Bennett v. VXI Global Solutions
CourtCalifornia Court of Appeal
Date FiledNovember 13, 2026
DocketB346763
StatusPublished
📰 News Coverage: Read the LAWS.com news report on this case
Full Opinion
Filed 11/13/26
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
TRACIE BENNETT, B346763
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 23STCV24278)
v.
VXI GLOBAL SOLUTIONS, LLC,
Defendant and Appellant.
APPEAL from an order of the Superior Court of
Los Angeles County. David S. Cunningham III, Judge. Affirmed.
Lathrop GPM, Laura Reathaford and Jeffrey Richmond for
Defendant and Appellant.
Lavi & Ebrahimian, Joseph Lavi, Jordan D. Bello, and
Brett Szmanda for Plaintiff and Respondent.
_________________________________
INTRODUCTION
Defendant VXI Global Solutions, LLC (Global) appeals
from the trial court’s order denying its motion to compel
arbitration of plaintiff Tracie Bennett’s claims arising out of her
employment with the company. The trial court refused to enforce
an arbitration agreement between the parties after finding it was
both procedurally and substantively unconscionable and that the
unconscionability could not be cured through severance. We
affirm.
Although the execution of the parties’ arbitration
agreement involved a low degree of procedural unconscionability,
the agreement contains several substantively unconscionable
provisions, including an unreasonably broad scope, unlimited
duration, and lopsided application in favor of Global and the
agreement’s third party beneficiaries. Because the agreement is
permeated with illegality and its unconscionability cannot be
cured through severance, we conclude the trial court did not
abuse its discretion in refusing to enforce the agreement.
BACKGROUND
Global runs customer service call centers throughout the
country. Global hired Bennett, who has a high school education,
as an account associate in February 2023. Bennett worked for
Global until April 2023.
When Global hired Bennett, it gave her an approximately
100-page new hire packet, which included various policies and
forms. An arbitration agreement and a confidentiality agreement
were included in the middle of the packet. Bennett understood
that she was required to sign the arbitration and confidentiality
agreements as part of her hiring.
2
Bennett signed the arbitration and confidentiality
agreements. Bennett did not consult an attorney before signing
them. Global’s corporate counsel testified that Bennett “was
provided with the opportunity during the new hire orientation to
review the new hire packet before signing it.”
The arbitration agreement, which was drafted by Global
and reads as if it was written from Bennett’s point of view, states
in pertinent part:
“I recognize that differences may arise between [Global]
(the “Company”) and me during or after my employment with the
Company and that those differences may or may not be related to
my employment.… [¶] I understand that any reference in this
Agreement to the Company will be a reference to the Company
and all of its past and present partners, officers, directors and
employees; all subsidiary and affiliate entities, all benefit plans,
the benefit plans’ sponsors, fiduciaries, administrators, affiliates
and all successors and assigns of any of them.
“1. Claims Covered by this Agreement. The Company and I
agree to resolve, by arbitration, all individual claims or
controversies, except as excluded in paragraph 2 below, involving
the Company and any of its past or present partners, officers,
employees or agents, whether or not those claims or controversies
arise out of my employment with the Company or the
termination of my employment (“Claims”). Subject to the
exclusions in paragraph 2, the Claims covered by this Agreement
include, but are not limited to, claims for wages, bonuses,
commissions or any other form of compensation; claims for breach
of any contract, express or implied; tort claims; claims for
discrimination or harassment, including but not limited to
discrimination or harassment based on race, sex, religion,
3
national origin, age, marital status, physical or mental disability,
medical condition or sexual orientation; claims for benefits; all
claims for violation of or damages under any federal, state or
other governmental law, statute, ordinance, Executive Order or
regulation; and claims by the Company for injunctive and/or
other equitable relief for, among other claims, unfair competition,
the use or unauthorized disclosure or misappropriation of trade
secrets or client information, the disclosure of any other
confidential information or the violation of any confidentiality
agreement which may be in effect between me and the Company.
