
see also Armendariz, supra, 24 Cal.4th at p. 122.)
       We must grant a petition to compel arbitration based on a
written arbitration agreement unless grounds, such as
unconscionability, exist to revoke the agreement. (Carmona,
supra, 226 Cal.App.4th at p. 83; see also Code Civ. Proc., § 1281
[“A written agreement to submit to arbitration an existing
controversy or a controversy thereafter arising is valid,
enforceable and irrevocable, save upon such grounds as exist for
the revocation of any contract.”].) We must resolve any doubts
regarding the validity of an arbitration agreement in favor of
arbitration. (Coast Plaza Doctors Hospital, supra, 83 Cal.App.4th
at p. 686.)

                          DISCUSSION
       On appeal, McQueen does not dispute that she signed and
dated the Agreement. McQueen states that “the Trial Court
never relied on whether or not the Agreement was dated to
conclude that the Agreement is procedurally and substantively
unconscionable” and argues this is a “red herring.” In her
opposing declaration, McQueen explains the circumstances
surrounding her signature. Specifically, McQueen avers that she
was given a stack of papers to sign and was told she had to “sign
and date each document, if [she] wanted to work for Defendant.”
McQueen does not assert that she did not sign the Agreement or
that there was no foundation for her signature, and we therefore
conclude that portion of the trial court’s order is not supported by
the record.
       The issues that the parties vigorously dispute are whether
the Agreement complies with the minimum requirements set
forth in Armendariz and whether the Agreement is invalid

                                    8
because it is unconscionable. We begin with a summary of
Armendariz and then turn to the parties’ arguments.

1.    Armendariz
       Like this case, Armendariz involved a “mandatory
employment arbitration agreement” required as a condition of
employment. (Armendariz, supra, 24 Cal.4th at p. 90.) Two
employees filed suit alleging wrongful termination and violation
of FEHA. (Id. at p. 92.) The employees sought general damages,
punitive damages, injunctive relief, and the recovery of attorney
fees and costs of suit. (Ibid.)
       In response to the employees’ suit, the employer sought to
enforce the following arbitration provision: “ ‘I agree as a
condition of my employment, that in the event my employment is
terminated, and I contend that such termination was wrongful or
otherwise in violation of the conditions of employment or was in
violation of any express or implied condition, term or covenant of
employment, whether founded in fact or in law, including but not
limited to the covenant of good faith and fair dealing, or
otherwise in violation of any of my rights, I and Employer agree
to submit any such matter to binding arbitration pursuant to the
provisions of title 9 of Part III of the California Code of Civil
Procedure, commencing at section 1280 et seq. or any successor
or replacement statutes. I and Employer further expressly agree
that in any such arbitration, my exclusive remedies for violation
of the terms, conditions or covenants of employment shall be
limited to a sum equal to the wages I would have earned from the
date of any discharge until the date of the arbitration award. I
understand that I shall not be entitled to any other remedy, at
law or in equity, including but not limited to reinstatement

                                   9
and/or injunctive relief.’ ” (Armendariz, supra, 24 Cal.4th at
p. 92.)
       The high court rejected the agreement’s limitation of
remedies to back wages predating the arbitration award. The
high court explained that an arbitration agreement may not limit
statutory remedies. (Armendariz, supra, 24 Cal.4th at p. 103.) It
follows that the damage limitation in the parties’ arbitration
agreement was contrary to public policy and unlawful. (Id. at
p. 104.) With respect to discovery, the high court held that the
employees “are at least entitled to discovery sufficient to
adequately arbitrate their statutory claim, including access to
essential documents and witnesses, as determined by the
arbitrator(s) . . . .” (Id. at p. 106.) By agreeing to arbitrate a
FEHA claim, the employer “has already impliedly consented to
such discovery.” (Ibid.) The high court also held that in a FEHA
case, the arbitrator “must issue a written arbitration decision
that will reveal, however briefly, the essential findings and
conclusions on which the award is based.” (Id. at p. 107.)
       With respect to fees and costs of arbitration, an issue
critical here, Armendariz held that “when an employer imposes
mandatory arbitration as a condition of employment, the
arbitration agreement or arbitration process cannot generally
require the employee to bear any type of expense that the
employee would not be required to bear if he or she were free to
bring the action in court. This rule will ensure that employees
bringing FEHA claims will not be deterred by costs greater than
the usual costs incurred during litigation, costs that are
essentially imposed on an employee by the employer.
(Armendariz, supra, 24 Cal.4th at pp. 110–111, italics omitted.)
“[A] mandatory employment arbitration agreement that contains

