Baxter v. Genworth N. Am. Corp.

which confirmed her receipt and review of certain printed materials and included her agreement to arbitrate any disputes arising out of her employment. Baxter agreed to resolve employment related disputes according to guidelines set forth in Genworth's alternative dispute resolution program known as the Resolve Employee Issue Resolution Program (Resolve).

The Resolve program sets forth four stages, or "levels," for pursuing dispute resolution. The Resolve program begins with an employer-controlled process before it reaches mediation or arbitration. An employee is required to submit his or her concern in writing to the Resolve administrator. At level one of Resolve, employees are required to discuss their concerns with their immediate manager and a human resources representative. If the concern cannot be resolved at level one, the employee may proceed to level two, which involves a meeting among the employee, a higher-level manager, and a human resources representative in an attempt to resolve the employee's concern. Attorneys are not permitted to participate in levels one and two of Resolve. If the dispute is not resolved at level two, the employee may request mediation (level three) if the dispute arises out of a covered claim, such as claims relating to compensation, involuntary termination, or employment discrimination and harassment. An employee whose dispute is not resolved by mediation at level three may then pursue arbitration at level four.

Baxter alleges she continued to be promoted, get favorable performance evaluations, and receive salary increases during her tenure at Genworth. At some point in 2011, Baxter's role was expanded to include supervisory responsibilities. Baxter alleges she expressed concern about employee evaluation forms that included race, age, and gender coding. Baxter, an African American woman, opposed and protested Genworth's evaluation protocol based upon her good faith belief that evaluating employees on the basis of age, race, and gender was discriminatory and unlawful. She claims she was admonished and subjected to ongoing harassment and retaliation as a result of her concerns about the evaluation protocol. In early 2013, Baxter requested and was granted a medical leave of absence under the California Family Rights Act (CFRA) in order to care for her mother. Baxter was scheduled to return to work in the middle of June 2013.

Housing Act (FEHA) ( Gov. Code, § 12900 et seq. ), retaliation in violation of the CFRA ( Gov. Code, § 12945.2 ), retaliation in violation of the FEHA, retaliation in violation of Labor Code section 1102.5, discrimination based upon race in violation of the FEHA, and wrongful termination. Baxter alleges she timely filed discrimination charges with the Department of Fair Employment and Housing (DFEH) and received a right to sue notice.

Genworth filed a motion to compel arbitration of Baxter's claims after Baxter refused to stipulate to arbitrate her claims pursuant to the Resolve program. AssetMark joined in Genworth's motion. Genworth argued that the arbitration agreement meets the minimum fairness requirements established by California law and that Baxter violated the agreement by filing suit. Baxter opposed the motion.

The trial court denied Genworth's motion to compel arbitration. The court reasoned that the arbitration agreement is both procedurally and substantively unconscionable. Because Baxter was required to sign the agreement as a condition of her continued employment, the court found substantial evidence of "modest procedural unconscionability." The court concluded that a number of features of the arbitration agreement were substantively unconscionable, including default discovery limitations, a prohibition against contacting witnesses, procedural deadlines that effectively shorten the statute of limitations and preclude a meaningful opportunity for a prelitigation FEHA investigation, and accelerated hearing procedures that infringe upon an employee's ability to adequately present his or her case. The court also ruled that severance of the offending provisions was not an option because the arbitration agreement is permeated by unconscionability.

that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.' [Citations.] In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa." ( Armendariz , supra , 24 Cal.4th at p. 114, 99 Cal.Rptr.2d 745 , 6 P.3d 669 .)

In Armendariz , our Supreme Court set forth five minimum requirements that must be met in the employer-employee context to ensure that a mandatory arbitration agreement does not curtail an employee's public rights

Flores v. Transamerica HomeFirst, Inc. (2001) 93 Cal.App.4th 846 , 853, 113 Cal.Rptr.2d 376 .)

coworker relating to a discrimination or harassment claim, as long as the employee or other person conducting an informal investigation does not seek the employer's proprietary documents or information that is confidential, privileged, or otherwise protected from disclosure. Consequently, we do not agree that the Resolve prohibition against communicating with employees is simply consistent with limitations on informal discovery that apply in all cases.