“2. Claims not Covered by the Agreement. This Agreement
does not apply to or cover claims by me for workers’ compensation
benefits or unemployment compensation benefits; claims based
upon an employee pension or benefit plan, the terms of which
may contain an arbitration or other dispute resolution procedure,
in which case the provisions of such plan shall control; charges
filed with any administrative or government agency (e.g., the
National Labor Relations Board or the Equal Employment
Opportunity Commission); and any other claim that cannot be
referred to arbitration as a matter of law.”
“5. Arbitration Fees and Costs. The Company shall pay the
fees and costs of the arbitrator to the full extent required by law.
The Company will deposit such funds for the Arbitrator’s fee, as
the Arbitrator may determine to be necessary. Both the
Company and I will pay our own costs and attorneys’ fees, unless
otherwise required by law.
“6. Interstate Commerce. I understand and agree that the
Company is engaged in transactions involving interstate
commerce and that my employment involves such commerce.
4
“7. Requirements for Modification or Revocation. This
Agreement can only be revoked or modified by a writing signed
by all of the partners of the Company and me which specifically
states intent by both of us to revoke or modify this Agreement.
“8. Sole and Entire Agreement. This is the complete
agreement between the Company and me on the subject of the
arbitration of disputes (except for any arbitration agreement in
connection with any pension or benefit plan). This Agreement
supersedes any prior or contemporaneous oral or written
understanding on the subject. Neither the company nor I is
relying on any representations, oral or written, on the subject of
the effect, enforceability or meaning of this Agreement except as
specifically set forth in this Agreement.
“9. Construction. If any provision of this Agreement is
determined to be void or otherwise unenforceable, in whole or in
part, such determination shall not affect the validity of the
remainder of this Agreement.”
“11. Survival of Provisions. This Agreement to arbitrate
shall survive the termination of my employment and shall apply
to any Claims whether they arise or are made during or after the
ending of my employment or other relationship with the
Company.”
Finally, on its stand-alone signature page, the arbitration
agreement states: “The Company and I acknowledge that we
have both carefully read this Agreement, that all understandings
between me and the Company relating to the subject matter of
arbitration are contained in it, … and that … we have had an
opportunity to discuss this Agreement with attorneys of our
choice prior to signing it and we have used that opportunity to
the extent we wish to do so.”
5
The confidentiality agreement, which Bennett signed on
the same day she signed the arbitration agreement, provides in
pertinent part:
“EMPLOYEE agrees that disclosure or use of confidential
information by EMPLOYEE, other than for the sole benefit of
[Global] or by any nonsupervisory employees to engage in
protected concerted activities under the [National Labor
Relations Act], would be wrongful and would cause irreparable
harm to [Global]. If EMPLOYEE is in doubt as to whether
certain information is confidential, EMPLOYEE will treat such
information as Confidential and proprietary information.”
“EMPLOYEE agrees that he or she will not solicit any of
[Global’s] employees for a competing business or otherwise induce
or attempt to induce such employees to terminate their
employment with [Global] during his or her employment and for
a period of one (1) year following the termination of such
employment.”
“EMPLOYEE agrees that it would be difficult to measure
damages to [Global] from any breach by EMPLOYEE of this
Agreement, and that any harm to [Global] caused by such a
breach would be difficult to calculate. For these reasons, money
damages may be an inadequate remedy to [Global] for
EMPLOYEE’S breach of this Agreement. EMPLOYEE
acknowledges that, in addition to all other remedies it may have,
[Global] will be entitled to temporary and permanent injunctive
relief to enforce the provisions of the Agreement, and that such
relief may be granted without prior actual notice and without the
necessity of proving actual damages sustained by [Global].”
In October 2023, Bennett filed a class action lawsuit
against Global, asserting 10 causes of action, including claims for
6
failure to pay minimum wages and overtime, and failure to
provide adequate meal and rest breaks.
Global moved to compel arbitration of Bennett’s claims
based on the arbitration agreement that Bennett signed. Bennett
opposed Global’s motion, arguing, among other things, that the
agreement was procedurally and substantively unconscionable
and that the court should refuse to enforce the agreement
because it was drafted in bad faith and permeated with illegality,
and its unconscionable aspects could not be removed or limited
without rewriting its terms.
