Court Opinion

ID: 9388777
Source: CourtListenerOpinion
Date Created: 2023-04-21 17:02:55.780694+00
Date Added: 2024-06-11T17:18:22.502442
License: Public Domain

Filed 4/21/23

                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                         DIVISION EIGHT

 EVANGELINA YANEZ                     B314490
 FUENTES,
                                      Los Angeles County
         Plaintiff and Respondent,    Super. Ct. No. 20STCV35350

         v.

 EMPIRE NISSAN, INC., et al.,

         Defendants and Appellants.

     APPEAL from an order of the Superior Court of
Los Angeles County, Mel Red Recana, Judge. Reversed.
     Fisher & Phillips, John M. Polson, Tyler Rasmussen, Bret
Martin, Megan E. Walker and Christopher C. Hoffman for
Defendants and Appellants.
     Shegerian & Associates, Carney R. Shegerian and Victoria
A. Hane; Javanmardi Law|Holmquist Law, Peter A. Javanmardi
and Marc A. Holmquist for Plaintiff and Respondent.
                       ____________________
       Evangelina Yanez Fuentes signed an arbitration agreement
with Empire Nissan, Inc. Nissan fired Fuentes, she sued, and
Nissan moved to compel arbitration. The trial court ruled the
arbitration contract was unconscionable. The unconscionability
defense has two mandatory elements: a party must establish
both procedural and substantive unconscionability. (OTO, L.L.C.
v. Kho (2019) 8 Cal.5th 111, 125 (Kho).) We reverse because
there was a fatal omission: no substantive unconscionability.
       By coincidence, this arbitration contract is substantially
similar to the form Nissan arbitration contract in another case
we decide today: Basith v. Lithia Motors, Inc. (Apr. 21, 2023,
B316098) ___ Cal.App.5th ___. The contract also is substantially
similar to contracts in other cases, as we will describe.
                                  I
       When Fuentes applied to work for Nissan, she signed paper
documents that included an “Applicant Statement and
Agreement.” Below that heading, the print in this one-page form
was strikingly minute and, in the record photocopy, blurry to
boot. We append this one-page form to this opinion. (See
appendix A, post.) The tiny and blurred print on this copy
renders it largely unreadable. We also append a copy of its text,
in larger font, as appendix B, post.
       The longest paragraph squeezed something like 900 words
into about three vertical inches. We quote these hundreds of
words, which are the arbitration agreement in this case. To
facilitate comprehension, we italicize the 12 key words and block
indent this mammoth paragraph:

                               2
“I also acknowledge that the Company utilizes a system of
alternative dispute resolution which involves binding
arbitration to resolve all disputes which may arise out of
the employment context. Because of the mutual benefits
(such as possible reduced expense and possible increased
efficiency) which private binding arbitration can provide
both the Company and myself, I and the Company both
agree that any claim, dispute, and/or controversy that
either party may have against one another (including, but
not limited to, any claims of discrimination and
harassment, whether they be based on the California Fair
Employment and Housing Act, Title VII or the Civil Rights
Act of 1964, as amended, as well as all other applicable
state or federal laws or regulations) which would otherwise
require or allow resort to any court or other governmental
dispute resolution forum between myself and the Company
(or its owners, directors, officers, managers, employees,
agents, and parties affiliated with its employee benefit and
health plans) arising from, related to, or having any
relationship or connection whatsoever with my seeking
employment with, employment by, or other association with
the Company, whether based on tort, contract, statutory, or
equitable law, or otherwise, (with the sole exception of
claims arising under the National Labor Relations Act
which are brought before the National Labor Relations
Board, claims for medical and disability benefits under the
California Workers’ Compensation Act, and Employment
Development Department claims) shall be submitted to and
determined exclusively by binding arbitration. In order to
provide for the efficient and timely adjudication of claims,

                          3
the arbitrator is prohibited from consolidating the claims of
others into one proceeding. This means that an arbitrator
will hear only my individual claims and does not have the
authority to fashion a proceeding as a class or collective
action or to award relief to a group of employees in one
proceeding. Thus, the Company has the right to defeat any
attempt by me to file or join other employees in a class,
collective, or joint action lawsuit or arbitration (collectively
‘class claims’). I further understand that I will not be
disciplined, discharged, or otherwise retaliated against for
exercising my rights under Section 7 of the National Labor
Relations Act, including but not limited to challenging the
limitation on a class, collective, or joint action. I
understand and agree that nothing in this agreement shall
be construed so as to preclude me from filing any
administrative charge with, or from participating in any
investigation of a charge conducted by any government
agency such as the Department of Fair Employment and
Housing and/or the Equal Employment Opportunity
Commission; however, after I exhaust such administrative
process/investigation, I understand and agree that I must
pursue any such claims through this binding arbitration
procedure. I acknowledge that the Company’s business and
the nature of my employment in that business affect
interstate commerce. I agree that the arbitration and this
Agreement shall be controlled by the Federal Arbitration
Act, in conformity with the procedures of the California
Arbitration Act (Cal. Code Civ. Proc. sec 1280 et seq.,
including section 1283.95 and all of the Act’s other
mandatory and permissive rights in discovery). However,

                            4
in addition to requirements imposed by law, any arbitrator
herein shall be a retired California Superior Court Judge
and shall be subject to disqualification on the same grounds
as would apply to a judge of such court. To the extent
applicable in civil actions in California courts, the following
shall apply and be observed: all rules of pleading (including
the right of demurrer), all rules of evidence, all rights to
resolution of the dispute by means of motions for summary
judgment, judgment on the pleadings, and judgment under
Code of Civil Procedure Section 631.8. Resolution of the
dispute shall be based solely upon the law governing the
claims and defenses pleaded, and the arbitrator may not
invoke any basis (including, but not limited to, notions of
‘just cause’) other than such controlling law. The arbitrator
shall have the immunity of a judicial officer from civil
liability when acting in the capacity of an arbitrator, which
immunity supplements any other existing immunity.
Likewise, all communications during or in connection with
the arbitration proceedings are privileged in accordance
with Cal. Civil Code Section 47(b). As reasonably required
to allow full use and benefit of this Agreement’s
modifications to the Act’s procedures, the arbitrator shall
extend the times set by the Act for the giving of notices and
setting of hearings. Awards shall include the arbitrator’s
written reasoned opinion. If CCP § 1284.2 conflicts with
other substantive statutory provisions or controlling case
law, the allocation of costs and arbitrator fees shall be
governed by said statutory provisions or controlling case
law instead of CCP § 1284.2. Both the Company and I
agree that any arbitration proceeding must move forward