                                   10
within its scope the arbitration of FEHA claims impliedly obliges
the employer to pay all types of costs that are unique to
arbitration.” (Id. at p. 113.) Consistent with that principle, the
high court interpreted the parties’ agreement as requiring that
the employer “bear the arbitration forum costs.” (Ibid.)
       The high court then considered whether the arbitration
agreement was unconscionable. “ ‘[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, italics omitted.)
       The agreement at issue in Armendariz was procedurally
unconscionable because the employer required employees to sign
it as a condition of employment and there was no opportunity
to negotiate its terms. (Armendariz, supra, 24 Cal.4th at
pp. 114–115.) Additionally, the “doctrine of unconscionability
limits the extent to which a stronger party may, through a
contract of adhesion, impose the arbitration forum on the weaker

                                      11
party without accepting that forum for itself.” (Id. at p. 118.)
The agreement was further unconscionable because it limited
damages to backpay lost up until the time of the arbitration.
(Id. at p. 121.)
       Finally, the high court explained that the trial court has
some discretion whether to sever unconscionable provisions or to
refuse to enforce the entire agreement. (Armendariz, supra,
24 Cal.4th at p. 122.) The court analogized the severance of
provisions in unconscionable contracts to the severance of
provisions in unlawful contracts. (Ibid.) With respect to
unlawful contracts, the court summarized the relevant authority:
“Civil Code section 1598 states that ‘[w]here a contract has but a
single object, and such object is unlawful, whether in whole or in
part, or wholly impossible of performance, or so vaguely
expressed as to be wholly unascertainable, the entire contract is
void.’ Civil Code section 1599 states that ‘[w]here a contract has
several distinct objects, of which one at least is lawful, and one at
least is unlawful, in whole or in part, the contract is void as to the
latter and valid as to the rest.’ ” (Armendariz, at p. 122.) The
court continued: “ ‘Whether a contract is entire or separable
depends upon its language and subject matter, and this question
is one of construction to be determined by the court according to
the intention of the parties. If the contract is divisible, the first
part may stand, although the latter is illegal. [Citation.]”
[Citations.]’ ” (Ibid.)
       A trial court may “refuse to enforce the entire agreement”
only when it is “ ‘permeated’ by unconscionability.” (Armendariz,
supra, 24 Cal.4th at p. 122.) “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

                                    12
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.) In
Armendariz the high court held that the trial did not abuse its
discretion in concluding that the agreement was “permeated by
an unlawful purpose” and refusing to sever the unconscionable
provisions. (Ibid.)

2.    The Agreement Does Not Violate Armendariz’s
      Minimum Standards
      Armendariz held that an employee may be compelled to
arbitrate if the arbitration meets “certain minimum
requirements, including neutrality of the arbitrator, the provision
of adequate discovery, a written decision that will permit a
limited form of judicial review, and limitations on the costs of
arbitration.” (Armendariz, supra, 24 Cal.4th at p. 91.) McQueen
argues that the Agreement violates these minimum standards
because it requires her to pay for certain arbitration fees and
costs unreasonably incurred by her or by defendants in the
arbitration; it does not provide for a neutral arbitrator; and it
prohibits her from asserting a PAGA claim or benefitting from a
PAGA claim.1

      1 McQueen does not argue that the Agreement does not
provide for adequate discovery and a written decision, limits her
remedies, or lacks mutuality. Therefore, we need not address
defendants’ arguments as to these Armendariz criteria.