Genworth fails to identify any law or legal principle that forbids an employee from answering a coworker's inquiry about a harassment or discrimination claim. It also fails to cite to any case law supporting the proposition that such a prohibition is valid under California law. We conclude that the prohibition against communicating with other employees is unfairly one-sided and therefore a substantively unconscionable provision.

the outcome will depend upon several percipient witnesses, at least six of whom are identified by name

offer any showing that the default levels of discovery would be inadequate. ( Sanchez , at p. 405, 168 Cal.Rptr.3d 473 .) And, although the court in Mercuro conceded the employee's concern over the discovery provisions was not unreasonable, it was not prepared to say he was prevented from vindicating his statutory rights "without evidence" of how the provisions might be applied in practice. ( Mercuro , at p. 183, 116 Cal.Rptr.2d 671 .) Thus, it was not sufficient simply to claim that the discovery limitations were unconscionable in the abstract. It was necessary to make a factual showing that the discovery limitations would as a practical matter thwart the employee's ability to prove his or her particular claims.

Here, unlike in Sanchez and Mercuro , Baxter set forth facts tending to show that the default levels of discovery would be inadequate to vindicate her statutory rights. (See Ontiveros v. DHL Express (USA), Inc. (2008) 164 Cal.App.4th 494 , 513, 79 Cal.Rptr.3d 471 [employee estimated need to take at least 15 to 20 depositions but agreement limited employee to one deposition and placed "quite high" burden for additional discovery].) She estimated she would need to depose an estimated six to ten witnesses, six of whom are already identified in her complaint. Further, she predicted she would need to depose persons Genworth would designate as most knowledgeable on a variety of topics depending upon the defenses Genworth may assert. As far as we are aware, Genworth did not dispute these estimates of the number of depositions required.

In addition, while the "good and sufficient cause" standard for additional discovery in the Resolve guidelines is not as onerous as a "compelling need" standard in Fitz , it still presents a more stringent standard than a simple "showing of need," a standard the court concluded did not impose an unreasonable limitation on the arbitrator's authority to increase discovery in Dotson v. Amgen, Inc. , supra , 181 Cal.App.4th at pages 978 and 984, 104 Cal.Rptr.3d 341 . Moreover, the "good and sufficient cause" standard is vague. (Italics added.) Presumably, it is not enough merely to show "good cause" for additional discovery. Otherwise, the term "sufficient" would be rendered meaningless. In applying the Resolve guidelines and assessing whether a "sufficient" showing has been made to justify additional discovery, an arbitrator might expect a showing beyond simple "good cause," particularly if the employee seeks discovery well beyond the default limitations.

B. Statute of limitations

A FEHA administrative claim must be filed within one year of the employer's discriminatory act, and a lawsuit alleging FEHA claims must be filed in court within one year of the date the DFEH, the administrative agency charged with investigating the claim, issues a "right-to-sue" letter. ( Gov. Code, §§ 12960, subd. (d), 12965, subd. (b).) Factoring in the time required for the DFEH to investigate and respond to the claim, as a practical matter the outside limit to sue under the FEHA may be as long as three years. ( Ellis v. U.S. Security Associates (2014) 224 Cal.App.4th 1213 , 1225, 169 Cal.Rptr.3d 752 ( Ellis ).)

The Resolve program requires an employee to initiate a claim within the "applicable statute[ ] of limitations." In the case of claim that requires the filing of a charge with an administrative agency before a court action may be instituted, the Resolve guidelines define the "applicable statute of limitations" as the administrative agency filing deadline. Thus, the "applicable statute of limitations" for a FEHA claim under the Resolve guidelines is one year, which is the limitations period for filing a FEHA administrative claim. ( Gov. Code, § 12960, subd. (d).)