                           5
      under the Federal Arbitration Act (9 U.S.C. § § 3-4) even
      though the claims may also involve or relate to parties who
      are not parties to the arbitration agreement and/or claims
      that are not subject to arbitration, thus the court may not
      refuse to enforce this arbitration agreement and may not
      stay the arbitration proceeding despite the provisions of
      California Code of Civil Procedure § 1281.2(c). I
      UNDERSTAND BY AGREEING TO THIS BINDING
      ARBITRATION PROVISION, BOTH I AND THE
      COMPANY GIVE UP OUR RIGHTS TO TRIAL BY JURY.”
      We pause to note this lengthy paragraph is substantially
similar to the arbitration contract not only in Basith, but also to
the arbitration contracts in Kho, supra, 8 Cal.5th at page 119 and
Davis v. TWC Dealer Group, Inc. (2019) 41 Cal.App.5th 662, 665–
674 (Davis). These cases all involved car dealerships. As was
true here, the employer in Basith also was a Nissan dealership,
although not the same one. Kho and Davis involved Toyota
dealerships. (Kho, at p. 118; Davis, at p. 665.) Kho is unlike this
case and unlike Basith, however, because our cases have no issue
about administrative Berman hearings. The issue about Berman
hearings was central to the Kho holding, where the majority and
dissenting opinions used the word “Berman” over 100 times.
Davis we discuss at the end of this opinion.
      We return to the text of this arbitration agreement. After
the just-quoted paragraph and near the bottom of this one-page
form, this contract stated no “agreements contrary to the express
language of this agreement are valid unless they are in writing
and signed by the President of the Company . . . .”

                                 6
       Nissan later asked Fuentes to sign a second agreement.
This one concerned trade secrets; it did not mention
arbitration. About six months later, Nissan asked Fuentes to
sign a third contract: another trade secret agreement
substantially identical to the second agreement. The two trade
secret agreements had integration clauses. Each stated the
contract was the entire agreement between the parties
“regarding the secrecy, use and disclosure of the Company’s
Proprietary Information, Trade Secrets and Confidential
Information and this Agreement supersedes any and all prior
agreements regarding these issues.” These two agreements
permitted Nissan to seek injunctive relief in the event of
breach. The agreements also contained a severance provision
allowing “any court of competent jurisdiction” to sever invalid,
illegal, or unenforceable provisions. The final trade secret
contract mirrored the earlier one and did not refer to arbitration.
       After termination, Fuentes sued Nissan, as well as Romero
Motors Corporation and Oremor Management & Investment
Company, for discrimination and wrongful termination. We call
all three defendants Nissan. Nissan moved to compel arbitration.
The trial court found the arbitration agreement unconscionable
and denied the motion. Nissan appealed.
                                  II
       This dispute must go to arbitration.
                                  A
       The governing law is both federal and state in character.
We begin with federal law.
       The contract provided the Federal Arbitration Act (9 U.S.C.
§§ 1 et seq; the Act) would control, and the Act indeed does

                                7
control: selling Nissan cars affects interstate commerce. No one
disputes this.
      Congress passed the Act in response to judicial hostility to
arbitration. The Act contains an enforcement mandate, which
renders agreements to arbitrate enforceable as a matter of
federal law, and a saving clause, which permits invalidation of
arbitration clauses on grounds applicable to any contract. (9
U.S.C. § 2; see AT&T Mobility LLC v. Concepcion (2011) 563 U.S.
333, 339–340 (Concepcion); Epic Systems Corp. v. Lewis (2018)
138 S.Ct. 1612, 1621–1622.)
      The result is an equal-treatment principle: a state court
may invalidate an arbitration agreement according to generally
applicable contract defenses like unconscionability, but not on the
basis of legal rules that apply only to arbitration or that derive
their meaning from the fact that an agreement to arbitrate is at
issue. Under this principle, the federal Act preempts any state
rule discriminating on its face against arbitration, like laws
prohibiting the arbitration of a particular type of claim. Even
rules that are generally applicable as a formal matter are not
immune to preemption by the Act. (Viking River Cruises, Inc. v.
Moriana (2022) __ U.S. __ [142 S.Ct. 1906, 1917–1918] (Viking).)
      State courts cannot invalidate arbitration contracts on the
basis of a special or selective arbitration-only version of
unconscionability. This has been true at least since Concepcion
in 2011. (See Concepcion, supra, 563 U.S. at pp. 341–343.) That
decision observed the judicial hostility towards arbitration had
manifested itself in a great variety of devices and formulas that
declared arbitration against public policy. The Concepcion
decision also noted that, in the past, California courts had been

                                8
more likely to hold arbitration contracts unconscionable than
other contracts. (Id. at p. 342.)
       In Concepcion and in the many cases that have followed it,
the Supreme Court of the United States has prohibited state
courts from selectively disfavoring arbitration agreements. (E.g.,
DIRECTV, Inc. v. Imburgia (2015) 577 U.S. 47, 53 [lower court
judges are free to note their disagreement with a decision of this
Court, but the Supremacy Clause forbids state courts to
dissociate themselves from federal law because of disagreement
with its content or a refusal to recognize a higher court’s superior
authority]; see also id. at p. 54 [“we must decide whether the
decision of the California court places arbitration contracts ‘on
equal footing with all other contracts’ ”] [quoting Buckeye Check
Cashing, Inc. v. Cardegna (2006) 546 U.S. 440, 443].)
       When “California courts would not interpret contracts other
than arbitration contracts the same way,” that selective judicial
hostility to arbitration is preempted. (DIRECTV, Inc. v.
Imburgia, supra, 577 U.S. at p. 55; see also id. at pp. 55–59.)
       Turning now to state law, our review is independent, for
the facts are undisputed. Fuentes had the burden of establishing
unconscionability. (Kho, supra, 8 Cal.5th at p. 126.)
       The unconscionability defense has two parts: procedural
unconscionability and substantive unconscionability. (Kho,
supra, 8 Cal.5th at p. 125.) As the adjectives imply, procedural
unconscionability concerns the fairness of the procedures
surrounding the formation of the contract, while substantive
unconscionability goes to whether its substance is unfair to the
employee. (Ibid.)