                                    13
      a.    Fees and costs
       Armendariz teaches that an employer cannot require the
employee to bear any fees or costs incurred in arbitration that the
employee would not have incurred in court litigation.
(Armendariz, supra, 24 Cal.4th at pp. 110–111.) Citing
Armendariz, McQueen argues that “[t]he agreement is
unenforceable because it requires McQueen to pay for fees and
costs that are unreasonable and that she would not be required to
pay if the action were in court.” (Underscoring omitted.)
McQueen hypothecates that she may have to pay fees because of
an “unnecessary motion brought by Defendant[s].” McQueen is
also concerned that “if a fee or cost of arbitration is determined to
be unnecessary or unreasonable, for whatever reason, Plaintiff
would be required to pay for that cost.” McQueen argues that
this could have a “chilling effect” because she will have to
surmise whether “taking depositions, calling witnesses and
serving written discovery or motions” are necessary. McQueen
also argues that under the Agreement, she is liable for the “cost
of the arbitration forum and arbitrator.”
       McQueen’s arguments are not grounded in the Agreement’s
language. The Agreement does not provide that McQueen is
required to pay for unreasonable costs, based either on her own
or ECJ’s conduct. Instead, the actual language of the Agreement
requires ECJ to “pay for all of the reasonable and necessary fees
and costs of the arbitration forum and of the arbitrator.” The
Agreement permits ECJ to seek reimbursement only of “those
fees and costs that Employee would have otherwise incurred in a
judicial proceeding . . . .” This is exactly what Armendariz
requires. (Armendariz, supra, 24 Cal.4th at pp. 110–111.)

                                    14
       McQueen, however, points to this same reimbursement
language to make the curious argument that the Agreement
“surreptitiously” requires her pay for “the cost of the arbitration
forum and arbitrator,” and that she would not have to pay a
judge a fee if she litigated in court. We fail to discern any
support in the Agreement for such an interpretation.
       The Agreement here contrasts markedly with that in
Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242, 1248–1249,
where the court concluded that allowing the arbitrator to require
the losing party to pay the arbitration fee improperly imposed “on
the employee costs he or she would not normally have to pay if
the case were litigated in a court.” (Id. at p. 1248.) In Wherry,
the parties’ agreement permitted the arbitrator to “impose costs,
including the arbitration fee, on the losing party.” (Ibid.) There
is no such arbitration fee shifting here.
       Whereas McQueen assumes that the arbitrator will act
outside the law in requiring her to pay fees and costs such as
those involved in an unnecessary motion brought by defendants,
we must assume the arbitrator will operate in conformity with
the law (Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 984
(Dotson)), and will act reasonably (Torrecillas v. Fitness Internat.,
LLC (2020) 52 Cal.App.5th 485, 497 (Torrecillas)). Consistent
with this principle and based on the plain language of the
Agreement, an arbitrator may require McQueen to pay only those
fees and costs that she would otherwise have incurred in judicial
litigation.
       For all these reasons, the trial court’s finding of a “disparity
in paying costs” is not consistent with Armendariz’s precepts and
has no basis in the Agreement’s language.

                                     15
      b.    Neutral arbitrator
       McQueen contends the Agreement violates Armendariz
because it does not provide for a neutral arbitrator. According to
McQueen: “Defendant’s agreement without reasonable cause
limits the number of possible arbitrators to only those who
worked for ten (10) years ‘in the private practice of law in a law
firm of over twenty-five (25) attorneys.’ ” McQueen further
contends that the requirement that the arbitrator practice in a
firm with over 25 attorneys is based on ECJ’s desire to limit the
field of potential arbitrators to lawyers who represent employers
because according to McQueen, employment law firms have fewer
than 25 employees. In support of that premise McQueen
proffered her counsel’s declaration describing her survey of
16 jury verdicts in employment cases.2
       McQueen’s argument is unpersuasive because under the
Agreement, the parties may select a retired judge as their
arbitrator. There is no limitation in the Agreement that the
retired judge had to have worked in a law firm, let alone one with
more than 25 members. McQueen does not claim, nor could she,
that retired judges cannot be neutral in employment cases. The
fact that the Agreement lists lawyers as additional potential
arbitrators does not deprive McQueen of a neutral arbitrator.
Stated otherwise, McQueen frames her argument as if her only
choice for an arbitrator is an attorney from a law firm with more

      2  We question whether counsel’s methodology would
produce valid statistical data to support her conclusion. We
do not have to decide this issue because the Agreement does not
limit the pool of arbitrators to practicing attorneys.