After a claim is initiated at level one of Resolve, an employee must meet certain deadlines before the claim may proceed to the next level. A level two

violated the public policy embodied in Government Code section 12920, which establishes the statutory time period the Legislature has impliedly determined will allow for an aggrieved party to vindicate his or her statutory rights. ( Ellis , at p. 1225, 169 Cal.Rptr.3d 752 .)

Genworth contends Resolve does not shorten the statute of limitations. We disagree. The practical effect of the Resolve guidelines is to shorten the period that would otherwise apply to file an action in court. Whereas an aggrieved party would ordinarily have up to three years to file a FEHA action in court (depending upon how quickly the prerequisite administrative claim is handled), under Resolve an aggrieved party has only one year to initiate a complaint. Moreover, an employee must submit to arbitration under the Resolve guidelines within 30 days of Genworth's written notice regarding the outcome of mediation even if a FEHA investigation has not yet been concluded or if the statute of limitations to file a FEHA lawsuit has not yet run. Indeed, given the fast pace at which a claim progresses through the various levels of Resolve, it is conceivable that an employee who promptly

C. Administrative remedies under the FEHA

The trial court concluded that the Resolve program limits an employee's right to pursue administrative remedies under the FEHA as a practical consequence of the 30-day deadline for seeking arbitration at level four after a mediation is unsuccessful at level three. A right-to-sue letter is a prerequisite to pursuing statutory FEHA claims, which are subject to dismissal unless an employee has exhausted administrative remedies and secured

employer, provisions in Resolve that have the effect of dispensing with that process before a statutory FEHA claim must be arbitrated establish at least a moderate degree of substantive unconscionability.

D. Default timelines for concluding arbitration

The Resolve guidelines specify that the arbitration must commence within 120 calendar days after an arbitrator is appointed unless "good cause" is shown for an extension or the parties otherwise agree to a later commencement. The arbitrator "shall seek to limit the length of the arbitration hearing to two 8-hour days (16 hours total); provided, however, that the arbitration shall have the authority to extend the length of a hearing as necessary."

The trial court concluded these timelines for commencing and completing an arbitration are unconscionable. It reasoned that the time pressure created by the 120-day timeline is exacerbated by timelines for disclosing witnesses, completing discovery requests, and completing the arbitration itself in under 16 hours. The court concluded that "[f]ew successful employment litigation attorneys will be in a position to suddenly put their practice on hold so as to accommodate this 'rocket docket' hearing procedure." Further, the court found it was unfair to place the burden on the employee to show good cause for extending the timelines.

There is nothing inherently unconscionable about setting a time limit by which an arbitration hearing must be held or limiting the length of such a hearing. Indeed, the very purpose of arbitration is to streamline the proceedings and obtain an expeditious resolution of disputes. (See Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696 , 704, 111 Cal.Rptr.3d 876 .) The timelines set by the Resolve guidelines for concluding an arbitration, while short, are not per se unconscionable.

Nevertheless, we tend to agree with the trial court's assessment that the Resolve arbitration timelines would prove to be unreasonably short in a more complex employment dispute such as this one. But we part ways with the

dispute resolution process. Second, she argues that a $50 initiation fee is substantively unconscionable. As we explain, these concerns are unfounded.

As support for her claim that Resolve gives Genworth an unfair preview of her evidence, Baxter relies upon Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267 , 16 Cal.Rptr.3d 296 , and Pokorny v. Quixtar, Inc. (9th Cir. 2010) 601 F.3d 987 . In those cases, the arbitration agreement did not provide for a mediation conducted by a neutral third party mediator as a condition precedent to arbitration but, instead, required mediation to be conducted through the employer's internal processes. ( Nyulassy v. Lockheed Martin Corp. , at p. 1282, 16 Cal.Rptr.3d 296 ; Pokorny v. Quixtar, Inc. , at p. 999.) In addition, in both cases the obligation to pursue informal dispute procedures was not mutual but applied to the employee only. ( Ibid. ) Here, by contrast, the requirement to pursue informal dispute resolution procedures is mutual and applies to Genworth as well as its employees. Further, the Resolve guidelines expressly provide for a neutral third party mediator who is mutually selected by both parties. Consequently, the cases relied upon by Baxter do not support her unconscionability claim.