                                 9
      In other words, one issue focuses on the procedures leading
up to the contract. The other issue is whether the final deal is
fair.
      Fuentes must show both procedural and substantive
unconscionability to establish the defense. These two elements
need not be present to the same degree. Rather we evaluate
them on a sliding scale. The more substantively oppressive the
contract terms, the less evidence of procedural unconscionability
is required to conclude that the contract is unenforceable.
Conversely, the more deceptive or coercive the bargaining tactics
employed, the less substantive unfairness is required. (Kho,
supra, 8 Cal.5th at pp. 125–126.)
      Nearly every form employment contract can be perceived as
having some procedural unfairness. Employees may lack power
to bargain at all. Sometimes employers insist, “sign it or no job.”
(Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1241, 1244.)
When the law attributes some procedural unfairness to every
form employment contract, the real fight boils down to whether
the substance of the final terms are fair. We must enforce this
contract if its substance is even-handed.
                                  B
      We reverse the trial court’s ruling because this contract
lacks substantive unconscionability. Its substance is fair.
      Fuentes launches five attacks on the substance of this
contract. Each attack is unsuccessful.
                                  1
      Fuentes argues the tiny and unreadable print of Nissan’s
form makes the substance of the contract unfair.
      Tiny font size and unreadability make it hard or impossible
for employees to read, and thus to understand, the contract.

                                10
(E.g., Fisher v. MoneyGram Intern., Inc. (2021) 66 Cal.App.5th
1084, 1097-1103, 1107 [six-point font justified “an extreme
assessment of procedural unconscionability”].)
       Tiny font size and unreadability go to the process of
contract formation, however, and not the substance of the
outcome. Font size and readability thus are logically pertinent to
procedural unconscionability and not to substantive
unconscionability.
       To make this logical point plain, imagine shrinking a
contract fair in substance down to less than one–point font: a font
so minute as to be completely unreadable without a strong
magnifying glass. The fairness of the contract’s substance,
however, remains unchanged. Font is irrelevant to fairness.
       We go over this significant point in more detail.
       Fuentes accurately summarizes the difference between
procedural and substantive unconscionability. We quote page 17
of her brief. “Procedural unconscionability specifically ‘concerns
the manner in which the contract was negotiated and the
circumstances of the parties at that time.’ (Kinney v. United
Health Care Services, Inc. (1999) 70 Cal.App.4th 1322, 1329.)
Substantive unconscionability focuses on overly harsh or one-
side[d] results.”
       Font size is not the substance of a contract. Terms can be
fair or unfair in substance, no matter the font size. When an
employer puts a contract in an unreadably minute font, this
practice definitely is problematic, but not for substantive reasons.
Rather, during contract formation, an employer’s practice of
using tiny print creates the same potential for surprise as can
practices like using baffling legalese, or imposing coercive time
pressures, or preventing employees from consulting counsel. All

                                11
deceptive and coercive procedures by employers can make it more
likely employees do not fully understand, or do not understand at
all, the arrangement to which they supposedly are assenting. If
it is impossible to read, it will be impossible to understand. But
once the parties have completed the contracting procedures,
whether the substantive result is unconscionable is a
conceptually separate question.
       Our Supreme Court made these points in Kho. (Kho,
supra, 8 Cal.5th at pp. 125–129.) Kho did not hold that font size
counts twice in the analysis of unconscionability.
       Under California law, an agreement must be both
procedurally and substantively unconscionable to be
unenforceable. Allowing a single feature to count for both
categories would nullify this requirement.
       To nullify the element of substantive unconscionability
would change the law. That change would make the
unconscionability doctrine into a one-element defense where the
sole issue would be whether there is procedural
unconscionability. This would tend to call into question all form
contracts—a profound change indeed. This change would be
profound because there is procedural unconscionability whenever
one party has superior bargaining power and presents a contract
of adhesion on a take-it-or-leave-it basis. That describes
innumerable contracts, especially in the online world, where the
standard contract is take-it-or-leave-it.
       Just as it would be momentous to nullify the element of
substantive unconscionability, so too would it be unwise to dilute
or trivialize it by smuggling in procedural objections masked as
substantive points. Watering down substantive
unconscionability in this way would tend towards the same
significant doctrinal revision as eliminating the substantive

                                12
element altogether. Nor could courts cabin the development by
making the new rules apply only to arbitration contracts.
Arbitration-specific rules are preempted. (Concepcion, supra, 563
U.S. at pp. 341–343; DIRECTV, Inc. v. Imburgia, supra, 577 U.S.
at pp. 55–59.)
       Is it strange that a contract can be enforced when it is
nearly impossible to read? Contract law enforces contracts you
cannot read at all, if you are blind, or illiterate, or the contract
language is foreign to you. (E.g., Caballero v. Premier Care Simi
Valley LLC (2021) 69 Cal.App.5th 512, 518–19 [inability to read
English]; Randas v. YMCA of Metro. Los Angeles (1993) 17
Cal.App.4th 158, 160, 163 [“literate in Greek but not English”],
citing 3 Corbin, Contracts (1960) § 607, pp. 668–669.) Fuentes
cites no case invalidating a contract solely because one side
lacked the ability to read it and without regard to whether the
substance was fair. Nor does she contend she asked for a more
legible version and Nissan refused.
       In sum, tiny and unreadable print indeed is a problem, but
is a problem of procedural unconscionability. We cannot double
count it as a problem of substantive unconscionability.
                                    2
       Fuentes argues the arbitration arrangement lacks
mutuality. She contends the arbitration contract is unfair
because her claims must all go to arbitration while Nissan, via
the trade secret contracts, has left itself free to go to court.
Fuentes says the second and third agreements about trade
secrets modified the first contract about arbitration in a way that
destroyed mutuality.
       It is said that, in assessing substantive unconscionability,
the paramount consideration is mutuality. (Nyulassy v. Lockheed
Martin Corp. (2004) 120 Cal.App.4th 1267, 1287 (Nyulassy).) Is

                                13
this true? Is mutuality a “generally applicable” contract defense?
(Concepcion, supra, 573 U.S. at p. 343.) The parties cite cases
solely in the arbitration context. They have not put this point in
dispute, however, and we do not pursue the question out of
respect for their understanding of this controversy. The question
is inessential to our decision because, assuming mutuality indeed
is a generally applicable requirement, this contract has it.
       Assessing mutuality requires us to interpret the interplay
between the agreements. We independently review this question
of contract interpretation. (RMR Equip. Rental, Inc. v.
Residential Fund 1347, LLC (2021) 65 Cal.App.5th 383, 392.)
       Our starting point is, as always, the words of the contract.
When different contracts relate to the same matter between the
same parties, we interpret them together, meaning we aim to
make the parts into a consistent and sensible whole. (Civ. Code,
§ 1642.) We do so with awareness that federal and California law
strongly favor arbitration. (9 U.S.C. § 2; Kho, supra, 8 Cal.5th at
p. 125.) We search for a lawful and reasonable interpretation.
(Civ. Code, § 1643.)
       Under these principles, Fuentes’s argument is in error.
The three contracts she entered preserve mutuality.
       The first contract—the arbitration agreement itself—is
completely mutual: Fuentes and Nissan both must use
arbitration exclusively. Neither can go to court. The key
language was, with our italics, that “I and the Company both
agree that any claim . . . shall be . . . determined exclusively by
binding arbitration.”
       Fuentes says the problem arose, not in the arbitration
agreement, but from the later trade secret contracts. She argues
the later contracts allow Nissan recourse to court for injunctions