                                  16
than 25 attorneys. Neither the record nor the language of the
Agreement supports McQueen’s argument.
       Finally, although the trial court appears to have concluded
that requiring that an attorney arbitrator be licensed for 10 years
is evidence of lack of neutrality, no party advances this argument
on appeal. The parties appear to agree that the requirement that
an attorney possess 10 years of experience does not reflect a bias
to either party. We also agree with that proposition. Once again,
the parties do not have to select a practicing attorney at all for
their arbitrator but may select a retired judge.

      c.    PAGA waiver
      McQueen argues that the Agreement violates Armendariz
because it prevents her from asserting a claim under PAGA or
benefitting from a PAGA claim asserted by someone else. Under
PAGA, “ ‘an “aggrieved employee” may bring a civil action
personally and on behalf of other current or former employees to
recover civil penalties for Labor Code violations. [Citation.] Of
the civil penalties recovered, 75 percent goes to the Labor and
Workforce Development Agency, leaving the remaining
25 percent for the “aggrieved employees.” [Citation.]’ ” (Iskanian
v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348,
380 (Iskanian).) A judgment in a PAGA action binds the named
employee and any other aggrieved employee. (Ibid.)
      We agree with McQueen that PAGA waivers in arbitration
agreements are unenforceable. In Iskanian, our high court held
that employees’ right to bring a PAGA action is unwaivable.
(Iskanian, supra, 59 Cal.4th at p. 383.) “[W]here . . . an
employment agreement compels the waiver of representative
claims under the PAGA, it is contrary to public policy and
unenforceable as a matter of state law.” (Id. at p. 384.)

                                   17
       The question is whether the illegal PAGA waiver
invalidates the entire Agreement or whether it can be severed
from the Agreement. Nothing in Iskanian supports the
proposition that the presence of a PAGA waiver automatically
invalidates the entire arbitration agreement. Indeed, the
Iskanian court concluded that where an arbitration agreement
contains an unenforceable PAGA waiver but is otherwise
enforceable, the PAGA claims must proceed in “some forum”
while the other claims proceed in arbitration. (Iskanian, supra,
59 Cal.4th at p. 391.)
       Although here the trial court did not consider severance, we
may do so in the first instance on appeal. Because only one
provision is unlawful and “that provision can easily be severed
without affecting the remainder of the agreement, the proper
course is to do so.” (Dotson, supra, 181 Cal.App.4th at p. 985.)
Under these circumstances, a trial court would abuse its
discretion in declining to sever the single offending provision.
(See Farrar v. Direct Commerce, Inc. (2017) 9 Cal.App.5th 1257,
1275 (Farrar) [trial court abused its discretion in invalidating
entire agreement where only one provision was unconscionable].)
       Further, here, severance is the only course consistent with
the parties’ intent as demonstrated by the following language in
the Agreement: “In the event that any of the terms or provisions
of this Agreement are [sic] found to be legally unenforceable, then
the remaining terms and conditions shall nevertheless be fully
enforceable without regard to any such provision or terms that
are found to be legally unenforceable.” (Keene v. Harling (1964)
61 Cal.2d 318, 320 [“ ‘ . . . Whether a contract is entire or
separable depends upon its language and subject matter, and this
question is one of construction to be determined by the court

                                   18
according to the intention of the parties. If the contract is
divisible, the first part may stand, although the latter is illegal.
[Citation.]’ ”].)
       Although McQueen opposes severance, she cites no legal
authority supporting invalidating the entire Agreement.3 Her
reliance on Iskanian is misplaced because in Iskanian, the high
court remanded the case to the trial court to determine, among
other things, whether individual claims should be arbitrated
while the representative PAGA action is being litigated.
(Iskanian, supra, 59 Cal.4th at p. 392.) McQueen cites
Armendariz, supra, 24 Cal.4th at pp. 124–125 for the proposition
that “severance is disfavored in most circumstances.”
Armendariz does not so state. Instead, Armendariz explained
that the court must determine whether the illegality is collateral,
and if it is, severance is appropriate. (Id. at p. 124.) In contrast,
if the agreement contains multiple illegal provisions or is
permeated by an unlawful purpose, severance is inappropriate.
(Ibid.) As set forth in our opinion, we reject McQueen’s argument
that any other provision of the Agreement violates Armendariz or
is unenforceable or substantively unconscionable. Accordingly,
we reject McQueen’s argument that the Agreement is permeated
with unconscionability.
       Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, also cited by
McQueen, echoes Armendariz. Fitz states: “In Armendariz the
California Supreme Court held that more than one unlawful
provision in an arbitration agreement weighs against severance.”
(Fitz, at p. 726.) In Fitz, there was no single provision that the