Baxter argues that the $50 initiation fee is an unfair charge for the privilege of bringing a complaint and constitutes a cost the employee would

Resolve program that it found unconscionable. We disagree.

In Armendariz , the Supreme Court concluded the arbitration agreement at issue there could not be enforced because it was "permeated by an unlawful purpose" and could not be saved by merely removing or restricting its unconscionable provisions. ( Armendariz , supra , 24 Cal.4th at pp. 124-125, 99 Cal.Rptr.2d 745 , 6 P.3d 669 .) Here, as in Armendariz , two factors weigh against severance.

"First, the arbitration agreement contains more than one unlawful provision .... Such multiple defects indicate a systematic effort to impose

Plaintiff Maya Baxter sued her former employer, defendant Genworth North America Corporation (Genworth), for wrongful termination and related causes of action arising out of her employment. Genworth moved to compel arbitration of the dispute. On appeal from an order denying its motion to compel arbitration, Genworth contends the trial court erred in concluding the arbitration agreement is unconscionable and in refusing to sever any provisions the court considered to be unconscionable. Because we conclude the arbitration agreement is procedurally and substantively unconscionable, we shall affirm the trial court's order.

FACTUAL AND PROCEDURAL HISTORY

Baxter began working for defendant AssetMark Investment Services, Inc. (AssetMark) in February 2001. Genworth acquired AssetMark in August 2006. As AssetMark transitioned to Genworth, Baxter became an employee of Genworth. As a condition of her continued employment, Genworth required Baxter to sign a "Conditions of Employment Acknowledgment" form. Baxter signed the acknowledgment,

Genworth timely appealed the order denying its motion to compel arbitration.

DISCUSSION

Arbitration agreements are "valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract." ( Code Civ. Proc., § 1281.) "California law, like federal law, favors enforcement of valid arbitration agreements." ( Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 , 97, 99 Cal.Rptr.2d 745 , 6 P.3d 669 ( Armendariz ).) Nevertheless, courts may invalidate an arbitration agreement if it contains provisions that are unconscionable or contrary to public policy. ( Id. at pp. 113-114, 99 Cal.Rptr.2d 745 , 6 P.3d 669 ; accord, Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702 , 711, 13 Cal.Rptr.3d 88 ( Fitz ).)

Unconscionability " ' "refers to ' "an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party." ' [Citation.] As that formulation implicitly recognizes, the doctrine of unconscionability has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results." ' " ( Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237 , 1243, 200 Cal.Rptr.3d 7 , 367 P.3d 6 ( Baltazar ).)

Both procedural and substantive unconscionability must be present for a court to refuse to enforce a contract, although they need not be present in the same degree. ( Baltazar , supra , 62 Cal.4th at p. 1243, 200 Cal.Rptr.3d 7 , 367 P.3d 6 .) " 'Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation,

"Unconscionability analysis begins with an inquiry into whether the contract is one of adhesion. [Citation.] '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.' " ( Armendariz , supra , 24 Cal.4th at p. 113, 99 Cal.Rptr.2d 745 , 6 P.3d 669 .) "[I]n the case of preemployment arbitration contracts, the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement." ( Id. at p. 115, 99 Cal.Rptr.2d 745 , 6 P.3d 669 .) "A finding of a contract of adhesion is essentially a finding of procedural unconscionability." ( Flores v. Transamerica HomeFirst, Inc. , supra , 93 Cal.App.4th at p. 853, 113 Cal.Rptr.2d 376 .)

Here, Baxter had no opportunity to negotiate the terms of the Resolve program. Nor did she have any meaningful choice in the matter. She could either quit her job of over five years or agree to the arbitration terms that were a condition of her continued employment. The Resolve program was presented in a take-it or leave-it manner. Baxter lacked equal bargaining power. These facts present a "high degree of oppressiveness" supporting a finding of procedural unconscionability. (See Fitz , supra , 118 Cal.App.4th at p. 722, 13 Cal.Rptr.3d 88 .)