The trial court denied Global’s motion to compel
arbitration. As a threshold matter, the court found that the
arbitration agreement was governed by the Federal Arbitration
Act (FAA) (9 U.S.C. § 1 et seq.). The court found that the
agreement contained a low degree of procedural
unconscionability because it was a contract of adhesion.
Following the decision in Cook v. University of Southern
California (2024) 102 Cal.App.5th 312 (Cook), the trial court
found that at least two aspects of the arbitration agreement were
substantively unconscionable: (1) the scope of the agreement was
unreasonably overbroad because it expressly applies to claims
unrelated to Bennett’s employment; and (2) the duration of the
agreement was unreasonably long because it survived the
termination of Bennett’s employment and could only be revoked
or terminated by agreement between Bennett and Global. The
court rejected Bennett’s other arguments that the agreement was
substantively unconscionable, including her claims that it
impermissibly restricted her ability to recover attorney fees and
required her to waive her right to pursue a public injunction and
a representative action under the Private Attorney Generals Act
7
of 2004 (PAGA) (Lab. Code, § 2698 et seq.). The court did not
address Bennett’s arguments that the confidentiality agreement’s
noncompete and nonsolicitation clauses, which she argued should
be read together with the arbitration agreement, were
unconscionable. Nevertheless, the court found that the
arbitration agreement was unenforceable because its
unconscionable aspects could not be severed or restricted without
rewriting its terms.
Global appeals.
DISCUSSION
1. General legal principles
Where, as here, an arbitration agreement is governed by
the FAA, the agreement is “valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.” (9 U.S.C. § 2.) Generally applicable
contract defenses, like unconscionability, may be used to
invalidate arbitration agreements without violating the FAA.
(OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125 (OTO); Viking
River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 650 (Viking
River).)
“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, supra, 8 Cal.5th at p. 125.) The party resisting
enforcement of an arbitration agreement has the burden to
establish unconscionability. (Ramirez v. Charter
Communications, Inc. (2024) 16 Cal.5th 478, 492 (Ramirez).)
Unconscionability has procedural and substantive
elements. (Ramirez, supra, 16 Cal.5th at p. 492.) Procedural
unconscionability looks at the “ ‘circumstances of contract
8
negotiation and formation, focusing on oppression or surprise due
to unequal bargaining power.’ ” (Ibid.) This element typically is
established by showing the agreement is a contract of adhesion,
which is a standardized contract that is imposed and drafted by
the party with superior bargaining power and relegates to the
other party only the opportunity to sign or reject it. (Ibid.)
Substantive unconscionability focuses on the “ ‘fairness of
an agreement’s actual terms,’ ” looking at whether the agreement
will create unfair or one-sided results. (Ramirez, supra,
16 Cal.5th at p. 493.) “Substantively unconscionable contractual
clauses ‘reallocate risks in an objectively unreasonable or
unexpected manner.’ ” (Ibid.)
Both procedural and substantive elements must be present
to deem an agreement’s term unconscionable, but they need not
be present to the same degree. (Ramirez, supra, 16 Cal.5th at
p. 493.) Courts apply a sliding scale analysis, where the more
procedurally unconscionable a contract term is, the less evidence
of substantive unconscionability is required to conclude the term
is unenforceable, and vice versa. (Ibid.) Unconscionability is
determined with reference to when the contract was formed “and
cannot be resolved by hindsight by considering circumstances of
which the contracting parties were unaware.” (Ibid.)
Where, as here, the evidence is undisputed, we review de
novo a trial court’s order denying arbitration on the grounds that
the agreement to arbitrate is unconscionable. (Ramirez, supra,
16 Cal.5th at p. 493.)
2. The arbitration agreement and the confidentiality
agreement should be read together
As a threshold matter, we must determine whether the
arbitration agreement and the confidentiality agreement should
9
be read together when evaluating whether the arbitration
agreement is unconscionable. We conclude that they should.