      3 At oral argument, McQueen’s counsel acknowledged that
severance would be appropriate if the PAGA waiver were the only
offending provision.

                                    19
court could strike in order to avoid unconscionability and
therefore the court held the entire arbitration agreement was
invalid. (Id. at pp. 727–728.) In contrast, here, only the PAGA
waiver in the Agreement is invalid.
       Finally, McQueen argues that severing the unlawful
provision will encourage employers to impose illegal clauses on
other employees and discourage employers from modifying their
unlawful agreements, thereby condoning a “disregard for the
law.” Although the better course would have been for ECJ to
modify its agreement after Iskanian invalidated PAGA waivers,
any such modification would have had no impact on this case.
There is no PAGA claim in this case; the PAGA waiver could not
have imposed a burden on McQueen or been unfair to her. (Cf.
Torrecillas, supra, 52 Cal.App.5th at p. 500 [describing plaintiff’s
claim under PAGA odd when plaintiff did not sue under that
law].) McQueen’s speculation about ECJ’s incentive for future
modification is insufficient to overcome Armendariz’s instruction
that “[i]f 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 . . . then such severance . . . [is]
appropriate.” (Armendariz, supra, 24 Cal.4th at p. 124.)

3.    Although the Agreement is Procedurally
      Unconscionable, It is Not Substantively
      Unconscionable and Therefore Is Not Invalid
      An agreement to arbitrate, like any other contract, is
subject to revocation if the agreement is unconscionable.
(Armendariz, supra, 24 Cal.4th at pp. 98, 99.) “Unconscionability
includes both substantive and procedural elements. [Citation.]
Procedural unconscionability addresses the manner in which
agreement to the disputed term was sought or obtained, such as

                                    20
unequal bargaining power between the parties and hidden terms
included in contracts of adhesion. [Citation.] Substantive
unconscionability addresses the impact of the term itself, such as
whether the provision is so harsh or oppressive that it should not
be enforced. [Citation.] These elements, however, need not be
present to 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.’ ” (Szetela v. Discover
Bank (2002) 97 Cal.App.4th 1094, 1099–1100, fn. omitted
(Szetela), abrogated on another ground in AT&T Mobility LLC v.
Concepcion (2011) 563 U.S. 333, 346–348.)
      McQueen argues that the Agreement is procedurally and
substantively unconscionable. McQueen, as the party resisting
arbitration, had the burden of proof to show unconscionability.
(Szetela, supra, 97 Cal.App.4th at p. 1099.)

      a.    Procedural unconscionability
      “ ‘[A] finding of procedural unconscionability does not mean
that a contract will not be enforced, but rather that courts will
scrutinize the substantive terms of the contract to ensure they
are not manifestly unfair or one-sided. [Citation.] . . . [T]here are
degrees of procedural unconscionability. At one end of the
spectrum are contracts that have been freely negotiated by
roughly equal parties, in which there is no procedural
unconscionability. . . . Contracts of adhesion that involve
surprise or other sharp practices lie on the other end of the
spectrum. [Citation.] Ordinary contracts of adhesion, although
they are indispensable facts of modern life that are generally
enforced [citation], contain a degree of procedural
unconscionability even without any notable surprises, and “bear