Genworth nonetheless contends the arbitration agreement is not procedurally unconscionable. The argument is unpersuasive. It claims numerous California decisions have held that arbitration agreements are not rendered unenforceable simply because they are offered on a take-it or leave-it basis to an employee. To support its argument, Genworth cites cases in which adhesive arbitration agreements were enforced because they were not substantively unconscionable. (See, e.g., Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064 , 1075-1076, 130 Cal.Rptr.2d 892 , 63 P.3d 979 [adhesive arbitration agreement enforceable because substantively unconscionable provision could be severed].) The cases relied upon by Genworth are not at odds with the general rule that the existence of contract of adhesion supports a finding of procedural conscionability. Rather, the cases simply apply the principle that a court may not refuse to enforce an arbitration agreement unless it is both procedurally and substantively unconscionable. (See Baltazar , supra , 62 Cal.4th at p. 1243, 200 Cal.Rptr.3d 7 , 367 P.3d 6 .)

Genworth also purports to rely upon the United States Supreme Court's decision in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 , 131 S.Ct. 1740 , 179 L.Ed.2d 742 for the proposition that procedural unconscionability is not established simply because a party has no choice but to accept a non-negotiable arbitration agreement. We do not agree with

Genworth's characterization of Concepcion . In that case, the court held that federal law preempted California's rule against waiver of class action remedies in consumer arbitration agreements. ( Id. at pp. 339-352, 131 S.Ct. 1740 .) The Concepcion decision mentions adhesion contracts, but not in the context of procedural unconscionability. The court acknowledged that California's rule against class action waivers was limited to adhesion contracts but then observed that the limitation was meaningless because "the times in which consumer contracts were anything other than adhesive are long

by someone else on behalf of another employee concerning another employee's claim, shall not respond to such questioning or provide information or documents to such individual but should direct the inquiring individual to the Company counsel so that information may be provided through the discovery process." No such prohibition on contacting other employees to discuss a complaining employee's claim applies to Genworth. Indeed, in the section of the Resolve guidelines concerning mediation confidentiality, the guidelines clarify that nothing "shall restrict the Company's ability ... to interview witnesses and gather information to evaluate the employee's claims."

The trial court concluded that this one-sided prohibition against communicating with coemployees is "grossly unfair to the employee and has serious public policy implications." The court noted that a complaining employee who was prohibited from contacting coemployees would be left to gamble as to which potential witnesses to depose within the limits set by the arbitration agreement, whereas the employer would have unfettered access to its employees and could cherry pick the witnesses it might choose to depose.

Genworth complains the trial court took the prohibition out of context. It claims that the provision, when read in context,

limited discovery allowed under the arbitration agreement. Because the same prohibition does not apply to Genworth, the arbitration agreement is unfairly one-sided.

The prohibition also raises public policy concerns because it effectively threatens employees who choose to voluntarily cooperate with an employee who complains about unlawful discrimination. Under both federal and California law, an employer may not discriminate against an employee who testifies on behalf of another employee or who otherwise assists the complaining employee in connection with a complaint of unlawful discrimination. (See Gov. Code, § 12940, subd. (h) ; 42 U.S.C. § 2000e-3, subd. (a).) The Resolve guidelines violate this public policy by forbidding employees from assisting each other with claims of discrimination except within the confines of the limited formal discovery allowed under the arbitration agreement.

Further, the prohibition against contacting other employees is not necessarily consistent with limitations the law already places on seeking self-help outside the formal discovery process, as Genworth claims. As support for its assertion, Genworth relies on a case that disapproves of any litigant or potential litigant who "converts, interdicts or otherwise purloins documents in the pursuit of litigation outside the legal process ...." ( Pillsbury, Madison & Sutro v. Schectman (1997) 55 Cal.App.4th 1279 , 1289, 64 Cal.Rptr.2d 698 , italics added.) The decision is limited in scope to a party's attempts to obtain another party's proprietary documents outside the formal discovery process. The court's analysis is premised upon the notion that taking or removing tangible property belonging to another party constitutes conversion and violates personal property rights, irrespective of whether the documents or other property might otherwise be subject to formal discovery. ( Id. at p. 1288, 64 Cal.Rptr.2d 698 .) This principle does not apply to information that may be sought from a

