Santana v. Studebaker Health Care Center

Filed 4/7/26; Certified for Publication 4/22/26 (order attached)




IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                    SECOND APPELLATE DISTRICT

                               DIVISION SEVEN


 J. ASENCION SANTANA,                          B343640

         Plaintiff and                         (Los Angeles County
         Respondent,                           Super. Ct. No. 24STCV12865)

         v.

 STUDEBAKER HEALTH
 CARE CENTER, LLC,

         Defendant and
         Appellant.


      APPEAL from an order of the Superior Court of
Los Angeles County, Laura A. Seigle, Judge. Reversed with
directions.
      Eisenberg & Associates, Michael B. Eisenberg,
Bryan W. Edgar; Joseph S. Socher for Defendant and Appellant.
      The Sentinel Firm, Seung Yang, Tiffany Hyun, Jeffrey
Jackson, Christine Noh; Work Lawyers, Justin Lo and Jarrod
Nakano for Plaintiff and Respondent.
                       INTRODUCTION

       When Studebaker Health Care Center, Inc. hired
J. Asencion Santana, Studebaker required him to sign a series of
documents. In three of the documents Studebaker and Santana
agreed to arbitrate most disputes arising out of their employment
relationship, except for non-individual claims brought as a
private attorney general under the Labor Code Private Attorney
General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.). After his
employment ended Santana filed a wage-and-hour class action
against Studebaker, which included a cause of action under
PAGA. Studebaker filed a motion to compel arbitration, and the
trial court denied it.
       Studebaker appeals from the order denying its motion to
compel arbitration, arguing the trial court erred in ruling that,
because of various “conflicts” among the three arbitration-related
documents, there was no valid agreement to arbitrate.
Studebaker also argues the trial court erred in ruling in the
alternative the agreement to arbitrate was unconscionable and
unenforceable.
       We agree with Studebaker on both counts. Though the
agreement to arbitrate contains a few ambiguities, those
ambiguities do not undermine the parties’ clear agreement to
arbitrate employment-related disputes. And though the
agreement to arbitrate reflects some procedural
unconscionability—as contracts of adhesion generally do—the
agreement does not contain any substantively unconscionable
terms and is not unenforceable. Therefore, we reverse.




                                2
      FACTUAL AND PROCEDURAL BACKGROUND


      A.     Santana Applies To Work for Studebaker and Signs
             Several Arbitration-related Documents
       Santana began working at a skilled nursing facility in
December 2020. Studebaker purchased the facility in
January 2023 and became Santana’s employer. As part of its
onboarding process,1 Studebaker asked Santana to sign three
arbitration-related agreements (collectively, the agreement to
arbitrate).2 He did.
       The first document, titled “California Mutual Dispute
Resolution Agreement” (California ADR agreement), included a
mutual agreement to resolve disputes through binding
arbitration. The California ADR agreement stated, in relevant
part: “This Agreement applies to claims Employee may bring
against the Company for wrongful termination, discrimination,
harassment, retaliation, breach of contract, and wage and hour
violations, whether directly or indirectly, and torts such as
invasion of privacy, assault and battery, or defamation. This
Agreement also applies to claims that the Company might bring

1      “Onboarding” has emerged from the murky reservoir of
corporate jargon and has “mainstreamed” to more general usage.
It is “defined as ‘the act or process of orienting and training a new
employee.’” (Garcia v. Expert Staffing West (2021)
73 Cal.App.5th 408, 413, fn. 4.)

2     Because Santana signed the three documents at the same
time and they relate to the same matter, we construe them
together. (See Civ. Code, § 1642; Silva v. Cross Country
Healthcare, Inc. (2025) 111 Cal.App.5th 1311, 1322-1323; Alberto
v. Cambrian Homecare (2023) 91 Cal.App.5th 482, 490-491.)




                                 3
against Employee such as, for example, theft of money or trade
secrets, breach of a confidentiality Agreement, or breach of a
contract.”
       The second document, titled “Alternative Dispute
Resolution Policy” (ADR policy), also included a mutual
agreement to submit all employment disputes to binding
arbitration. The ADR policy covered “any dispute arising out of
or related to your employment, the terms and conditions of your
employment and/or the termination of your employment . . . .”
Such claims included “[a]lleged violations of federal, state and/or
local constitutions, statutes or regulations”; “[c]laims based on
any purported breach of contract (including breach of the
covenant of good faith and fair dealing, claims of wrongful
termination or constructive termination)”; “[c]laims alleging
failure to compensate for all hours worked, failure to pay
overtime, failure to pay minimum wage, failure to reimburse
expenses, failure to pay wages upon termination, failure to
provide accurate, itemized wage statements, failure to provide
meal and/or rest breaks, entitlement to waiting time penalties
and/or other claims involving employee wages, including, but not
limited to, claims brought under the Fair Labor Standards Act
and any other statutory scheme related to wages or working
hours”; and “[a]ny claim the Company may enjoy against
employees, regardless of the nature, arising from the employment
relationship.”
       The third document, titled “Agreement to Be Bound by
Alternative Dispute Resolution Policy” (ADR agreement), also
included a mutual agreement to resolve disputes solely through
binding arbitration. The ADR agreement stated: “This ADR
Policy is understood to apply to all disputes relating to my




                                4
employment, the terms and conditions of my employment,
including but not limited to my compensation, wages, claims
alleging failure to compensate for all hours worked, failure to pay
overtime, failure to pay minimum wage, failure to reimburse
expenses, failure to pay wages upon termination, failure to
provide accurate, itemized wage statements, failure to provide
meal and/or rest breaks, entitlement to waiting time penalties
and/or other claims involving employee wages, benefits,
discipline, performance evaluations, promotions, transfers, and
the termination of my employment, as defined in the ADR Policy
materials.” Studebaker agreed “to be bound by the company’s
ADR program and have any and all claims arising out of the
employment relationship it may enjoy against [Santana]
resolved” through binding arbitration. (Capitalization omitted.)
The ADR agreement also stated “final and binding arbitration, is
the exclusive means for resolving covered disputes; no other
action may be brought in court or in any other forum.”
(Capitalization omitted.) Each of the three documents also
included a waiver of the right to participate in class or collective
actions (except representative actions under PAGA).
       Santana also signed a confidentiality agreement. This
document prohibited him from disclosing confidential information
or trade secrets he acquired during his employment and from
soliciting Studebaker’s customers and employees for three years
following his employment termination.