                                14
and, by virtue of their integration clauses, these contracts
eclipsed the arbitration agreement and destroyed its mutuality.
      Fuentes misinterprets the contracts. Reading the contracts
together, Nissan has a right to seek trade secret injunctions only
in arbitration. (O’Hare v. Municipal Resource Consultants (2003)
107 Cal.App.4th 267, 278 [“it is well settled arbitrators commonly
provide equitable relief as part of their decision”].) This
preserves mutuality.
      The arbitration contract has supervening force because it
specifies it can be modified only in a writing signed by the
company president, and that president never signed any
modification. Together with the principle that the law strongly
favors arbitration, these points win the day for Nissan.
      The reasonable interpretation is that the agreements,
taken as a whole, preserve mutuality.
      Added support for this conclusion flows from the fact the
trade secret contracts make no reference to arbitration. It would
be incongruous to interpret contracts unrelated to arbitration as
destroying a contract centrally concerned with arbitration. (Cf.
Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243
Cal.App.4th 1, 15–16 [termination letter did not supersede
agreement to arbitrate where letter with integration clause did
not address arbitration].)
      Fuentes disputes this conclusion by pointing to the
severability paragraph in the trade secret contracts, to which we
add emphasis:
      “Each provision of this Agreement is intended to be
severable. If any court of competent jurisdiction determines that
one or more of the provisions of this Agreement, or any part
thereof, is or are invalid, illegal or unenforceable, such invalidity,

                                 15
illegality or unenforceability shall not affect or impair any other
provision of this Agreement, and this Agreement shall be given
full force and effect while being construed as if such an invalid,
illegal or unenforceable provision had not been contained within
it. If the scope of any provision of this Agreement is found to be
too broad to permit enforcement of such provision to its full
extent, you consent to judicial modification of such provision and
enforcement to the maximum extent permitted by law.”
        Fuentes incorrectly maintains the effect of the italicized
word “court” is to abrogate the mutuality of the arbitration
agreement and to doom it.
        This interpretation is unreasonable. In light of our state’s
strong policy favoring arbitration, the reasonable interpretation
of the severability clause is that it protects the balance of the
agreement from developing case law decisions that unexpectedly
invalidate some provision within the agreement. This reasonable
interpretation preserves mutuality and arbitration.
        This reasonable interpretation extends through the final
sentence quoted above, which refers to “judicial” modification.
An arbitrator does “judicial” work in an arbitration setting.
        Fuentes cites Carmona v. Lincoln Millennium Car Wash,
Inc. (2014) 226 Cal.App.4th 74 (Carmona), which is not on point.
In Carmona, the employee signed an employment agreement that
contained an arbitration clause and a confidentiality
subagreement. (Id. at pp. 79–80.) The confidentiality
subagreement contained an enforcement clause explicitly
allowing the employer to seek relief for breach of the agreement
in either court or arbitration. (Ibid.) By contrast, the trade
secret agreements here neither address arbitration nor give
Nissan a choice between court or arbitration.

                                16
      In sum, the trial court erred by faulting this arbitration
agreement for a lack of mutuality. Properly interpreted, the
agreement is even-handed and enforceable.
                                  3
      We understand Fuentes to argue that, even if there
actually is mutuality as a matter of law, the contract is still
substantively unconscionable and unfair because the existence of
separate contracts would be confusing to a layperson. This
argument is incorrect.
      In essence, this argument is that separate contracts are
unfair: the whole thing was not user-friendly. Certainly a
profusion of contracts can be a problem. But the problem is of
procedural rather than substantive unconscionability. Multiple
contracts are like tiny print or obscure legalese or extreme time
limits that force one to read in a rush. All these procedural
problems make it hard to understand the deal. But just as a fair
contract can be written in microscopic font, so too can it be
written in confusing legalese and in multiple contracts.
      In short, there was no substantive unconscionability
because there was full mutuality. Whether the contracts’
multiplicity or convoluted language would be confusing to
laypeople is an issue, but not an issue of substantive
unconscionability. To mistake a procedural objection for a
problem of substance would unwisely dilute this doctrine, as we
have described.
                                  4
      Another argument about substantive unfairness is that
Fuentes was the only one to sign the arbitration agreement, and
this shows a lack of mutuality.

                               17
       This argument is misplaced. Nissan’s missing signature is
irrelevant to whether the substance of the contact is fair. A
missing signature cannot make a fair deal unfair.
       The presence of a signature might be pertinent to whether a
contract exists at all, but that is not our issue. The issue here is
only whether an existing contract is fair. These questions are
analytically separate.
       A signature can be important to show contractual assent,
but that is beside the point here: Nissan certainly assented to its
own arbitration agreement—the agreement that it drafted and
required Fuentes to sign and that it now is trying to enforce. In
this setting, no signature was necessary to prove Nissan’s assent.
(Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th
165, 176 [what matters is whether there is agreement, not
whether there is a signature; agreement can be found from
conduct that ratifies or impliedly accepts the deal].) Had Nissan
not assented, there would be no contract at all. The trial court
expressly found the parties had entered a contract. Fuentes does
not challenge this finding on appeal.
                                    5
       Fuentes’s final argument is that the arbitration agreement
is unfair because it did not explain how to initiate arbitration.
This same invalid complaint appeared in a recent case. There, an
employee said an arbitration agreement was unfair because it
“did not tell her how to initiate arbitration.” (Alvarez v. Altamed
Health Services Corp. (2021) 60 Cal.App.5th 572, 590 (Alvarez).)
The Alvarez court rejected this complaint. It reasoned “the
failure to provide a copy of the arbitration rules generally raises
procedural unconscionability concerns only if there is a
substantively unconscionable provision in the omitted rules. The