2. Default limitations on discovery

"Adequate discovery is indispensable for the vindication of statutory claims." ( Fitz , supra , 118 Cal.App.4th at p. 715, 13 Cal.Rptr.3d 88 .) " '[A]dequate' discovery does not mean unfettered discovery ...." ( Mercuro v. Superior Court (2002) 96 Cal.App.4th 167 , 184, 116 Cal.Rptr.2d 671 ( Mercuro ).) Although parties to an arbitration agreement may agree to limitations on discovery that is otherwise available under the Code of Civil Procedure, an arbitration agreement must nonetheless " 'ensure minimum standards of fairness' so employees can vindicate their public rights." ( Fitz , at p. 716, 13 Cal.Rptr.3d 88 .)

The Resolve guidelines set default limitations on discovery that may be conducted in preparation for arbitration. An employee is entitled to receive documents from his or her personnel and medical files. In addition, each party may submit up to ten interrogatories to another party (with each subpart counting as a separate interrogatory), propound five written requests for documents, and depose two individuals for a total of no more than eight hours. The Resolve guidelines give the arbitrator authority to increase the number of depositions, interrogatories, and requests for production "for good and sufficient cause shown" in order "to ensure that a party has a fair opportunity to present a case ...."

Genworth argues the trial court erred in concluding that these discovery provisions are unconscionable. According to Genworth, if the default discovery limits are inadequate in a particular case, the arbitrator has ample authority to expand discovery as necessary to ensure a fair arbitration. And it takes issue with the "speculation" that an arbitrator may deny adequate discovery in a particular case. Genworth cites the principle that the court must assume an arbitrator will act in a reasonable manner in conformity with the law. (See Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975 , 984, 104 Cal.Rptr.3d 341 .)

Employment disputes are factually complex, and their outcomes "are often determined by the testimony of multiple percipient witnesses, as well as written information about the disputed employment practice." ( Fitz , supra , 118 Cal.App.4th at p. 717, 13 Cal.Rptr.3d 88 .) Seemingly neutral limitations on discovery in employment disputes may be non-mutual in effect. " 'This is because the employer already has in its possession many of the documents relevant to an employment discrimination case as well as having in its employ many of the relevant witnesses.' " ( Id. at p. 716, 13 Cal.Rptr.3d 88 .)

In this factually complex case involving an employee who had a 12-year employment history at Genworth and AssetMark,

in the complaint. Relevant documents include those relating to family leave practices, evaluation policies, reorganization, prior complaints similar to Baxter's, communications concerning Baxter's discipline and termination, and Genworth's internal investigation, among others. The default limitations on discovery are almost certainly inadequate to permit Baxter to fairly pursue her claims.

In Fitz , supra , 118 Cal.App.4th 702 , 13 Cal.Rptr.3d 88 , the court held that similar discovery limits were unconscionable and violated the minimum requirements of Armendariz . The arbitration agreement in Fitz allowed two depositions in addition to expert depositions, with no time limit established for the length of the depositions. ( Id. at p. 709, 13 Cal.Rptr.3d 88 .) The agreement required an exchange of exhibits but did not otherwise expressly authorize written discovery demands. ( Ibid. ) "No other discovery [was] allowed unless the arbitrator [found] a compelling need to allow it. The policy require[d] the arbitrator to limit discovery as specified in the agreement unless the parties [could] demonstrate that a fair hearing would be impossible without additional discovery." ( Id. at p. 716, 13 Cal.Rptr.3d 88 .) In concluding that the arbitration agreement did not allow for adequate discovery, the Fitz court focused on the fact the agreement allowed for only two depositions of percipient witnesses, a number that would be sufficient only in an "unusual" employment dispute. ( Id. at p. 717, 13 Cal.Rptr.3d 88 .) Granting the arbitrator discretion to allow additional discovery was an "inadequate safety valve" in light of the "impossibility" standard that had to be met to justify more discovery. ( Ibid. ) According to the court, "the burden the [arbitration agreement] imposes on the requesting party is so high and the amount of discovery the [agreement] permits by right is so low that employees may find themselves in a position where not only are they unable to gain access to enough information to prove their claims, but are left with such scant discovery that they are unlikely to be able to demonstrate to the arbitrator a compelling need for more discovery." ( Id. at pp. 717-718, 13 Cal.Rptr.3d 88 fn. omitted.)