      B.    Santana Sues Studebaker
      Santana worked for Studebaker for approximately one
year. After leaving his employment Santana filed a wage-and-
hour class action suit against Studebaker in May 2024. He




                                 5
alleged causes of action based on violations of the Labor Code:
failure to pay minimum wage; failure to pay overtime
compensation; failure to provide meal periods; failure to provide
rest periods; failure to indemnify for necessary expenditures;
failure to provide accurate itemized wage statements; failure to
pay wages at the time of discharge from employment; and a cause
of action under PAGA. Santana also alleged a cause of action
under Business and Professions Code section 17200 et seq. for
unfair business practices.

      C.     Studebaker Files a Motion To Compel Arbitration,
             and the Trial Court Denies It
      Studebaker filed a motion to compel arbitration of
Santana’s individual claims, including his individual PAGA
claim, and to enforce the class action waiver. Studebaker argued
that, because the agreement to arbitrate included enforceable
class action waivers, the court should dismiss most of Santana’s
class-based wage-and-hour claims. Regarding the causes of
action based on Labor Code violations Santana suffered
individually, Studebaker argued those causes of action fell within
the scope of the agreement to arbitrate. And regarding Santana’s
PAGA claim, Studebaker argued that, because the Federal
Arbitration Act (FAA) governed the agreement to arbitrate, the
court should compel arbitration of Santana’s individual PAGA
claim and stay his non-individual PAGA claim pending the
arbitration.
      In opposition to the motion to compel arbitration, Santana
argued that, because the California ADR agreement, the ADR
policy, and the ADR agreement contained conflicting and
ambiguous terms, there was no enforceable arbitration




                                6
agreement. Santana also argued that, because the agreement to
arbitrate included an unenforceable waiver of the right to bring a
PAGA action, the agreement to arbitrate was unconscionable.
Finally, Santana argued the agreement to arbitrate, when
construed with the confidentiality agreement, was
unconscionable because it was unfairly one-sided and lacked
mutuality.
      The trial court denied the motion to compel arbitration on
two grounds. First, the court ruled there was no enforceable
agreement to arbitrate. Citing what it described as conflicts
among the terms of the California ADR agreement, the ADR
policy, the ADR agreement, the employee handbook, the
confidentiality agreement, the process to select an arbitrator, and
the right to bring a PAGA action, the court ruled “[t]hese many
inconsistencies make determining the terms of [Santana’s]
employment impossible and show a lack of mutual assent to
material contract terms.”
      Second, the trial court ruled that, even if there was a valid
agreement to arbitrate, the agreement was unconscionable. The
court ruled the agreement to arbitrate had a high degree of
procedural unconscionability due to the unequal bargaining
positions of the parties and the agreement’s conflicting terms.
The court also ruled that a provision in the ADR agreement
waiving the right to bring a PAGA cause of action was
substantively unconscionable and that, because (in the trial
court’s view) the FAA did not apply, the court could not salvage
the agreement to arbitrate by splitting Santana’s PAGA cause of
action into arbitrable individual and non-arbitrable
non-individual claims. The court further ruled the confidentiality
agreement contained two substantively unconscionable




                                7
provisions—one reducing the quantum of proof required for
Studebaker to obtain an injunction and the other allowing
Studebaker to litigate its claims against Santana in court.
Finally, the court ruled that, due to the myriad conflicts in the
agreement to arbitrate and the confidentiality agreement, the
court could not sever the unconscionable provisions to save the
agreement to arbitrate. Studebaker timely appealed.

                          DISCUSSION

      “Federal and California law treat valid arbitration
agreements like any other contract and favor their enforcement.”
(Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478,
492; see OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125; see also
9 U.S.C. § 2; Code Civ. Proc., § 1280 et seq.) A written agreement
to submit a controversy to arbitration is valid, enforceable, and
irrevocable, “save upon such grounds as exist for the revocation of
any contract.” (Code Civ. Proc., § 1281.) This appeal involves
two such grounds: lack of mutual assent and unconscionability.

      A.    The Parties Agreed To Arbitrate Employment-related
            Disputes

             1.    Applicable Law and Standard of Review
      Because arbitration is a contractual right, the threshold
question in every motion or petition to compel arbitration is
whether an agreement to arbitrate exists. (See Code Civ. Proc.,
§ 1281.2 [court must order arbitration of a controversy “if it
determines that an agreement to arbitrate the controversy
exists”]; Coinbase, Inc. v. Suski (2024) 602 U.S. 143, 145




                                 8
[“Arbitration is a matter of contract and consent, and . . . disputes
are subject to arbitration if, and only if, the parties actually
agreed to arbitrate those disputes.”]; Fuentes v. Empire Nissan,
Inc. (2026) 19 Cal.5th 93, 109 (Fuentes) [“Arbitration ‘“‘“is strictly
a matter of consent”’”’—absent an agreement to arbitrate, the
default rule is that parties may litigate breach of contract claims
in court.”]; Mar v. Perkins (2024) 102 Cal.App.5th 201, 211 [“the
threshold question is whether there is an agreement to
arbitrate”]; Mondragon v. Sunrun Inc. (2024) 101 Cal.App.5th
592, 601 [“a ‘threshold question[ ] presented by every motion or
petition to compel arbitration’ is ‘whether the parties’ dispute
falls within the scope of that agreement’”].) “In California,
‘[g]eneral principles of contract law determine whether the
parties have entered a binding agreement to arbitrate.’”
(Pinnacle Museum Tower Assn. v. Pinnacle Market Development
(US), LLC (2012) 55 Cal.4th 223, 236; accord, Enmark v. KF
Community Care, LLC (2024) 105 Cal.App.5th 463, 471; see
Mondragon, at p. 602 [“‘“An arbitration agreement is subject to
the same rules of construction as any other contract.”’”].)
       Under California law the basic requirements for an
enforceable contract are (1) parties capable of contracting, (2) the
consent of those parties, (3) a lawful object, and (4) adequate
consideration. (Civ. Code, § 1550; see J.B.B. Investment Partners
Ltd. v. Fair (2019) 37 Cal.App.5th 1, 9.) The consent of the
parties to a contract must be free, mutual, and communicated by
each to the other. (Civ. Code, §§ 1565, 1581.) The absence of
mutual consent, i.e., the failure to reach a meeting of the minds
on all material points, prevents the formation of a contract,
including an agreement to arbitrate. (Cheema v. L.S. Trucking,
Inc. (2019) 39 Cal.App.5th 1142, 1149; see Banner Entertainment,