                                    21
within them the clear danger of oppression and overreaching.”
[Citation.]’ ” (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237,
1244 (Baltazar).)
       “[T]he initial question regarding procedural
unconscionability is whether the contract was one of adhesion,
namely, 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.” ’ ” (Dougherty v. Roseville Heritage Partners (2020)
47 Cal.App.5th 93, 103.)
       Here, the Agreement was procedurally unconscionable
because McQueen had no choice but to sign it if she wanted
employment with ECJ. ECJ, moreover, gave her no opportunity
to negotiate the terms of the Agreement. In opposing the motion
to compel arbitration, McQueen proffered her own declaration
stating that an ECJ representative told McQueen that she had to
sign a stack of documents as a condition of employment, and that
included in that stack was the Agreement. ECJ does not dispute
McQueen’s factual assertions. Her uncontested declaration
describes a contract of adhesion, which is evidence of procedural
unconscionability. (Sanchez v. Valencia Holding Co., LLC (2015)
61 Cal.4th 899, 915 [“adhesive nature of contract is sufficient to
establish some degree of procedural unconscionability”].)

      b.    Substantive unconscionability
       Substantive unconscionability focuses on “ ‘ “overly harsh
or one-sided results.” ’ ” (Baltazar, supra, 62 Cal.4th at p. 1243.)
McQueen argues that the Agreement was substantively
unconscionable because she is required to bear costs of
arbitration and there was a false appearance of mutuality in
selecting an arbitrator. We have already rejected those

                                    22
arguments as inconsistent with the plain language of the
Agreement. Based on reading the entire Agreement, which we
must, McQueen is responsible only for those costs and fees she
would otherwise have incurred in litigation in court. As we have
also explained, there is nothing in the Agreement depriving
McQueen of a neutral arbitrator.
      We need not further consider McQueen’s argument that the
PAGA waiver renders the Agreement substantively
unconscionable, because as explained above, the language of the
Agreement permits severing the PAGA waiver from the
Agreement, and we reject McQueen’s contention that the
Agreement is permeated by unconscionability. Because McQueen
demonstrates only procedural unconscionability, we enforce the
Agreement. (Baltazar, supra, 62 Cal.4th at p. 1243; Farrar,
supra, 9 Cal.App.5th at p. 1265.)

4.    Delegation Clause
       On appeal, defendants argue for the first time that the
delegation clause requires the arbitrator to decide whether the
Agreement is enforceable.4 We conclude defendants forfeited this
argument by failing to raise it below.
       A claim of error may be impliedly waived if the appellant
failed to bring the error to the trial court’s attention in an
appropriate manner. (Mesecher v. County of San Diego (1992)

      4  Defendants rely on the following language in the
Agreement: “The arbitrator shall have exclusive authority to
resolve any Claim, including, but not limited to, a dispute
relating to the interpretation, applicability, enforceability, or
formation of this Agreement, or any contention that all or any
part of this Agreement is void or voidable.”

                                    23
9 Cal.App.4th 1677, 1685.) In their motion to compel arbitration,
defendants did not assert that an arbitrator should decide the
enforceability of the Agreement. Instead, “Defendants
respectfully request[ed] that the Court grant” its petition to
compel arbitration. Although we have discretion on appeal to
consider an appellant’s new theory on a pure question of law
(Greenwich S.F., LLC v. Wong (2010) 190 Cal.App.4th 739, 767),
we decline to consider defendants’ delegation argument, which
directly conflicts with its argument in the trial court. Defendants
either invited the error or expressly agreed to the procedure now
challenged on appeal. It took actions directly opposed with the
right to arbitrate the enforceability of the Agreement.
Defendants cannot now complain that the court did not have
authority to decide the very issues defendants requested the
court decide.5 (Securitas Security Services USA, Inc. v. Superior
Court (2015) 234 Cal.App.4th 1109, 1124 [failure to raise
contention that arbitrator should have decided severability was
invited error].)

      5 Because we conclude defendants forfeited their argument
based on the delegation clause, we need not consider McQueen’s
argument that the delegation clause is unenforceable.

                                   24
                         DISPOSITION
      The order denying defendants’ motion to compel arbitration
is reversed and the matter is remanded to the trial court with
directions to enter a new order severing the PAGA waiver from
the Agreement and granting Ervin Cohen & Jessup LLP’s,
Ronnie Dechezeray’s, and David Tarlow’s petition to compel
arbitration. The parties shall bear their own costs on appeal.
      NOT TO BE PUBLISHED.

                                           BENDIX, J.

We concur:

             ROTHSCHILD, P. J.

             FEDERMAN, J.*

      * Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.

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