Genworth contends that discovery provisions substantially similar to those in the Resolve guidelines have been upheld. Genworth relies on Sanchez v. Carmax Auto Superstores California, LLC (2014) 224 Cal.App.4th 398 , 404-406, 168 Cal.Rptr.3d 473 ( Sanchez ), in which the court concluded that an arbitration agreement that limited discovery to three depositions and 20 interrogatories was not unconscionable as a matter of law. The agreement in Sanchez allowed for additional discovery upon a showing of " 'substantial need.' " ( Id. at p. 404, 168 Cal.Rptr.3d 473 .) The Sanchez court emphasized that the standard for additional discovery was lower than the " 'compelling' " need required to be shown in Fitz . ( Id. at p. 405, 168 Cal.Rptr.3d 473 .) Genworth also cites Mercuro , supra , 96 Cal.App.4th at page 184, 116 Cal.Rptr.2d 671 , in which the court was "unable to say" that an arbitration agreement that allowed three depositions and a total of 30

discovery requests was unconscionable. The agreement in Mercuro gave the arbitration discretion to allow additional discovery upon a showing of " 'good cause.' " ( Id. at p. 182, 116 Cal.Rptr.2d 671 .)

Sanchez and Mercuro are distinguishable. In those cases , the employees failed to establish as a factual matter that the discovery provisions were inadequate to vindicate their statutory rights. (See Sanchez , supra , 224 Cal.App.4th at pp. 404-405, 168 Cal.Rptr.3d 473 ; Mercuro , supra , 96 Cal.App.4th at p. 183, 116 Cal.Rptr.2d 671 .) In Sanchez , the employee failed to

claim must be submitted within 15 business days of the date of Genworth's written response at level one. A level three demand for mediation must be submitted within 30 calendar days of the date of Genworth's written response at level two. And a level four arbitration demand must be submitted within 30 calendar days of the date of Genworth's written response at level three.

While parties to an arbitration agreement may agree to shorten the applicable limitations period for bringing an action, a shortened limitations period must be reasonable. ( Ellis , supra , 224 Cal.App.4th at p. 1222, 169 Cal.Rptr.3d 752 .) " 'A contractual period of limitation is reasonable if the plaintiff has a sufficient opportunity to investigate and file an action, the time is not so short as to work a practical abrogation of the right of action, and the action is not barred before the loss or damage can be ascertained.' " ( Id. at p. 1223, 169 Cal.Rptr.3d 752 .) As we explain, shortening the limitations period to pursue relief for FEHA statutory claims under Resolve to one year-the time required to file an administrative FEHA claim-is unreasonable.

In Ellis , supra , 224 Cal.App.4th at page 1225, 169 Cal.Rptr.3d 752 , the Court of Appeal held that an arbitration agreement establishing a six-month limitations period for statutory FEHA claims was unconscionable. (Accord, Martinez v. Master Protection Corp. (2004) 118 Cal.App.4th 107 , 117-118, 12 Cal.Rptr.3d 663 .) The court pointed out that employment discrimination claims are already subject to shortened statutes of limitation. ( Ellis , at p. 1223, 169 Cal.Rptr.3d 752 .) Cutting the limitations period to six months "seriously truncates the time" to vindicate statutory rights under the FEHA, thus "drastically reducing the time to sue allowed by FEHA by as much as five-sixths." ( Id. at p. 1225, 169 Cal.Rptr.3d 752 .) According to the Ellis court, six months did not provide sufficient time to pursue legal remedies and

question about whether Resolve prevents an employee from seeking administrative remedies, the Resolve handbook states: "It is not necessary for an employee to have filed a charge of

employee will be able to pursue administrative remedies before an arbitration is conducted. Indeed, Resolve actually encourages the parties to defer an administrative investigation until after an arbitration is concluded.