                                18
agreement in this case states the procedures of the California
Arbitration Act will apply. There are no substantively
unconscionable rules in the Act.” (Ibid.)
       We follow Alvarez. Fuentes’s agreement states the
procedural rules of the California Arbitration Act apply. Fuentes
does not challenge these rules, which are not unconscionable. In
this situation, failing to include instructions does not establish
substantive unconscionability.
                                   6
       Fuentes urges us to follow Davis, which invalidated a
substantially similar arbitration agreement. We respectfully
disagree with Davis’s analysis of substantive unconscionability.
We see four problems.
       First, the Davis opinion conceived of font size as an issue of
substance. (Davis, supra, 41 Cal.App.5th at p. 674.) We have
explained why we believe this is improper double counting.
       Second, Davis suggested that it “can be argued” the
agreement was substantively unconscionable because only the
employee and not the employer had signed the form. (See Davis,
supra, 41 Cal.App.5th at p. 674.) Our analysis of the signature
issue, set forth above, is contrary to Davis’s tentative suggestion.
       Third, Davis also implied, without saying so expressly, that
there was substantive unconscionability because the employer
“has the unilateral right to change or modify the agreement at
any time, and without notice” to the employee. (See Davis, supra,
41 Cal.App.5th at pp. 674-675.)
       Case law counters Davis. (See Peng v. First Republic Bank
(2013) 219 Cal.App.4th 1462, 1473 [“the Agreement’s unilateral
modification provision is not substantively unconscionable”]; 24
Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199,

                                 19
1214 [“the modification provision does not render the contract
illusory”]; Serpa v. California Surety Investigations, Inc. (2013)
215 Cal.App.4th 695, 706 [“it has long been the rule that a
provision in an agreement permitting one party to modify
contract terms does not, standing alone, render a contract
illusory because the party with that authority may not change
the agreement in such a manner as to frustrate the purpose of
the contract”]; Harris v. TAP Worldwide, LLC (2016) 248
Cal.App.4th 373, 389; Avery Integrated Healthcare Holdings, Inc.
(2013) 218 Cal.App.4th 50, 61 [“An arbitration agreement
between an employer and an employee may reserve to the
employer the unilateral right to modify the agreement.”]; see
generally, Asmus v. Pacific Bell (2000) 23 Cal.4th 1, 16
[employer’s unilateral right to modify employment agreement
does not make agreement illusory]; cf. Peleg v. Neiman Marcus
Group, Inc. (2012) 204 Cal.App.4th 1425, 1433 [“If a modification
provision is restricted—by express language or by terms implied
under the covenant of good faith and fair dealing—so that it
exempts all claims, accrued or known, from a contract change,
the arbitration contract is not illusory.”].)
       Moreover, and alternatively, Fuentes forfeited this
unilateral modification argument. Her brief said nothing about
it. Nissan had no notice or opportunity to be heard on this claim.
       Fourth, Davis found substantive unconscionability because
the agreement’s “broad language could be read to preclude Labor
Code Private Attorneys General Act (PAGA; Lab. Code, § 2698 et
seq.) representative actions, a violation of public policy.” (Davis,
supra, 41 Cal.App.5th at pp. 675-676.) As support, Davis cited
Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59
Cal.4th 348, 383 (Iskanian). (Davis, at p. 676.) The Supreme

                                 20
Court of the United States, however, ruled that the Federal
Arbitration Act “preempts the rule of Iskanian insofar as it
precludes division of PAGA actions into individual and non-
individual claims through an agreement to arbitrate.” (Viking,
supra, 142 S.Ct. at p. 1924.)
       Once again, Fuentes also forfeited this PAGA argument.
Her brief never mentioned it. Nissan never got notice or an
opportunity to be heard on this point. Any discussion of PAGA
proceeds without briefing from the parties.
       We also distinguish this case from Davis, in two different
ways.
       From its initial paragraph to its last page, the Davis
opinion prominently focused on the attorney misconduct in the
case. (See Davis, supra, 41 Cal.App.5th at p. 665 [court
published to remind counsel of “the importance of candor toward
the court”], id. at p. 667 [“the quotation misrepresents the
agreements here”], ibid. [appellate defense counsel’s “conduct is
not to be condoned”], id. at p. 670 [“Such hyperbole has no place
here”], id. at p. 671 [“We are dumbfounded.”], id. at p. 676
[“Amazingly,” counsel at oral argument told court he had not
read the footnote about which the court had written him in a
letter], id. at p. 678 [“hard to imagine a more obvious violation” of
a professional conduct rule for attorneys].) We have no attorney
misconduct in this case.
       Nor do we have the three separate and internally-
contradictory arbitration contracts that troubled the Davis court.
(See Davis, supra, 41 Cal.App.5th at p. 675 [“In addition to the
internal confusion, the three agreements contain several
inconsistencies, if not downright contradictions.”].)

                                 21
      For these six reasons, we do not accept Fuentes’s
suggestion that we follow Davis.
      Given that there is no substantive unconscionability, we
need not and do not address procedural unconscionability. (Kho,
supra, 8 Cal.5th at p. 125 [the defense of unconscionability
requires both].)
                          DISPOSITION
      We reverse and direct the trial court to grant the motion to
compel arbitration. We award costs to the appellants.

                                           WILEY, J.

I concur:

            HARUTUNIAN, J.*

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

                                 22
STRATTON, P.J., Dissenting.
         The arbitration agreement speaks for itself. The print is so
fine it is unreadable without magnification. See if you can read it
without giving up. And it appears to include the identical font
and language found procedurally unconscionable in Davis v. TWC
Dealer Group, Inc. (2019) 41 Cal.App.5th 662 (Davis) and OTO,
L.L.C. v. Kho (2019) 8 Cal.5th 111 (Kho).
         How do we know the language and font are the same? Here
is a description of the agreement in Davis: “The first agreement
. . . is entitled ‘Applicant Statement and Agreement’ (hereinafter,
for consistency with the briefing, Agreement No. 1.) Agreement
No. 1 is one page long and consists of six paragraphs, all in
identical and small–and quite difficult to read–font. None of the
six paragraphs is labeled or titled, in boldface or otherwise. The
fourth of the six paragraphs is the one that refers to arbitration,
though hardly in language that is easy to comprehend. The
paragraph is 30 lines long, and ends with these three sentences:
‘If CCP § 1284.2 conflicts with other substantive statutory
provisions ore controlling case law, the allocation of costs and
arbitrator fees shall be governed by said statutory provisions or
controlling case law instead of CCP § 1284.2. Both the Company
and I agree that any arbitration proceeding must move forward
under the Federal Arbitration Act (9 U.S.C. §§ 3–4) even though
the claims may also involve or relate to parties who are not
parties in the arbitration agreement and/or claims that are not
subject to arbitration; thus, the court may not refuse to enforce
this arbitration agreement and may not stay the arbitration
proceeding despite the provisions of California Code of Civil
Procedure § 1281.2(c). I UNDERSTAND BY AGREEING TO
THIS BINDING ARBITRATION PROVISION BOTH I AND THE

