Christine Khanh Le, et al. v. Sirena Del Mar, LLC

Case Number

25CV04013

Case Type

Hearing Date / Time

Wed, 01/07/2026 - 10:00

Nature of Proceedings

Defendants’ Motion to Compel Individual Arbitration and Dismiss Class Claims

Tentative Ruling

For Plaintiffs Christine Khanh Le, Tra Dang Huong Nguyen, and Michael Tang Loc Ho, individually and on behalf of all others similarly situated: John G. Yslas, Arrash T. Fattahi, John O. Bishay, Wilshire Law Firm

For Defendant Sirena Del Mar, LLC: Alex Polishuk, Caitlyn Cox, Polsinelli LLP

                       

RULING

Defendant’s Motion to Compel Individual Arbitration and Dismiss Class Claims is granted in part and denied in part. All of Plaintiffs’ individual claims are severed and arbitration of those claims is ordered. The action, as it relates to class claims, is stayed pending the outcome of arbitration.

Background

This action commenced on June 27, 2025, by the filing of the class action complaint by Plaintiffs Christine Khanh Le, Tra Dang Huong Nguyen, and Michael Tang Loc Ho (collectively “Plaintiffs”) against Defendant Sirena Del Mar, LLC (“Defendant”) for: (1) Failure to pay minimum and straight time wages; (2) Failure to pay overtime wages; (3) Failure to provide meal periods; (4) Failure to authorize and permit rest periods; (5) Failure to timely pay final wages at termination; (6) Failure to provide accurate itemized wage statements; (7) Failure to indemnify employees for expenditures; and (8) Unfair business practices.

On August 27, 2025, Defendant answered the complaint with a general denial and 38 affirmative defenses.

Based on signed agreements to arbitrate, Defendant now moves to compel Plaintiffs to arbitrate their individual claims and to dismiss the class claims.

Plaintiffs oppose the motion.

Analysis

“[T]he Legislature has expressed a ‘strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution.’ [Citations.] Consequently, Courts will ‘indulge every intendment to give effect to such proceedings.’ [Citations.]” (Mancharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.)

“California law, like federal law, favors enforcement of valid arbitration agreements.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.)

“Under both federal and California state law, arbitration is a matter of contract between the parties.” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 787.)

Arbitration agreements are valid and enforceable under both California and Federal Law. “A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.)

“The burden of persuasion is always on the moving party to prove the existence of an arbitration agreement with the opposing party by a preponderance of the evidence.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164.)

1. Existence of the Arbitration Agreement

“General principles of contract law determine whether the parties have entered a binding agreement to arbitrate.” (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

Plaintiffs do not dispute the existence of the arbitration agreements, or that they were electronically signed by each of the Plaintiffs.

The arbitration agreements provide, in pertinent part:

“This Mutual Arbitration Agreement is a contract and covers important issues relating to your rights. It is your sole responsibility to read it and understand it. You are free to seek assistance from independent advisors of your choice outside the Company or to refrain from doing so if that is your choice.”

“The Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) governs this Agreement. The parties understand and agree that the Company is engaged in transactions involving interstate commerce and that this Agreement evidences a transaction involving interstate commerce. EXCEPT AS THIS AGREEMENT OTHERWISE PROVIDES, ALL DISPUTES COVERED BY THIS AGREEMENT WILL BE DECIDED BY AN ARBITRATOR THROUGH FINAL AND BINDING ARBITRATION AND NOT BY WAY OF COURT OR JURY TRIAL.”

“Except as otherwise provided in this Agreement, this Agreement applies to any and all disputes, past, present or future, that may arise between Employee . . . and the Company, including without limitation any dispute arising out of or related to Employee’s application, employment and/or separation of employment with the Company. This Agreement applies to a covered dispute that the Company may have against Employee or that Employee may have against the Company, its parent companies, subsidiaries, related companies and affiliates, franchisors, or their officers, directors, principals, shareholders, members, owners, employees, and managers or agents, each and all of which may enforce this Agreement as direct or third-party beneficiaries.”