Under Civil Code section 1642, separate agreements that
relate to the same subject matter and were executed in the same
transaction should be construed together as one contract.
(§ 1642; Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93, 109
(Fuentes).) “According to that rule, documents executed as part of
a single transaction are construed together, even if they do not
expressly refer to one another.” (Alberto v. Cambrian Homecare
(2023) 91 Cal.App.5th 482, 490 (Alberto).)
The arbitration agreement and the confidentiality
agreement were included in Bennett’s new hire packet and
signed by Bennett on the same day. They were executed as part
of the same transaction—Bennett’s hiring—and they address
similar subject matters—the resolution of disputes between
Bennett and Global. The arbitration agreement broadly
addresses how disputes between Bennett and Global are to be
resolved, while the confidentiality agreement addresses, among
other things, how disputes over alleged breaches of the
confidentiality agreement are to be resolved.
Because the arbitration agreement and the confidentiality
agreement were executed as part of the same transaction and
address similar subject matters, they should be read together.
(Alberto, supra, 91 Cal.App.5th at pp. 490–491.) Failing to read
these two agreements together “artificially segments the parties’
contractual relationship. Treating them separately fails to
account for the overall dispute resolution process the parties
agreed upon.” (Id. at p. 491.) Unconscionability in the
confidentiality agreement will, therefore, affect whether the
arbitration agreement is unconscionable. (Ibid.)
10
3. Procedural unconscionability
The trial court found that the arbitration agreement had a
low degree of procedural unconscionability because it was a
contract of adhesion. Global does not contest this finding. While
Bennett agrees that the agreement is an adhesion contract, she
argues “significantly more procedural unconscionability existed”
because she also presented evidence of oppression and surprise.
As we explain, the agreement’s formation involved a low degree
of procedural unconscionability.
Adhesion contracts ordinarily contain at least a low degree
of procedural unconscionability. (Ramirez, supra, 16 Cal.5th at
p. 494.) Whether even closer scrutiny of an adhesion contract’s
fairness is required turns on the level of oppression and surprise
that were involved in the agreement’s formation. (Fuentes,
supra, 19 Cal.5th at p. 104.)
Oppression exists when a contract involves a lack of
negotiation and meaningful choice. (OTO, supra, 8 Cal.5th at
p. 126.) The circumstances relevant to establishing oppression
include the amount of time the weaker party is given to consider
the proposed contract, the amount and type of pressure exerted
on that party to sign the proposed contract, and the length of the
proposed contract and the length and complexity of the
challenged provision. (Id. at pp. 126–127.)
Here, there is little evidence of additional oppression, aside
from the fact that the arbitration agreement is an adhesion
contract. There is no evidence that Global pressured Bennett to
sign the agreement in a short period of time. Likewise, there is
no evidence that Bennett was not afforded a reasonable
opportunity to review the agreement, either by herself or with the
aid of an attorney, before she signed it. Indeed, the last page of
11
the agreement, which includes Bennett’s signature, states in
clear and simple language that Bennett acknowledged she
“carefully read” the agreement, that “all understandings”
between Global and Bennett were contained in the agreement,
and that Bennett “had an opportunity to discuss the Agreement
with attorneys” and “used that opportunity to the extent [she]
wish[ed]” before signing the agreement.
Bennett points to evidence that she has only a high school
education and was unfamiliar with arbitration and arbitration
agreements when she signed the agreement in this case. Bennett
did not, however, testify that she had difficulty understanding
the terms of the agreement, nor does she otherwise explain how
her education level limited her ability to understand the
agreement’s terms.
As for the length and complexity of the agreement, Bennett
does not argue that the agreement is unreasonably long. She
does contend, however, that the agreement is complex and
difficult to parse. We disagree. While some of the sentences in
the agreement are long—one sentence identifying the covered
claims spans 15 lines—its language is not particularly complex or
difficult to understand. Indeed, the agreement describes the
types of covered and excluded claims in clear and relatively
simple language without being riddled with “statutory references
and legal jargon.” (See OTO, supra, 8 Cal.5th at p. 128.)