                                  9
Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 358-359
[“California law is clear that there is no contract until there has
been a meeting of the minds on all material points”].) “‘Where a
contract is so uncertain and indefinite that the intention of the
parties in material particulars cannot be ascertained, the
contract is void and unenforceable. [Citations.] “Although the
terms of a contract need not be stated in the minutest detail, it
. . . must evidence a meeting of the minds upon the essential
features of the agreement.”’” (Cheema, at p. 1149.) Whether a
term is material or essential “‘depends on its relative importance
to the parties and whether its absence would make enforcing the
remainder of the contract unfair to either party.’” (Eagle Fire &
Water Restoration, Inc. v. City of Dinuba (2024) 102 Cal.App.5th
448, 468; see Copeland v. Baskin Robbins U.S.A. (2002)
96 Cal.App.4th 1251, 1256, fn. 3; see also Westlands Water Dist.
v. All Persons Interested (2023) 95 Cal.App.5th 98, 127
[“‘material’” and “‘essential’” are interchangeable].)
        In determining whether there is mutual consent, the court
will often consider extrinsic evidence and resolve a question of
fact. (Eagle Fire & Water Restoration, Inc. v. City of Dinuba,
supra, 102 Cal.App.5th at p. 468; Martinez v. BaronHR, Inc.
(2020) 51 Cal.App.5th 962, 966.) But where, as here, the facts
are not in dispute, whether there is mutual consent is a question
of law, and we review the court’s ruling de novo. (See Franco v.
Greystone Ridge Condominium (2019) 39 Cal.App.5th 221, 227
[“‘“[i]nterpreting a written document to determine whether it is
an enforceable arbitration agreement is a question of law subject
to de novo review when the parties do not offer conflicting
extrinsic evidence regarding the document’s meaning”’”]; Avery v.




                                10
Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50,
60 [same].)

            2.      The Trial Court Erred in Ruling There Was No
                    Valid Agreement To Arbitrate
       The trial court ruled there was no agreement between the
parties to arbitrate their employment disputes. The court ruled
that, “because of conflicting terms among the various contracts
and documents [Santana] signed when he onboarded, there is
[an] absence of mutual assent.” The court erred in failing to
apply well-settled principles of contract interpretation.
       “‘The basic goal of contract interpretation is to give effect to
the parties’ mutual intent at the time of contracting.’” (Pacho
Limited Partnership v. Eureka Energy Co. (2025) 115 Cal.App.5th
598, 611; see Mondragon v. Sunrun Inc., supra, 101 Cal.App.5th
at p. 615.) Generally, courts must construe an apparent
agreement between the parties to make it “lawful, operative,
definite, reasonable, and capable of being carried into effect, if it
can be done without violating the intention of the parties.” (Civ.
Code, § 1643; see Ramirez v. Charter Communications, Inc.,
supra, 16 Cal.5th at p. 507 [“Where a contract is susceptible to
two interpretations, one which renders it valid and the other
which renders it void, a court should select the interpretation
that makes the contract valid.”].) Though conflicting or
ambiguous terms may render an agreement so uncertain it is
unenforceable, that is not usually the case. “[F]or purposes of
contract law, certainty is not the same as unambiguous. The test
for whether a term is ambiguous is whether it is reasonably
susceptible to more than one interpretation. [Citation.] An
ambiguity in an agreement is resolved through interpretation




                                  11
and the resulting meaning enforced. [Citation.] In short,
ambiguous agreements are enforceable and uncertain
agreements are not.” (Eagle Fire & Water Restoration, Inc. v.
City of Dinuba, supra, 102 Cal.App.5th at p. 469.)
       The trial court ruled the agreement to arbitrate contained
conflicting terms in three areas: whether the FAA applied, how to
select an arbitrator, and whether the parties agreed to arbitrate
PAGA claims. None of these purported conflicts, however, made
the agreement to arbitrate so uncertain it negated the parties’
agreement to arbitrate.
       First, and contrary to the court’s ruling, the agreement to
arbitrate plainly and unambiguously provides the FAA applies.
The California ADR agreement states: “Any arbitration
proceeding under this Agreement shall proceed under and be
governed by the Federal Arbitration Act . . . because Employee
and the Company[ ] are engaged in interstate commerce. The
procedures of the California Arbitration Act . . . shall also apply,
to the extent they are not contrary to the FAA.” The California
ADR also states: “Following the issuance of the arbitrator’s
decision, any party may petition a court to confirm, enforce,
correct, or vacate the arbitrator’s opinion and award under the
Federal Arbitration Act, 9 U.S.C. §§ 1-16, if applicable, and/or
applicable state law.” The ADR agreement similarly states: “The
parties acknowledge that this Agreement evidences a transaction
involving interstate commerce. Notwithstanding the provision in
the preceding paragraph with respect to applicable substantive
law, any arbitration conducted pursuant to the terms of this
Agreement shall be governed by the Federal Arbitration Act . . . .”
And though the ADR policy does not state the FAA applies, it
(like the California ADR agreement) does state: “Following the