“The claims subject to arbitration are those that absent this Agreement could be brought under applicable law. Except as it otherwise provides, this Agreement applies, without limitation, to claims based upon or related to the application for employment, background checks, privacy, the employment relationship, discrimination, harassment (except for conduct that is alleged to constitute sexual harassment under applicable federal, tribal or state law), retaliation, defamation (including claims of post-employment defamation or retaliation), breach of a contract or covenant, fraud, negligence, emotional distress, breach of fiduciary duty, trade secrets, unfair competition, wages, minimum wage and overtime or other compensation claimed to be owed, breaks and rest periods, expense reimbursement, seating, termination, tort claims (except for claims of nonconsensual sexual act or sexual contact, as such terms are defined in 18 U.S.C. § 2246 or similar tribal or state law, including when the victim lacks capacity to consent), equitable claims, and all statutory and common law claims unless specifically excluded below. Except as it otherwise provides, the Agreement covers, without limitation, claims arising under the Fair Credit Reporting Act, Defend Trade Secrets Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Family Medical Leave Act, the Fair Labor Standards Act, Rehabilitation Act, the Civil Rights Acts of 1866 and 1871, the Civil Rights Act of 1991, 8 U.S.C. § 1324 (unfair immigration related practices), the Pregnancy Discrimination Act, the Equal Pay Act, the Genetic Information Non-

Discrimination Act, Employee Retirement Income Security Act of 1974 (except for claims for employee benefits under any benefit plan sponsored by the Company and (a) covered by the Employee Retirement Income Security Act of 1974 or (b) funded by insurance), Affordable Care Act, Uniformed Services Employment and Reemployment Rights Act, Worker Adjustment and Retraining Notification Act, Older Workers Benefit Protection Act of 1990, False Claims Act, Occupational Safety and Health Act, Consolidated Omnibus Reconciliation Act of 1985, and state statutes or regulations, if any, addressing the same or similar subject matters, and all other federal or state legal claims arising out of or relating to Employee’s employment or the termination of employment. This Agreement also applies to individual claims arising under the California Private Attorneys General Act.”

“This Agreement does not apply to: (i) claims for worker’s compensation benefits, state disability insurance or unemployment insurance benefits; however, this Agreement applies to retaliation claims related to such benefits, such as claims for worker’s compensation retaliation; and (ii) disputes that an applicable federal statute expressly states cannot be arbitrated or subject to a pre-dispute arbitration agreement (for example, this Agreement does not apply to sexual assault disputes or sexual harassment disputes, as those terms are defined in Chapter 4 of the Federal Arbitration Act (9 U.S.C. § 401 et seq.)).”

“This Agreement affects your ability to bring or participate in class, collective and representative actions. Both you and the Company agree to bring any covered claim(s) or dispute(s) in arbitration on an individual basis only, and not on a class, collective or representative action basis on behalf of others. There will be no right or authority for any claim or dispute to be brought, heard or arbitrated as a class, collective or representative action, or as a member in any such class, collective or representative action proceeding, and the arbitrator will have no authority to hear or preside over any such claim(s) or dispute(s) (“ ‘Class Action Waiver’ ”). Regardless of anything else in this Agreement and/or the American Arbitration Association (“ ‘AAA’ ”) Rules (described below), any dispute relating to the scope, validity, conscionability, interpretation, applicability, or enforceability of the Class Action Waiver, or any dispute relating to whether this Arbitration Agreement precludes a class, collective or representative action proceeding, may only be determined by a Court and not an arbitrator. In any case in which (a) the dispute is filed as a class, collective or representative action and (b) there is a final judicial determination that all or part of the Class Action Waiver is unenforceable, the class, collective or representative action to that extent must be litigated in a civil Court of competent jurisdiction, but the portion of the Class Action Waiver that is enforceable shall be enforced in arbitration. You will not be retaliated against, disciplined, or threatened with discipline by the filing of or participation in a class, collective or representative action in any forum. However, the Company may lawfully seek enforcement of this Agreement and the Class Action Waiver under the Federal Arbitration Act and seek dismissal of such class, collective or representative actions or claims. The Class Action Waiver shall be severable in any case in which the dispute is filed as an individual action and severance is necessary to ensure that the individual action proceeds in arbitration. Nothing herein shall be construed as a waiver of any rights you may have to pursue an individual civil action under the California Private Attorneys’ General Act through binding arbitration.”

The agreement then discusses selection of the arbitrator, the procedure for initiating arbitration, rules and standards governing arbitration proceedings, and payment of fees.