                                 1
COMPANY GIVE UP OUR RIGHTS TO TRIAL BY JURY.’ ”
(Davis, supra, 41 Cal.App.5th at pp. 665–666.)
       Davis involved a second and third agreement as well. The
second agreement included the following language which is also
in the fourth mega-paragraph of the agreement under inspection
here: “ ‘Because of the mutual benefits (such as reduced expense
and increased efficiency) which private binding arbitration can
provide both the Company and myself, I and the Company both
agree that any claim, dispute, and/or controversy that either
party may have against one another (including, but not limited
to, any claims of discrimination and harassment, whether they be
based on the California Fair Employment and Housing Act, Title
VII of the Civil Rights Act of 1964, as amended, as well as all
other applicable state or federal laws or regulations) which would
otherwise require or allow resort to any court or other
governmental dispute resolution forum between myself and the
Company (or its owners, directors, officers, managers, employees,
agents, and parties affiliated with its employee benefit and
health plans) arising from, related to, or having any relationship
or connection whatsoever with my seeking employment with,
employment by, or other association with the Company, whether
based on tort, contract, statutory, or equitable law, or otherwise,
(with the sole exception of claims arising under the National
Labor Relations Act which are brought before the National Labor
Relations Board, claims for medical and disability benefits under
the California Workers’ Compensation Act ,and Employment
Development Department claims) shall be submitted to and
determined exclusively by binding arbitration.’ ” (Davis, supra,
41 Cal.App.5th at pp. 666–667, fn. 2.) The Davis court describes
this sentence as “15 lines long.” (Id. at p. 666.)

                                 2
       The Davis Court notes the language and font before it are
virtually identical to the language and font adjudged
procedurally unconscionable in the Kho case. (Davis, supra,
41 Cal.App.5th at pp. 671–672; Kho, supra, 8 Cal.5th at p. 119.)
Here is what our Supreme Court said about the virtually
identical language and font in Kho: “The facts also support the
trial court’s finding of surprise. The agreement is a paragon of
prolixity, only slightly more than a page long but written in an
extremely small font. The single dense paragraph covering
arbitration requires 51 lines. As the Court of Appeal noted, the
text is ‘visually impenetrable’ and ‘challenge[s] the limits of
legibility.’ [¶] The substance of the agreement is similarly
opaque. The sentences are complex, filled with statutory
references and legal jargon. The second sentence alone is 12 lines
long. . . . A layperson trying to navigate this block text, printed
in tiny font, would not have an easy journey.” (Kho, at p. 128.)
       All this is to say that I, like the trial court here and as
conceded by Nissan, would find this arbitration agreement
riddled with procedural unconscionability, as were the similar
agreements in Davis and Kho. Given the tiny font, prolixity, and
the trial court’s finding that this was a “take it or leave it”
contract of adhesion, I would find a very high degree of
procedural unconscionability, as did the trial court.
       I disagree with the majority on the issue of substantive
unconscionability. As did the courts in Davis and Kho, I would
also find this agreement sufficiently substantively
unconscionable. According to the Kho Court, substantive
unconscionability is concerned with terms that are unreasonably
favorable to the more powerful party. (Kho, supra, 8 Cal.5th at
p. 130.) “Substantive terms that, in the abstract, might not

                                3
support an unconscionability finding take on greater weight
when imposed by a procedure that is demonstrably oppressive.
Although procedural unconscionability alone does not invalidate
a contract, its existence requires courts to closely scrutinize the
substantive terms ‘to ensure they are not manifestly unfair or
one-sided.’ [Citation.] We hold that, given the substantial
procedural unconscionability here, even a relatively low degree of
substantive unconscionability may suffice to render the
agreement unenforceable.” (Id. at p.130.)
       Given the complete unreadability of this arbitration
agreement, I would find an extremely high degree of procedural
unconscionability, requiring then, as the sliding scale analysis
allows, a low degree of substantive unconscionability.
       Font and typeface have generally been linked to the
analysis of procedural unconscionability only, not substantive
unconscionability. However, when discussing substantive
unconscionability, the Kho Court appeared to endorse the idea
that “fine-print terms” would support a finding of substantive, as
well as procedural, unconscionability. (Kho, supra, 8 Cal.5th at
p. 130 [“Unconscionable terms ‘ “impair the integrity of the
bargaining process or otherwise contravene the public interest or
public policy” ’ or attempt to impermissibly alter fundamental
legal duties. [Citation.] They may include fine-print terms,
unreasonably or unexpectedly harsh terms regarding price or
other central aspects of the transaction, and terms that
undermine the nondrafting party’s reasonable expectations.”].)
The Kho Court quoted language from Sanchez v. Valencia
Holding Co., LLC (2015) 61 Cal.4th 899, 911, which was
describing general unconscionability principles. Although the
trial court and the Davis Court had no doubt about using fine

                                 4
print as a basis to find substantive unconscionability (Davis,
supra, 41 Cal.App.5th at p. 674.), I am unsure whether the Kho
Court meant to extend the indicia of substantive
unconscionability to “fine-print terms.” If it did, then the fine
print here, which is so small as to challenge the limits of
legibility, qualifies.
       Nonetheless, the ridiculously tiny print in this agreement
prompts for me a discussion of mutuality, a consideration for
substantive unconscionability. I agree with the trial court which
found: “[T]he text of the arbitration agreement here is also
‘visually impenetrable’ and ‘challenge[s] the limits of legibility.’
Not only is the agreement’s text here extremely small, the font of
the text is also muddied and broken up, making the agreement
nearly unreadable. Further exacerbating this problem, the
provision providing for arbitration is in massive single-block
paragraph that is not separated by any spacing. Indeed, the
court can barely identify in the agreement the above mentioned
arbitration provision that Defendants set forth. Even after
identifying the arbitration provision, the court can hardly follow
the rest of the enormous paragraph – the severely strained eyes
become lost and encompassed in a wall of barely legible text.”
       Substantive unconscionability focuses on the agreement’s
substance, and whether it is one-sided enough to “shock the
conscience.” (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th
1519, 1542.) In assessing substantive unconscionability, the
paramount consideration is mutuality. (Nyulassy v. Lockheed
Martin Corp. (2004) 120 Cal.App.4th 1267, 1287.) Generally,
lack of mutuality is discussed in terms of a stronger party
imposing terms on a weaker party without accepting those terms