                                12
issuance of the arbitrator’s decision, any party may petition a
court to confirm, enforce, correct, or vacate the arbitrator’s
opinion and award under the Federal Arbitration Act, 9 U.S.C.
§§ 1-16, if applicable, and/or applicable state law.” These
contractual provisions—while they are not identical—do not
conflict. Santana does not even argue they do.
       Second, though the California ADR agreement and the
ADR policy include different provisions regarding the selection of
an ADR provider, those differences do not render the agreement
to arbitrate so vague or uncertain it is unenforceable. Both the
California ADR agreement and the ADR policy provide the
parties should attempt to agree on an arbitrator.3 They differ
only on what happens if the parties cannot agree. In that event,
the California ADR agreement states the parties “will select an
alternative dispute resolution provider,” while the ADR policy
states “a list of arbitrators will be obtained from the American
Arbitration Association’s (‘AAA’) Employment Panel.” Though
these provisions are different, they both assume the parties have
agreed to arbitrate. Parties to a binding and enforceable
arbitration agreement routinely have disputes over how to select
an arbitrator, and courts routinely resolve those disputes.
       The California ADR agreement and the ADR policy also
provide different procedures for selecting an arbitrator. The

3     The California ADR agreement states: “At the beginning of
the arbitration process under this Agreement, Employee and the
Company will need to select an arbitrator by mutual agreement.
Such an arbitrator shall be a retired California Superior Court
Judge, or another qualified and impartial person that Employee
and the Company decide upon.” The ADR policy provides: “The
arbitrator will be mutually selected by the Company and the
Employee.”




                                13
California ADR agreement states the parties will “request from
[the ADR] provider a list of an odd number of potential
arbitrators. From that list Employee and the Company will
alternatively strike arbitrators, with the Company going first,
until one arbitrator is left. That arbitrator shall be the arbitrator
who will hear the case.” The ADR policy states: “The arbitrator
will be selected by the parties according to the method of
selection specified by the AAA in its Employment Arbitration
Rules and Mediation Procedures.” Assuming these two
procedures conflict—a matter not resolved by the evidence in the
record—the contractual provisions create a potential ambiguity
regarding the arbitrator selection process, not an uncertainty
about whether the parties agreed to arbitrate their employment-
related disputes. Indeed, because the provisions regarding the
selection of an arbitrator presuppose the parties have agreed to
arbitration, the provisions reinforce (rather than undermine) the
parties’ mutual intent to arbitrate (rather than litigate) their
disputes.
       In any event, where (as here) the parties’ intent to arbitrate
their disputes is clear, “[t]he presence of options regarding the
method for selecting an arbitrator or the location of the
arbitration hearing does not negate that clear intention.”
(HM DG, Inc. v. Amini (2013) 219 Cal.App.4th 1100, 1109.) The
court in HM DG rejected the argument that, because the
arbitration agreement included options for selecting an arbitrator
and location, there was “‘no meeting of the minds’” or mutual
consent to arbitrate. (Id. at pp. 1108-1109.) The court held that,
because the arbitration clause evidenced the parties’ intent to
submit their disputes to binding arbitration, the lack of a
specified forum or set of rules did not invalidate the agreement to




                                 14
arbitrate. The parties could choose to agree on a forum, the
applicable rules, and an arbitrator, or have the court decide those
issues for them. (Id. at pp. 1110-1111.) And if the parties could
not agree, Code of Civil Procedure section 1281.6 “provides a
solution to ensure a party’s contractual right to arbitrate is
enforced” by allowing the court to appoint the arbitrator.
(HM DG, Inc., at p. 1108.) The same is true here. Any ambiguity
about the arbitrator selection process—which will be relevant
only if the parties cannot agree on an arbitrator or a selection
process, and which the court can resolve in that event—does not
undermine the parties’ unmistakable intent to arbitrate
employment-related disputes.
       Third, and again contrary to the court’s ruling, the
agreement to arbitrate reflects the parties’ intent to arbitrate
Santana’s individual PAGA and other Labor Code claims. State
law “prohibit[s] wholesale waiver of PAGA claims.” (Adolph v.
Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1114; see
Iskanian v. CLS Transportation Los Angeles, LLC (2014)
59 Cal.4th 348, 383 [“an employee’s right to bring a PAGA action
is unwaivable”], overruled in part in Viking River Cruises, Inc. v.
Moriana (2022) 596 U.S. 639 (Viking River).) In Iskanian the
Supreme Court explained that allowing the plaintiff to waive his
or her right to bring a PAGA action “serves to disable one of the
primary mechanisms for enforcing the Labor Code. Because such
an agreement has as its ‘object, . . . indirectly, to exempt [the
employer] from responsibility for [its] own . . . violation of law,’ it
is against public policy and may not be enforced.” (Iskanian, at
p. 383; accord, Villalobos v. Maersk, Inc. (2025) 114 Cal.App.5th
1170, 1195-1196.) While a state law rule “may not be enforced if
it is preempted by the FAA,” the Supreme Court in Iskanian held




                                  15
the rule against PAGA waivers did not frustrate the FAA’s
objectives because “a PAGA action is a dispute between an
employer and the state Agency.” (Iskanian, at p. 384.)
       In Viking River, supra, 596 U.S. 639, decided before
Santana began working for Studebaker, the United States
Supreme Court held the FAA preempted Iskanian in part. In
Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th 1104 the
California Supreme Court explained the effect of Viking River.
Viking River “left undisturbed” Iskanian’s holding “that a
predispute categorical waiver of the right to bring a PAGA action
is unenforceable.” (Adolph, at p. 1117; accord, Villalobos v.
Maersk, Inc., supra, 114 Cal.App.5th at pp. 1195-1196.) “In
addition, Iskanian held unenforceable an agreement that, while
providing for arbitration of alleged Labor Code violations
sustained by the plaintiff employee (what Viking River called
individual claims), compels waiver of claims on behalf of other
employees (i.e., non-individual claims). [Citations.] . . . Viking
River also left this rule intact.” (Adolph, at pp. 1117-1118;
accord, Villalobos, at p. 1196.) However, the California Supreme
Court explained, Viking River “held that ‘the FAA preempts the
rule of Iskanian insofar as it precludes division of PAGA actions
into individual and non-individual claims through an agreement
to arbitrate.’” (Adolph, at p. 1118; accord, Villalobos, at p. 1196.)
“Thus, Viking River requires enforcement of agreements to
arbitrate a PAGA plaintiff’s individual claims if the agreement is
covered by the FAA.” (Adolph, at p. 1119; accord, Villalobos, at
p. 1196.)
       Because (as discussed) the FAA applies to the agreement to
arbitrate, class and collective action waivers in which Santana
agreed to arbitrate his individual Labor Code violation claims,