In sum, the parties’ execution of the arbitration agreement
involved a low degree of procedural unconscionability.
Accordingly, a high degree of substantive unconscionability is
required to render the agreement unenforceable. (Ramirez,
supra, 16 Cal.5th at p. 493.)
12
4. Substantive unconscionability
“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.’ ” ’ ”
(Fuentes, supra, 19 Cal.5th at p. 106.)
The trial court found two aspects of the arbitration
agreement were substantively unconscionable—its scope and
duration. We agree that the arbitration agreement’s scope and
duration are substantively unconscionable, but we also conclude
that other aspects of the agreement are unconscionable. We
discuss each aspect in turn.
4.1. The arbitration agreement’s unreasonable scope,
unlimited duration, and lopsided application are
substantively unconscionable
The arbitration agreement’s opening paragraph states that
Bennett recognizes that “differences may arise” between herself
and Global, and that “those differences may or may not be related
to [her] employment.” The agreement later states that Bennett
must arbitrate “all individual claims or controversies,” except
certain claims excluded elsewhere in the agreement, “whether or
not those claims or controversies arise out of [her] employment
with the Company or the termination of [her] employment.” The
agreement also provides that it “shall survive the termination of
13
[Bennett’s] employment and shall apply to any Claims whether
they arise or are made during or after the ending of [her]
employment or other relationship with [Global,” and that it
cannot be modified or revoked except by a written agreement to
do so signed by the parties.
When these provisions are read together, the arbitration
agreement’s plain language requires Bennett to arbitrate any
claim she has against Global (except for a narrow class of
expressly excluded claims), even if her claim is wholly unrelated
to her employment and arises well after she stopped working for
the company. In other words, the agreement requires Bennett to
arbitrate nearly any claim she could have against the company
for the rest of her life, until she and Global agree to terminate
the agreement.
Several other courts have found substantively
unconscionable similar language included in employment-related
arbitration agreements. (See, e.g., Cook, supra, 102 Cal.App.5th
at pp. 321–325 [agreement requiring for an indefinite duration
the arbitration of “ ‘all claims, whether or not arising out of
Employee’s University employment, remuneration or
termination’ ”]; Stoker v. Blue Origin, LLC (2026)
120 Cal.App.5th 91, 107–108 [agreement requiring arbitration for
an indefinite duration of “ ‘any and all claims, disputes, or
controversies between the Company and me, including, without
limitation, claims arising out of or relating to’ ” hiring process,
employment, or termination]; Phan v. Knight Sacramento SU Inc.
(2026) 121 Cal.App.5th 641, 654–656 [agreement requiring
arbitration for an indefinite duration of “ ‘any claims’ ” the
employee may have against the employer “ ‘that currently exist or
that may arise in the future’ including ‘any and all claims which
14
arise out of the employment context or any other
interaction/relationship we had, have or may have in the
future’ ”].)
Global does not dispute that it would be unconscionable to
require Bennett to arbitrate claims wholly unrelated to her
employment, including claims that arise or accrue well after her
employment has ended. Instead, Global contends that we should
read the arbitration agreement in a manner that limits its
application only to claims that are related to Bennett’s
employment.
The company argues that it would have been unreasonable
at the time the agreement was executed for the company or
Bennett to expect the agreement’s scope to encompass claims
unrelated to her employment. As a company that operates call
centers, Global argues it is highly unlikely that Bennett and the
company would ever interact with each other outside the context
of Bennett’s employment. This is a far cry, Global claims, from
the circumstances in Cook, where it was much more likely that
the plaintiff employee could develop claims against the defendant
university (or vice versa) for conduct unrelated to, or occurring
after the completion of, the employee’s employment. (See Cook,
supra, 102 Cal.App.5th at p. 318.) Global asserts that the
likelihood that Bennett or the company would ever “actually
develop[] claims against one another that are unrelated to
Bennett’s employment is infinitesimal.”