                                 5
for itself. (Armendariz v. Foundation Health Psychcare (2000)
24 Cal.4th 83, 118.)
       I would expand that concept with this particular
agreement. This agreement with font so small as to challenge
the limits of legibility implicates a lack of mutuality. Presumably
the employer who drafted the document knows the terms and
provisions it included in the agreement. However, the employee
who is given this illegible document cannot discern the terms and
provisions. If you can’t know what you are signing because the
other party gives you only an unreadable copy, the stronger party
is imposing unknowable terms on the weaker party. Terms
unknowable to one side only are different from difficult,
confusing, or prolix terms. Their unknowability is sufficient to
“shock the conscience.”
        There are other reasons to find this agreement
substantively unconscionable. The Agreement provides that “all
terms and conditions of my employment, with the exception of
the arbitration agreement, may be changed or withdrawn at
Company’s unrestricted option at any time, with or without good
cause. No implied, oral or written agreements contrary to the
express language of this agreement are valid unless they are in
writing and signed by the President of the Company (or majority
owner or owners if Company is not a corporation).” This very
term, which gives the Company the unilateral right to change or
modify the employment agreement at any time without notice to
the employee, was found substantively unconscionable in Davis.
(Davis, supra, 41 Cal.App.5th at pp. 674–675.)
       Moreover, the provision that “the Company has the right to
defeat any attempt by me to file or join other employees in a
class, collective, or joint action lawsuit or arbitration (collectively

                                  6
‘class claims’)” appears to preclude Labor Code Private Attorneys
General Act (PAGA, Lab. Code § 2698 et seq.) representative
actions in any forum, a violation of public policy. (Davis, supra,
41 Cal.App.5th at p. 675; see also Sakkab v. Luxottica Retail N.
Am., Inc. (9th Cir. 2015) 803 F.3d 425, 429–430 [Ishkanian held
that a waiver depriving a PAGA plaintiff of any forum was
unenforceable].) The ambiguity of this sentence (is this a waiver
or a threat?) renders it unintelligible to a layperson and
consequently manifestly unfair.
       There is also the issue of confusion caused by the existence
of separate agreements. In the “Dealership Confidential
Agreement,” reference is made to the consequences of a “court of
competent jurisdiction” determining that one or more of the
provisions are invalid or unenforceable. This seems to suggest
that the Company is not bound to arbitrate any claims of
improper disclosure of the company’s propriety information, trade
secrets and confidential information, despite the language in the
formal arbitration agreement that everything is arbitrable except
for two named exceptions which do not include trade secret
claims. It is true enough that an employer certainly has the right
to protect its trade secrets as it so chooses. But the upshot of the
language it has used in the Dealership Agreement is that this
arguable additional exception to arbitration for only the employer
is confusing to a layperson and, as such, is unfair.
       Based on the foregoing, I would find a sufficient level of
substantive unconscionability in this arbitration agreement to
render it unenforceable. I part company with several approaches
taken by the majority in its analysis. First, the majority appears
to dismiss Kho as inapposite because it involved a Berman
hearing waiver and Davis as inapposite because it also involved

                                 7
misconduct by counsel. That the Kho and Davis courts
adjudicated issues in addition to unconscionability does not
negate their conclusions about unconscionability. As far as I am
concerned, their analyses are right on point.
      Second, “watering down” unconscionability analysis is not
what I have in mind. Acknowledging the obvious is my intention.
Holding a signatory to an illegible contract that is also as prolix
as this one strains the concepts of mutuality, fairness and
common sense. If an employee literally cannot read the contract,
how is that substantively fair? The drafting party must have had
a reason to use prolix language in tandem with tiny print. One
inference is that this was so employees would indeed not be able
to read and then figure out what they were signing. Another is
that the employer may have figured it did not matter whether the
agreement was legible because if the applicant wanted the job
badly enough, they would sign anything. Or perhaps the
employer was just careless in the drafting process. Whatever the
motivation, the result is a document that is not readable. I
acknowledge the law generally does not give breaks to those who
decline to read what they are signing. That is not the case here;
even if the employees wanted to read what they were signing,
they could not do so. The employer has insisted that the
employee sign an agreement with unknowable terms. That
makes the agreement one-sided and not mutual. The employer
knows what is in the agreement because the employer drafted it.
The employee has no way of knowing without great
magnification. Acknowledging the extraordinary illegibility of
this agreement does not water down our way of analyzing
unconscionability. It is time that this form agreement, which

                                8
appears to be in use by auto dealerships around the state, be
invalidated once and for all. Accordingly, I dissent.

                                          STRATTON, P. J.

                                9
APPENDIX A

      1
                       APPENDIX B

APPLICANT STATEMENT AND AGREEMENT

In the event of my employment to a position in this
Company, I will comply with all rules and regulations of
this Company. I understand that the Company reserves
the right to require me to submit to a test for the presence
of drugs in my system prior to employment and at any time
during my employment, to the extent permitted by law. I
also understand that any offer of employment may be
contingent upon the passing of a physical examination.
Further, I understand that at any time after I am hired,
the Company may require me to submit to an alcohol test,
to the extent permitted by law. I consent to the disclosure
of the results of any physical examination and tests results
to the Company. I also understand that I may be required
to take other tests such as personality and honesty tests
prior to employment and during my employment. I
understand that should I decline to sign this consent or
decline to take any of the above tests, my application for
employment may be rejected or my employment may be
terminated. I understand that bonding may be a condition
of hire. If it is, I will be so advised either before or after
hiring and a bond application will have to be completed. I
hereby authorize the Company with which I have applied
for employment to share my Application for Employment
with other affiliated companies/employers, and hereby
agree that all terms, conditions and/or agreements
contained in this Applicant’s Statement and Agreement, or
any other documents pertaining to my application for

                           1
employment, shall be enforceable by me and by such other
companies/employers (including their managers, employees
and agents), even though I have not signed a separate
Applicant’s Statement and Agreement for those other
companies/employers.

By signing below, I acknowledge that the Company may
contact my previous employers and I authorize those
employers to disclose to the Company all records and
information pertinent to my employment with them. In
addition to authorizing the release of any information
regarding my employment, I hereby fully waive any rights
or claims I have or may have against my former employers,
their agents, employees and representatives, as well as
other individuals who release information to the Company,
and release them from any and all liability, claims, or
damages that may directly or indirectly result from the use,
disclosure, or release of any such information by any person
or party, whether such information is favorable or
unfavorable to me. I authorize the persons named herein
as personal references to provide the Company with any
pertinent information they may have regarding myself. I
further understand that as a condition of employment, I
may be required to complete additional documentation
which would permit the Company and its designated
investigative Consumer Reporting Agency to conduct an
investigation of my background, which may include inquiry
into my past employment, education, and activities,
including, but not limited to, credit, criminal background
information and driving record.