                                 16
including his individual PAGA claim, are enforceable under
Adolph and Viking River, so long as they do not include a waiver
of the right to bring non-individual PAGA claims. Each of the
three documents comprising the agreement to arbitrate includes
a valid PAGA waiver. The California ADR agreement includes a
class and collective action waiver requiring the parties to bring
their claims in their individual capacities4 and carves out what
Viking River called non-individual PAGA claims: “If under
applicable law a claim, for example, without limitation, a
representative claim under [PAGA] is found to be unwaivable
and such action is pursued in court, Employee [and] the Company
agree[ ] that any such claim, including a PAGA claim, will be
severed and stayed pending resolution of claims that are
arbitrable, including without limitation, Employee’s individual
claims.” The ADR policy states: “You understand and agree this
ADR Program prohibits you from joining or participating in a
class action or representative action, acting as a representative of
others, excluding private attorney general claims, or otherwise
consolidating a covered claim with the claim[s] of others.” The
ADR agreement includes a nearly identical provision: “I agree
this ADR Program prohibits me from joining or participating in a
class action or representative action, acting as a representative of
others, excluding private attorney general claims, or otherwise
consolidating a covered claim with the claims of others.”


4     It states, for example: “All claims brought under this
Agreement shall be brought in the individual capacity of
Employee or Company. Under no circumstances shall this
Agreement be construed to allow or permit claims or
controversies to proceed as a class or collective action or other
similar basis.”




                                 17
       As the trial court found, however, there is one provision in
the ADR agreement that conflicts with these provisions:
“I UNDERSTAND I AM PROHIBITED FROM JOINING OR
PARTICIPATING IN A CLASS ACTION OR
REPRESENTATIVE ACTION, ACTING AS A PRIVATE
ATTORNEY GENERAL OR REPRESENTATIVE OF OTHERS,
OR OTHERWISE CONSOLIDATING A COVERED CLAIM
WITH THE CLAIM OF OTHERS.” This wholesale waiver of the
right to bring a PAGA action is inconsistent with the language of
the three class and collective action waivers that excluded non-
individual PAGA claims and with the provisions in the California
ADR agreement, the ADR policy, and the ADR agreement stating
the parties did not intend “to require arbitration of any matter or
claim which the courts of this jurisdiction have expressly held are
not subject to mandatory arbitration.” But instead of
invalidating the agreement to arbitrate, the trial court should
have resolved any ambiguity using principles of contract
interpretation. (See Civ. Code, § 1652 [“Repugnancy in a contract
must be reconciled, if possible, by such an interpretation as will
give some effect to the repugnant clauses, subordinate to the
general intent and purpose of the whole contract.”]; Gilkyson v.
Disney Enterprises, Inc. (2021) 66 Cal.App.5th 900, 922 [same].)
In any event, the sole conflicting provision in the ADR agreement
did not, standing alone, undermine the parties’ intent to arbitrate
employment-related disputes. (And, as we will explain, it is
severable.)




                                18
      B.    The Arbitration Agreement Is Not Unconscionable

             1.    Applicable Law and Standard of Review
       “The general principles of unconscionability are well
established. A contract is unconscionable if one of the parties
lacked a meaningful choice in deciding whether to agree and the
contract contains terms that are unreasonably favorable to the
other party.” (OTO, L.L.C. v. Kho, supra, 8 Cal.5th at p. 125; see
Fuentes, supra, 19 Cal.5th at p. 102-103.) Unconscionability has
a procedural and a substantive element. (Fuentes, at p. 103;
Pinnacle Museum Tower Assn. v. Pinnacle Market Development
(US), LLC, supra, 55 Cal.4th at p. 246.) “The procedural element
concerns ‘the circumstances of contract negotiation and
formation,’ particularly ‘oppression or surprise due to unequal
bargaining power.’ [Citation.] The substantive element, by
contrast, concerns ‘the fairness of an agreement’s actual terms,’
i.e., whether those terms ‘are overly harsh or one-sided.’”
(Fuentes, at p. 103; see Ramirez v. Charter Communications Inc.,
supra, 16 Cal.5th at p. 492.)
       “‘Both procedural and substantive elements must be
present to conclude a term is unconscionable, but these required
elements need not be present to the same degree.’ [Citation.]
Courts ‘apply a sliding scale analysis under which “the more
substantively oppressive [a] term, the less evidence of procedural
unconscionability is required to come to the conclusion that the
term is unenforceable, and vice versa.”’” (Fuentes, supra,
19 Cal.5th at p. 103; accord, Ramirez v. Charter Communications,
Inc., supra, 16 Cal.5th at p. 493.) Where, as here, the parties do
not dispute the trial court’s factual findings, our review is
de novo. (See Fuentes, at p. 102; Ramirez, at p. 493.)