We reject this argument for a couple of reasons. First, it
asks us to ignore the agreement’s terms. As we noted above, the
agreement expressly states that Bennett must arbitrate “all
individual claims or controversies … whether or not those claims
or controversies arise out of [her] employment with the Company
15
or the termination of [her] employment.” (Italics added.) To
endorse a reading of the agreement that limits its application
only to claims related to Bennett’s employment would require us
to ignore the italicized language or render that language
surplusage. Such a reading “ ‘violates fundamental principles of
contract interpretation.’ ” (Jenkins v. Dermatology Management,
LLC (2024) 107 Cal.App.5th 633, 647.) Had Global intended for
its arbitration agreement to apply only to claims related to
Bennett’s employment, such as claims stemming from her hiring,
her work for the company, her remuneration, or her termination,
it easily could have used language to that effect.
Second, Global’s argument that there is an infinitesimal
chance that Bennett and the company would develop claims
against each other that are unrelated to Bennett’s employment is
undermined by another provision in the arbitration agreement,
which defines the company in an exceedingly broad manner.
The agreement’s second opening paragraph states that Bennett
“understand[s] that any reference in this Agreement to [Global]
will be a reference to the Company and all of its past and present
partners, officers, directors and employees; all subsidiary and
affiliate entities, all benefit plans, the benefit plans’ sponsors,
fiduciaries, administrators, affiliates and all successors and
assigns of any of them.” (Italics added.) Further, Paragraph 1 of
the agreement states that Bennett agrees to arbitrate “all
individual claims or controversies … involving the Company and
any of its past or present partners, officers, employees or agents
… .” (Italics added.) Even assuming the odds are infinitesimally
small that Bennett and Global would ever develop claims against
each other unrelated to Bennett’s employment, the same cannot
be said when the arbitration agreement requires Bennett to
16
arbitrate any claim she has against a broad class of individuals
and entities.
That Bennett must arbitrate any claim she has against
Global’s past or present employees, officers, administrators, and
agents also creates an issue of mutuality, which is a “paramount
consideration” in evaluating the conscionability of a contract.
(Alberto, supra, 91 Cal.App.5th at p. 492.) By expressly defining
Global to include all past or present employees, officers,
administrators, and agents, those individuals and entities are
third party beneficiaries of the agreement. (Ronay Family
Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 839
[by expressly requiring arbitration of claims against the
company’s “agents and registered representatives, the arbitration
clause was intended to benefit” those third parties].) As such,
those third parties can compel Bennett to arbitrate any claims
she may have against them, regardless of whether they are
related to her employment. (Ibid.) The same is not true,
however, for claims that those third party beneficiaries may bring
against Bennett, even if the claims do not relate to her
employment. That is, Bennett cannot compel to arbitration
claims brought by those third party beneficiaries without first
making a showing that those beneficiaries accepted some benefit
under the agreement. (Cook, supra, 102 Cal.App.5th at p. 328.)
The agreement, therefore, creates a one-sided benefit in favor of
its third party beneficiaries, a benefit that Global does not
attempt to justify based on any legitimate “ ‘business realities.’ ”
(Armendariz v. Foundation Health Psychcare Services, Inc. (2000)
24 Cal.4th 83, 117–118 (Armendariz).)
In short, we conclude the arbitration agreement is
substantively unconscionable because it requires Bennett to
17
arbitrate any claim she has against Global and all of its past or
present employees, officers, administrators, and agents, even if
her claims are wholly unrelated to her employment, and it
requires her to do so until she and Global agree to terminate the
agreement. Such a requirement reallocates risks in favor of
Global and its third party beneficiaries in an objectively
unreasonable manner. (Ramirez, supra, 16 Cal.5th at p. 493.)
4.2. The confidentiality agreement is substantively
unconscionable
Bennett also contends that the confidentiality agreement’s
injunctive relief and noncompete provisions are substantively
unconscionable. We agree.