2. Federal Arbitration Act

Defendant argues that the FAA governs the arbitration agreement. Plaintiffs argue that because Defendant has not provided sufficient evidence that it is engaged in interstate commerce, that the FAA does not apply.

“The party asserting the FAA bears the burden to show it applies by presenting evidence establishing the contract with the arbitration provision has a substantial relationship to interstate commerce.” (Carbajal v. CWPCS, Inc. (2016) 245 Cal.App.4th 227, 234.) “In determining whether the employment agreement involved interstate commerce, the parties’ subjective intent is not the determining factor. “ ‘[E]videncing a transaction involving commerce’ ” (9 U.S.C. § 2) simply means that “ ‘the ‘transaction’ in fact ‘involv[e]s’ interstate commerce, even if the parties did not contemplate an interstate commerce connection.’ ” [Citation.]” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1286.)

The United States Supreme Court has “interpreted the term ‘involving commerce’ in the FAA as the functional equivalent of the more familiar term ‘affecting commerce’—words of art that ordinarily signal the broadest permissible exercise of Congress’ Commerce Clause power. [Citation.]” (The Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56.) Under this broad interpretation, “application of the FAA [is not] defeated because the individual [transaction], taken alone, did not have a ‘substantial effect on interstate commerce.’ [Citation.] Congress’ Commerce Clause power ‘may be exercised in individual cases without showing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent ‘a general practice . . . subject to federal control.’ [Citations.] Only that general practice need bear on interstate commerce in a substantial way. [Citations.]” (Id. at pp. 56-57.)

In the absence of a substantial relationship to interstate commerce “the language of the Agreement, not an analysis of interstate commerce, dictates the applicable law.” (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 179.)

Here, the parties entered into an agreement that any disputes will be determined by arbitration under the FAA. Despite Plaintiffs’ argument to the contrary, this agreement alone is sufficient to determine that the FAA is applicable to the arbitration.

Plaintiffs argue that Labor Code section 229 prohibits arbitration of wage and hour claims, yet implicitly acknowledge that if the FAA applies section 229 is preempted. “In matters in which the FAA applies, it preempts Labor Code section 229, requiring arbitration of claims that otherwise could be resolved in Court.” (Performance Team Freight Systems, Inc. v. Aleman (2015) 241 Cal.App.4th 1233, 1240.)

The FAA governs the agreement, and arbitration is not barred by either section 229 or 432.6 of the Labor Code.

3. Unconscionability

“Unconscionable arbitration agreements are not enforceable.” (Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242, 1245.) “To be voided on this ground, the agreement must be both procedurally and substantively unconscionable.” (Ibid.) Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power: substantive unconscionability on overly harsh or one-sided results. (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal. 4th 1109.) “But they need not be present to the same degree.” (Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at p. 114.) Rather, the Court invokes a “sliding scale” to determine unconscionability: “The more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Ibid.) The burden of proving unconscionability rests upon the party asserting it.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.) Unconscionability is a question of law. (Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1562.)

Most employment related arbitration agreements are procedurally unconscionable because they are presented on a “take-it-or-leave-it” basis. “ ‘The term [contract of adhesion] signifies 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.] “ ‘Arbitration contracts imposed as a condition of employment are typically adhesive.’ ” [Citation.]” (Davis v. Kozak (2020) 53 Cal.App.5th 897, 906, disapproved on another ground in Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 505.)

“When arbitration is a condition of employment, there is inherently economic pressure on the employee to accept arbitration. This alone is a fairly low level of procedural unconscionability.” (Alvarez v. Altamed Health Services Corp. (2021) 60 Cal.App.5th 572, 591.)

As the subject arbitration agreements do appear to be conditions of employment, there is a low level of procedural unconscionability. However, the Court does not find any substantive unconscionability.

Despite Plaintiffs’ argument to the contrary, the arbitration agreement is clear, is mutual, it is not overbroad, and the duration of the agreement is not indefinite.

Arbitration of Plaintiffs’ individual claims will be ordered.

Defendant requests that the Court dismiss Plaintiffs’ class claims. Although the Court does have the authority to do so, the Court believes that it is better practice to stay the non-arbitrable class aspect portion of the case rather than dismiss it currently.

“If a Court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a Court of this State, the Court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the Court specifies.” (Code Civ. Proc., § 1281.4.)