                               19
            2.     The Agreement To Arbitrate Had a Low Level of
                   Procedural Unconscionability
       “A procedural unconscionability analysis ‘begins with an
inquiry into whether the contract is one of adhesion.’ [Citation.]
An adhesive contract is standardized, generally on a preprinted
form, and offered by the party with superior bargaining power ‘on
a take-it-or-leave-it basis.’” (OTO, L.L.C. v. Kho, supra, 8 Cal.5th
at p. 126; see Armendariz v. Foundation Health Psychcare
Services, Inc. (2000) 24 Cal.4th 83, 114 [contract was adhesive
where the agreement was “imposed on employees as a condition
of employment and there was no opportunity to negotiate”];
Najarro v. Superior Court (2021) 70 Cal.App.5th 871, 884
[same].) “Some procedural unconscionability is present whenever
an agreement ‘is a contract of adhesion, i.e., 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.”’ [Citation.]
Although ordinary contracts of adhesion ‘“‘are indispensable facts
of modern life that are generally enforced,’”’ they pose a ‘“‘clear
danger of oppression and overreaching.’”’ [Citation.] Because
contracts of adhesion are ‘“‘not the result of freedom or equality of
bargaining,’”’ we examine them carefully.” (Fuentes, supra,
19 Cal.5th at p. 104; see Ramirez v. Charter Communications,
Inc., supra, 16 Cal.5th at pp. 492, 494; Swain v. LaserAway
Medical Group, Inc. (2020) 57 Cal.App.5th 59, 67-68.)
       Because Studebaker presented the agreement to arbitrate
to Santana on a “take it or leave it basis,” the agreement to
arbitrate was an adhesive contract. Studebaker does not dispute
the agreement to arbitrate exhibits a low level of procedural




                                 20
unconscionability typically found in employment-related
agreements, but it correctly argues the trial court erred in finding
a high level of procedural unconscionability. The trial court,
citing Olvera v. El Pollo Loco, Inc. (2009) 173 Cal.App.4th 447,
ruled the conflicting terms in the agreement to arbitrate created
a high level of procedural unconscionability. As explained,
however, the purportedly conflicting terms identified by the trial
court either did not conflict or, at most, created an ambiguity
regarding some aspect of the agreement to arbitrate.
       Moreover, unlike the documents in Olvera v. El Pollo Loco,
Inc., supra, 173 Cal.App.4th 447, the agreement to arbitrate here
was not deceptive or misleading. In Olvera the employer
distributed to its employees a summary, in English and Spanish,
of employee benefits. Describing the new dispute resolution
process, the summary stated: “‘Any employee with a work-
related problem should contact the General Manager, Area
Leader, Human Resources Manager or other management person
to resolve the problem. If all attempts to resolve the problem are
unsuccessful, the new policy requires that the employee and the
company use a mediator to assist them in reaching a resolution.
See your General Manager for additional details.’” (Id. at p. 450.)
The summary attached a series of pages described as a policies
and procedures manual, in English only, which included a
dispute resolution policy requiring binding arbitration of all
employment-related disputes. (Ibid.) The accompanying
acknowledgment, in English and Spanish, stated the employee
received, understood, and agreed to the new dispute resolution
policy. (Id. at p. 451.)
       After an employee filed a wage-and-hour class action, the
trial court denied the employer’s motion to compel arbitration,




                                21
ruling the arbitration agreement was unconscionable. Affirming
the trial court’s order, the court in Olvera held the arbitration
agreement evidenced a high degree of procedural
unconscionability. Emphasizing the discrepancy between the
employer’s bilingual summary of the new dispute resolution
policy (that required only mediation) and the actual policy
presented only in English (that required binding arbitration), the
court concluded the employer’s materials were misleading. The
court held that, because the employer’s deception likely
prevented the employees from making an informed decision
whether to agree to the dispute resolution policy, the degree of
procedural unconscionability was high. (Olvera v. El Pollo Loco,
Inc., supra, 173 Cal.App.4th at pp. 455-456.) There are no such
deceptive or misleading factors in this case. The trial court erred
in relying on Olvera to find a high level of procedural
unconscionability.

            3.       The Agreement To Arbitrate Was Not
                     Substantively Unconscionable
        “The substantive unconscionability analysis ‘examines the
fairness of a contract’s terms. This analysis “ensures that
contracts, particularly contracts of adhesion, do not impose terms
that have been variously described as ‘“‘overly harsh’”’ [citation],
“‘unduly oppressive’” [citation], “‘so one-sided as to “shock the
conscience”’” [citation], or ‘unfairly one-sided’ [citation]. All of
these formulations point to the central idea that the
unconscionability doctrine is concerned not with ‘a simple
old-fashioned bad bargain’ [citation], but with terms that are
‘unreasonably favorable to the more powerful party.’”’ [Citation.]
. . . ‘Ultimately, the question is whether [the nondrafting




                                 22
employee], through oppression and surprise, was coerced or
misled into making an unfair bargain.’” (Fuentes, supra,
19 Cal.5th at p. 106.)
       As stated, the trial court ruled the agreement to arbitrate
was substantively unconscionable for two reasons. It was
incorrect on both points. First, the trial court ruled the waiver of
the right to bring PAGA claims was substantively
unconscionable. As explained, however, each of the three
documents in the agreement to arbitrate contained a valid and
enforceable PAGA waiver and reflected the parties’ intent not “to
require arbitration of any matter or claim which the courts of this
jurisdiction have expressly held are not subject to mandatory
arbitration.” Because the agreement to arbitrate included a
severance provision, the court should have severed the sole
unenforceable (and inconsistent) wholesale PAGA waiver
provision, rather than concluding the entire agreement to
arbitrate was unenforceable.5 (See Viking River, supra, 596 U.S.
at p. 662 [applying an arbitration agreement’s severance
provision to sever an invalid portion of a PAGA waiver]; Gregg v.
Uber Technologies, Inc. (2023) 89 Cal.App.5th 786, 797 [same].)
       Second, the trial court erred in ruling the confidentiality
agreement contained provisions that, when construed with the
agreement to arbitrate, rendered the agreement to arbitrate
unfairly one-sided. (See Fuentes, supra, 19 Cal.5th at p. 107;

5     The ADR policy states: “In the event that any provision of
this ADR Policy is determined by a court of competent
jurisdiction to be illegal, invalid, or unenforceable to any extent,
such term or provision shall be enforced to the extent permissible
under the law and all remaining terms and provisions of this
ADR Policy shall continue in full force and effect.” The California
ADR agreement includes a similar provision.