A contract provision is substantively unconscionable if it
“ ‘authorizes the stronger party to obtain injunctive relief without
establishing all of the essential elements for the issuance of an
injunction.’ ” (Lange v. Monster Energy Co. (2020) 46 Cal.App.5th
436, 451 (Lange).) That is so because such a provision lacks
mutuality and exceeds the employer’s legitimate need for a
“ ‘margin of safety.’ ” (Alberto, supra, 91 Cal.App.5th at p. 492.)
Here, the confidentiality agreement states that Bennett
agrees her unauthorized disclosure or use of Global’s confidential
information “would be wrongful and would cause irreparable
harm to” Global. The confidentiality agreement also states that
Global “will be entitled to temporary and permanent injunctive
relief to enforce” the agreement, and “that such relief may be
granted without prior actual notice and without the necessity of
proving actual damages sustained by” the company. In other
words, the confidentiality agreement entitles Global to injunctive
relief for any breach of its terms by Bennett, without any
requirement that the company prove the element of irreparable
18
harm. (See Jay Bharat Developers, Inc. v. Minidis (2008)
167 Cal.App.4th 437, 446 [irreparable harm is one of the factors
courts must consider when deciding whether to issue an
injunction].) Because Global identifies no legitimate commercial
reason for a contractual provision that relieves it of the need to
establish essential elements for the issuance of an injunction, the
injunctive relief provision of the confidentiality agreement is
substantively unconscionable. (Lange, supra, 46 Cal.App.5th at
pp. 449–451.)
The agreement’s nonsolicitation clause also is
unconscionable. Business and Professions Code section 16600
renders void “every contract by which anyone is restrained from
engaging in a lawful profession, trade, or business of any kind.”
(AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018)
28 Cal.App.5th 923, 935 (AMN).) Under this statute, an
employer generally may not contract to prohibit a former
employee from soliciting business from the employer’s other
employees or clients. (Id. at pp. 936–939.) One exception exists
where the nonsolicitation prohibition is tied to the former
employee’s use of illegal means to solicit business, such as by
using the employer’s trade secrets or confidential information.
(ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006,
1017.)
Here, the confidentiality agreement states that Bennett
“agrees that … she will not solicit any of [Global’s] employees for
a competing business or otherwise induce or attempt to induce
such employees to terminate their employment with [Global]
during his or her employment and for a period of one (1) year
following the termination of such employment.” Because this
provision is not limited to restricting Bennett from using illegal
19
means to solicit business from Global’s employees, it is invalid.
(AMN, supra, 28 Cal.App.5th at pp. 936–939.)
Because we must read the arbitration agreement together
with the confidentiality agreement, the substantive
unconscionability of the confidentiality agreement’s noncompete
and injunctive relief provisions further render the arbitration
agreement substantively unconscionable.
4.3. Conclusion
Considering the arbitration agreement and confidentiality
agreement together, we conclude that the arbitration agreement
contains a high degree of substantive unconscionability.
Accordingly, we need not address Bennett’s arguments that other
provisions in the agreement are substantively unconscionable.
We now turn our analysis to whether the trial court correctly
refused to enforce the agreement.
5. Severance
Under Civil Code section 1670.5, subdivision (a), if a
contract or any term of a contract is unconscionable, the trial
court may: (1) “refuse to enforce the contract”; (2) sever the
unconscionable clause and “enforce the remainder of the
contract”; or (3) “limit the application of any unconscionable
clause as to avoid any unconscionable result.” (See Ramirez,
supra, 16 Cal.5th at p. 513.)
When determining whether to enforce an unconscionable
contract, the court should consider whether its “ ‘central purpose
… is tainted with illegality.’ ” (Ramirez, supra, 16 Cal.5th at
p. 516.) If it is, the unconscionability cannot be cured, and the
court should refuse to enforce the contract. (Ibid.) At this stage
of the analysis, “no bright-line rule requires a court to refuse
enforcement if a contract has more than one unconscionable
20
term.” (Ibid.) Nevertheless, “it is fair to say that the greater the
number of unconscionable provisions a contract contains the less
likely it is that severance will be the appropriate remedy.” (Id. at
p. 517.)