                          2
    I do not wish to receive a copy of the Investigative
Consumer (background) Report at no cost, if the Company
collects, assembles, evaluates, compiles, reports, transmits,
transfers, or communicates information on my character,
general reputation, personnel characteristics, or mode of
living, for employment purposes, which are matters of
public record, and does not use the services of an
investigative consumer reporting agency.

I also acknowledge that the Company utilizes a system of
alternative dispute resolution which involves binding
arbitration to resolve all disputes which may arise out of
the employment context. Because of the mutual benefits
(such as possible reduced expense and possible increased
efficiency) which private binding arbitration can provide
both the Company and myself, I and the Company both
agree that any claim, dispute, and/or controversy that
either party may have against one another (including, but
not limited to, any claims of discrimination and
harassment, whether they be based on the California Fair
Employment and Housing Act, Title VII or the Civil Rights
Act of 1964, as amended, as well as all other applicable
state or federal laws or regulations) which would otherwise
require or allow resort to any court or other governmental
dispute resolution forum between myself and the Company
(or its owners, directors, officers, managers, employees,
agents, and parties affiliated with its employee benefit and
health plans) arising from, related to, or having any
relationship or connection whatsoever with my seeking

                           3
employment with, employment by, or other association with
the Company, whether based on tort, contract, statutory, or
equitable law, or otherwise, (with the sole exception of
claims arising under the National Labor Relations Act
which are brought before the National Labor Relations
Board, claims for medical and disability benefits under the
California Workers’ Compensation Act, and Employment
Development Department claims) shall be submitted to and
determined exclusively by binding arbitration. In order to
provide for the efficient and timely adjudication of claims,
the arbitrator is prohibited from consolidating the claims of
others into one proceeding. This means that an arbitrator
will hear only my individual claims and does not have the
authority to fashion a proceeding as a class or collective
action or to award relief to a group of employees in one
proceeding. Thus, the Company has the right to defeat any
attempt by me to file or join other employees in a class,
collective, or joint action lawsuit or arbitration (collectively
“class claims”). I further understand that I will not be
disciplined, discharged, or otherwise retaliated against for
exercising my rights under Section 7 of the National Labor
Relations Act, including but not limited to challenging the
limitation on a class, collective, or joint action. I
understand and agree that nothing in this agreement shall
be construed so as to preclude me from filing any
administrative charge with, or from participating in any
investigation of a charge conducted by any government
agency such as the Department of Fair Employment and
Housing and/or the Equal Employment Opportunity
Commission; however, after I exhaust such administrative

                            4
process/investigation, I understand and agree that I must
pursue any such claims through this binding arbitration
procedure. I acknowledge that the Company’s business and
the nature of my employment in that business affect
interstate commerce. I agree that the arbitration and this
Agreement shall be controlled by the Federal Arbitration
Act, in conformity with the procedures of the California
Arbitration Act (Cal. Code Civ. Proc. sec 1280 et seq.,
including section 1283.95 and all of the Act’s other
mandatory and permissive rights in discovery). However,
in addition to requirements imposed by law, any arbitrator
herein shall be a retired California Superior Court Judge
and shall be subject to disqualification on the same grounds
as would apply to a judge of such court. To the extent
applicable in civil actions in California courts, the following
shall apply and be observed: all rules of pleading (including
the right of demurrer), all rules of evidence, all rights to
resolution of the dispute by means of motions for summary
judgment, judgment on the pleadings, and judgment under
Code of Civil Procedure Section 631.8. Resolution of the
dispute shall be based solely upon the law governing the
claims and defenses pleaded, and the arbitrator may not
invoke any basis (including, but not limited to, notions of
“just cause”) other than such controlling law. The
arbitrator shall have the immunity of a judicial officer from
civil liability when acting in the capacity of an arbitrator,
which immunity supplements any other existing immunity.
Likewise, all communications during or in connection with
the arbitration proceedings are privileged in accordance
with Cal. Civil Code Section 47(b). As reasonably required

                           5
to allow full use and benefit of this Agreement’s
modifications to the Act’s procedures, the arbitrator shall
extend the times set by the Act for the giving of notices and
setting of hearings. Awards shall include the arbitrator’s
written reasoned opinion. If CCP § 1284.2 conflicts with
other substantive statutory provisions or controlling case
law, the allocation of costs and arbitrator fees shall be
governed by said statutory provisions or controlling case
law instead of CCP § 1284.2. Both the Company and I
agree that any arbitration proceeding must move forward
under the Federal Arbitration Act (9 U.S.C. § § 3-4) even
though the claims may also involve or relate to parties who
are not parties to the arbitration agreement and/or claims
that are not subject to arbitration, thus the court may not
refuse to enforce this arbitration agreement and may not
stay the arbitration proceeding despite the provisions of
California Code of Civil Procedure § 1281.2(c). I
UNDERSTAND BY AGREEING TO THIS BINDING
ARBITRATION PROVISION, BOTH I AND THE
COMPANY GIVE UP OUR RIGHTS TO TRIAL BY JURY.

I hereby state that all the information that I provided on
this application or any other documents filled out in
connection with my employment, and in any interview is
true and correct. I have withheld nothing that would, if
disclosed, affect this application unfavorably. I understand
that if I am employed and any such information is later
found to be false or incomplete in any respect, I may be
discharged from employment.

                           6
I agree as follows: My employment and compensation are
terminable at will, are for no definite period, and my
employment and compensation may be terminated by the
Company (employer) at any time and for any reason
whatsoever, with or without good cause at the option of
either the Company or myself. Consequently, all terms and
conditions of my employment, with the exception of the
arbitration agreement, may be changed or withdrawn at
Company’s unrestricted option at any time, with or without
good cause. No implied, oral or written agreements
contrary to the express language of this agreement are
valid unless they are in writing and signed by the President
of the Company (or majority owner or owners if Company is
not a corporation). No supervisor or representative of the
Company, other than the President of the Company (or
major owner or owners if Company is not a corporation),
has any authority to make any agreements contrary to the
foregoing. This agreement is the entire agreement between
the Company and the employee regarding the rights of the
Company or employee to terminate employment with or
without good cause and this agreement takes the place of
all prior and contemporaneous agreements,
representations, and understandings of the employee and
the Company.

Should any term or provision, or portion thereof, be
declared void or unenforceable, it shall be severed and the
remainder of this agreement shall be enforced.

                          7
If you have any questions regarding this statement, please
ask a Company representative before signing. I hereby
acknowledge that I have read the above statements and
understand the same.

DO NOT SIGN UNTIL YOU HAVE READ THE ABOVE
STATEMENT & AGREEMENT

  Applicant Signature                          Date

                          8