                                23
Armendariz v. Foundation Health Psychcare Services, Inc., supra,
24 Cal.4th at p. 117.) “Our goal in interpreting the
confidentiality agreements is to give effect to the parties’ “‘mutual
intention’” at the time of their signing. [Citation.] To discern the
parties’ intention, we look first to the agreements’ text.”
(Fuentes, at p. 108.) As discussed, we construe together multiple
agreements signed at the same time regarding the same subject.
(Civ. Code, § 1642; see Silva v. Cross Country Healthcare, Inc.
(2025) 111 Cal.App.5th 1311, 1322-1323 [interpreting an
arbitration agreement together with an employment agreement
with a confidentiality clause]; Alberto v. Cambrian Homecare
(2023) 91 Cal.App.5th 482, 490-491 [interpreting an arbitration
agreement together with a confidentiality agreement].) The
confidentiality agreement states: “Employee acknowledges and
agrees that due to the unique nature of this Agreement, there can
be no adequate remedy at law for any breach of obligations
hereunder, that any such breach may allow a party or third
parties to unfairly compete with Company resulting in
irreparable harm to Company. Therefore, upon any such breach
or any threat thereof, Company will be entitled to appropriate
equitable relief, in addition to all other forms of relief available to
it, from a court of competent jurisdiction.”
       Confidentiality agreements that allow an employer (but not
an employee) to seek injunctive relief are not necessarily
substantively unconscionable. A “‘contract can provide a “margin
of safety” that provides the party with superior bargaining
strength a type of extra protection for which it has a legitimate
commercial need without being unconscionable.’” (Armendariz v.
Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at
p. 117; accord, Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237,




                                  24
1250.) And courts have recognized a legitimate commercial need
to protect confidential, proprietary information and trade secrets.
(See Baltazar, at p. 1250 [recognizing a “legitimate commercial
need to protect [the employer’s] ‘valuable trade secrets and
proprietary and confidential information’ from public disclosure”
such that a confidentiality provision favoring the employer did
not render an arbitration agreement with the employee “unduly
harsh or one-sided”]; Alberto v. Cambrian Homecare, supra,
91 Cal.App.5th at p. 492 [“provisions that allow employers to seek
a preliminary injunction outside of arbitration for breach of a
confidentiality agreement are not, by themselves, unconscionable,
simply because they primarily benefit employers”]; Lange v.
Monster Energy Co. (2020) 46 Cal.App.5th 436, 450-451
[provision allowing an employer to seek preliminary injunctive
relief for breach of a confidentiality agreement was within the
legitimate “margin of safety” for the employer and was not
unconscionable].)
       Some courts have found substantively unconscionable
confidentiality agreements that relieve an employer of multiple,
burdensome aspects of enforcing the agreement. (See, e.g.,
Alberto v. Cambrian Homecare, supra, 91 Cal.App.5th at p. 492
[recognizing a legitimate business need for injunctive relief, but
holding “additional provisions that waive the employer’s need to
obtain a bond before seeking an injunction, waive the employer’s
need to show irreparable harm, and require an employee to
consent to an immediate injunction are unconscionable” because
“[t]hey exceed the legitimate ‘margin of safety’ for the employer
and are not mutual”].) For example, in Silva v. Cross Country
Healthcare, Inc., supra, 111 Cal.App.5th 1311 the court held
substantively unconscionable “the employee’s contractually




                                25
mandated concessions in the Employment Agreement (without
similar concessions in the employees’ favor) that the
confidentiality, noncompete and nonsolicitation covenants are
lawful, that any breach of those covenants ‘will cause irreparable
harm’ to [the employer] (thereby justifying injunctive relief), that
[the employer] (but not the employee) is ‘entitled to temporary,
preliminary and permanent injunctive relief,’ and that [the
employer] need not post a bond to obtain any such relief.” (Id. at
p. 1329.) The court in Silva held that, though an employer may
have a legitimate need to seek injunctive relief for certain
violations of its confidentiality agreement, the mandatory
employee concessions went well beyond what was necessary to
preserve that right. (Ibid.)
       Contrary to the trial court’s ruling, the confidentiality
agreement in this case does not include the types of provisions
courts have found substantially unconscionable. The
confidentiality agreement in Silva stated the employee
“‘acknowledges and agrees that any breach’” of the confidentiality
agreement provisions “‘will cause irreparable harm to [the
employer], for which a remedy in the form of damages will not be
adequate or otherwise ascertainable.’” (Silva v. Cross Country
Healthcare, Inc., supra, 11 Cal.App.5th at p. 1319, italics
omitted.) The confidentiality agreement in this case does not
include a similar concession; it states a breach of the
confidentiality agreement “may allow a party or third parties to
unfairly compete” with Studebaker. The agreement in Silva also
stated the employee “‘agrees that [the employer] will be entitled
to temporary, preliminary and permanent injunctive relief
against’” the employee for a breach and “‘agrees’ that [the
employer] is entitled to this injunctive relief ‘without having to




                                26
post bond.’” (Ibid., italics omitted.) In contrast, the
confidentiality agreement in this case states only that
Studebaker “will be entitled to appropriate equitable relief . . .
from a court of competent jurisdiction,” i.e., whatever relief a
court determines is appropriate based on Studebaker’s
evidentiary showing. And the confidentiality agreement does not
waive the bond requirement.
       The trial court also erred in ruling the confidentiality
agreement was one-sided because it exempted Studebaker from
the requirement to arbitrate all employment-related claims,
while requiring Santana to submit his claims to arbitration. To
be sure, lack of mutuality in an arbitration agreement is a
hallmark of substantive unconscionability. (See Alberto v.
Cambrian Homecare, supra, 91 Cal.App.5th at p. 492 [the
“‘“paramount consideration in assessing . . . conscionability is
mutuality”’”]; Davis v. Kozak (2020) 53 Cal.App.5th 897, 910
[same], disapproved on another ground in Ramirez v. Charter
Communications, Inc., supra, 16 Cal.5th at pp. 505-506.) “Courts
have found a lack of sufficient mutuality where the agreement
exempts from arbitration the types of claims an employer is likely
to bring against an employee.” (Davis, at pp. 914-915; see
Carlson v. Home Team Pest Defense, Inc. (2015) 239 Cal.App.4th
619, 634 [“‘[c]ourts have found one-sided employer-imposed
arbitration provisions unconscionable where they provide that
employee claims will be arbitrated, but the employer retains the
right to file a lawsuit in court for claims it initiates, or where only
the types of claims likely to be brought by employees (wrongful
termination, discrimination etc.) are the only ones made subject
to arbitration’”].)