If the contract’s central purpose is not tainted with
illegality, the court should determine whether it can cure the
contract’s unconscionability by severing or restricting the
unconscionable terms. (Ramirez, supra, 16 Cal.5th at p. 516.) If
the court cannot cure the unconscionability without augmenting
or rewriting the contract’s terms, it “should refuse to enforce the
contract.” (Ibid.) “Courts cannot ‘rewrite agreements and impose
terms to which neither party has agreed.’ ” (Ibid.)
We review for abuse of discretion a trial court’s decision
whether to refuse to enforce an unconscionable contract or sever
its problematic terms. (Ramirez, supra, 16 Cal.5th at p. 513.)
Although the trial court did not engage in an extensive
discussion of why it refused to enforce the parties’ arbitration
agreement, it found that it could not cure the agreement’s central
unconscionability—i.e., its overbroad scope—“without rewriting
the agreement.” As we explain, the court was correct in
determining that the agreement’s unconscionability cannot be
cured without reforming or rewriting its terms. We also explain
why the agreement is tainted with illegality and for that
additional reason, the court did not abuse its discretion in
refusing to enforce it. (See D’Amico v. Board of Medical
Examiners (1974) 11 Cal.3d 1, 18–19 [we review the trial court’s
ruling, not its reasoning].)
Although there is no bright-line rule rendering an
arbitration agreement unenforceable based on the sheer number
of its unconscionable terms, the greater the number of
21
unconscionable provisions, “the less likely it is that severance will
be the appropriate remedy.” (Ramirez, supra, 16 Cal.5th at
p. 517.) Here, we have determined that the agreement, when
read together with the confidentiality agreement, includes at
least five substantively unconscionable provisions, a considerable
number. In addition, one of the central mechanisms of the
arbitration agreement is riddled with overreach and unfairness—
i.e., the requirement that Bennett arbitrate all present and
future claims she may have against not just Global, but a broadly
defined group of third party beneficiaries, regardless of whether
any of those claims have anything to do with her employment or
arise well after her employment ends, and without any reciprocal
requirement that would force those third party beneficiaries to
submit to arbitration any claims they may have against Bennett,
whether related to her employment or not. Because
unconscionability permeates the arbitration agreement, the trial
court correctly refused to enforce it. (Ramirez, supra, 16 Cal.5th
at p. 516.)
Even if the arbitration agreement were not tainted with
illegality, its unconscionability cannot be severed or limited
without rewriting the agreement’s terms. To be sure, the
problematic portions of the confidentiality agreement—the
injunctive relief and nonsolicitation provisions—could be severed
without fundamentally altering the arbitration agreement. But
the same cannot be said for the unconscionable provisions
contained in the arbitration agreement itself.
For instance, Global asserts that we can strike from the
agreement the phrases “and that those differences may or may
not be related to [Bennett’s] employment” and “whether or not
those claims or controversies arise out of [Bennett’s]
22
employment” to ensure the agreement applies only to claims
relating to, or arising out of, Bennett’s employment. We disagree.
Nothing in the agreement’s remaining language would limit its
scope only to employment-related claims. Rather, after removing
the language proposed by Global, the agreement would now state
that it applies to “all individual claims or controversies” involving
Global. That language, on its face, would still include any claims
involving Global, including those unrelated to Bennett’s
employment. To properly limit the scope of the agreement, we
would need to add language that requires the parties to arbitrate
only employment-related claims. As we already explained, courts
cannot rewrite contracts or add terms to them to remove their
unconscionable aspects. (Ramirez, supra, 16 Cal.5th at p. 516.)
In short, we conclude that the trial court did not abuse its
discretion when it found that the arbitration agreement’s central
unconscionability could not be severed and refused to enforce the
agreement.
6. Our unconscionability analysis is not preempted by the
FAA
Finally, the dissent argues that our use of the
unconscionability doctrine to invalidate the parties’ arbitration
agreement is preempted by the FAA. By refusing to enforce the
parties’ arbitration agreement, the dissent argues that our
decision and others like it, such as Cook, supra, 102 Cal.App.5th
312, display “an antipat