                                  27
       But the trial court erred in interpreting the confidentiality
agreement to exempt Studebaker from the requirement to
arbitrate its employment-related disputes. The court interpreted
the remedies provision in the confidentiality agreement to mean
Studebaker could seek equitable relief and “all other forms of
relief available to it”—under both the confidentiality agreement
and the arbitration agreement—in court. This interpretation
rendered as surplusage Studebaker’s agreement to arbitrate
claims against Santana for “theft of money or trade secrets,
breach of a confidentiality Agreement, or breach of a contract”;
“[a]ny claim the Company may enjoy against employees,
regardless of the nature, arising from the employment
relationship”; and “any and all claims arising out of the
employment relationship it may enjoy against [Santana].” (See
Yahoo Inc. v. National Union Fire Ins. Co. etc. (2022) 14 Cal.5th
58, 69 [“Courts will favor an interpretation that gives meaning to
each word in a contract over an interpretation that makes part of
the writing redundant.”]; Coral Farms, L.P. v. Mahony (2021)
63 Cal.App.5th 719, 727 [“Contracts ‘are construed to avoid
rendering terms surplusage.’”]; Shell Oil Co. v. Winterthur Swiss
Ins. Co. (1993) 12 Cal.App.4th 715, 753 [“The way we define
words [in a contract] should not produce redundancy, but instead
should give each word significance.”].)
       Rather than interpreting the confidentiality agreement to
conflict with the agreement to arbitrate or to render multiple
provisions in the agreement to arbitrate surplusage, we interpret
the agreements in harmony with one another. (See Civ. Code,
§ 1652; Robles v. City of Ontario (2024) 106 Cal.App.5th 574, 582
[courts “must also endeavor to give effect to every part of a
contract”]; Condon-Johnson & Associates, Inc. v. Sacramento




                                 28
Municipal Utility Dist. (2007) 149 Cal.App.4th 1384, 1398 [courts
must make every effort reasonably possible to give meaning and
effect to every clause in the contract]; Friedman Prof.
Management Co., Inc. v. Norcal Mutual Ins. Co. (2004)
120 Cal.App.4th 17, 33 [courts must interpret contracts “to try to
give effect to every clause and harmonize the various parts with
each other”].) Reading the agreement to arbitrate and the
confidentiality agreement together and giving meaning to all the
provisions, we interpret the agreements to require Studebaker to
arbitrate its employment-related claims against Santana,
including any claim for breach of the confidentiality agreement.
In addition to the relief available in arbitration (i.e., “all other
forms of relief”), Studebaker may also seek equitable relief (i.e.,
an injunction) in court.
       Finally, the trial court erred in ruling the confidentiality
agreement provided Studebaker “only needs to prove a breach or
threat of a breach, and not the other elements, to be entitled to
an injunction.” “In determining whether to grant a preliminary
injunction, the trial court ‘“‘evaluate[s] two interrelated
factors . . . . The first is the likelihood that the plaintiff will
prevail on the merits at trial. The second is the interim harm
that the plaintiff is likely to sustain if the injunction were denied
as compared to the harm the defendant is likely to suffer if the
preliminary injunction were issued.’”’” (Santa Clara Valley Water
District v. Eisenberg (2025) 117 Cal.App.5th 714, 727.) The
confidentiality agreement does not relieve Studebaker of the
burden to establish either a likelihood of success at trial or
interim harm. The confidentiality agreement provides only that
a breach of that agreement “may” allow a third party to unfairly
compete with Studebaker. It does not include an agreement or




                                 29
concession by Santana that a breach of the confidentiality
agreement will necessarily result in harm to Studebaker, nor
does it contain any other provision diminishing the proof required
to obtain an injunction.

                         DISPOSITION

      The order denying Studebaker’s motion to compel
arbitration is reversed. The trial court is directed to enter a new
order granting the motion to compel arbitration. Studebaker is to
recover its costs on appeal.




                                     SEGAL, Acting P. J.

We concur:




             FEUER, J.




             STONE, J.




                                30
Filed 4/22/26
                         CERTIFIED FOR PUBLICATION

       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                               DIVISION SEVEN


 J. ASENCION SANTANA,                B343640

         Plaintiff and               (Los Angeles County
         Respondent,                 Super. Ct. No. 24STCV12865)

         v.                          ORDER CERTIFYING
                                     OPINION FOR
 STUDEBAKER HEALTH                   PUBLICATION
 CARE CENTER, LLC,                   (NO CHANGE IN THE
                                     APPELLATE JUDGMENT)
         Defendant and
         Appellant.

       THE COURT:
       The opinion in this case filed April 7, 2026 was not certified for
publication. It appearing the opinion meets the standards for publication
specified in California Rules of Court, rule 8.1105(c).
       IT IS HEREBY CERTIFIED that the opinion meets the standards for
publication specified in California Rules of Court, rule 8.1105(c); and
       ORDERED that the words “Not to be Published in the Official Reports”
appearing on page 1 of said opinion be deleted and the opinion herein be
published in the Official Reports.



_____________________________________________________________________
SEGAL, Acting P. J.            FEUER, J.                   STONE, J.