Accordingly, while we agree with Genworth that Resolve does not preclude an employee from pursuing administrative remedies, we nonetheless conclude that Resolve may deprive an employee of his or her right to have an administrative investigation conducted before the employee is required to pursue statutory FEHA claims in an arbitration. Because the administrative claim process may be beneficial to the employee in pursuing claims against an

trial court on the question of whether the Resolve guidelines provide a sufficient safety valve to permit the arbitrator to extend the timelines as necessary. In addressing whether the arbitrator has sufficient discretion to extend timelines, both Baxter and the trial court rely upon Fitz , supra , 118 Cal.App.4th at page 717, 13 Cal.Rptr.3d 88 , in which the arbitrator's discretion to depart from default discovery limits was limited unless there was a "compelling need" for additional discovery and a fair hearing was "impossible" without such relief. Here, however, the arbitrator has discretion to extend the timelines merely upon a showing of good cause. Presuming, as we must, that the arbitrator will act reasonably in conformity with the law (see Dotson v. Amgen, Inc. , supra , 181 Cal.App.4th at p. 984, 104 Cal.Rptr.3d 341 ), we cannot say an arbitrator would feel compelled to deny a reasonable request to extend the Resolve arbitration timelines in a complex employment dispute. While the short default arbitration timelines give some cause for concern, we are not convinced they create more than a modest degree of unconscionability in light of the arbitrator's discretion to extend them.

E. Other concerns

Baxter raises two additional concerns about the Resolve program that the trial court did not rely upon in its ruling. First, Baxter complains that the Resolve program gives Genworth an unfair early look at her evidence by requiring her to participate in an informal, company-controlled

not have to incur in court, even though she seems to acknowledge the fee is less than the fee required to file an action in court. We note that Baxter did not raise this theory in the trial court and has consequently forfeited the issue on appeal. (See Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665 , 681, 108 Cal.Rptr.3d 171 , 229 P.3d 83 .) In any event, the claim fails on the merits. Employees may be required to pay the "usual costs" incurred during litigation. ( Armendariz , supra , 24 Cal.4th at pp. 110-111, 99 Cal.Rptr.2d 745 , 6 P.3d 669 .) Aside from the modest $50 initiation fee, an employee is not required to pay for any other costs associated with arbitration. Those costs, including administrative and filing fees, the arbitrator's fee, and charges incurred in renting a hearing room, are borne solely by Genworth. Further, the initiation fee is substantially lower than the "usual costs" Baxter would have to incur as filing fees if she pursued a civil action in state or federal court, and Baxter has made no claim that she cannot afford the fee. (See Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899 , 920-921, 190 Cal.Rptr.3d 812 , 353 P.3d 741 [filing fees not unconscionable absent showing that they are unaffordable or would have substantial deterrent effect].)

Even though we reject Baxter's claims that the Resolve guidelines impose an unconscionable initiation fee and unfairly give Genworth a preview of an employee's evidence, we nonetheless conclude the Resolve guidelines are unconscionable and therefore unenforceable. As a contract of adhesion that Baxter was forced to accept as a condition of her continued employment, Resolve is procedurally unconscionable. And, the provisions in Resolve that prohibit contacting other employees about a claim, restrict formal discovery, shorten limitations periods, and effectively limit an employee's right to seek administrative remedies before an arbitration is conducted provide more than ample grounds to support a conclusion that Resolve is substantively unconscionable.

IV. Severance

As a final matter, Genworth contends the trial court abused its discretion in declining to sever any provisions of the

arbitration on an employee not simply as an alternative to litigation, but as an inferior forum that works to the employer's advantage." ( Armendariz , supra , 24 Cal.4th at p. 124, 99 Cal.Rptr.2d 745 , 6 P.3d 669 .) The Resolve program contains more than one substantively unconscionable provision, including the prohibition against talking with coworkers about a claim, limits on discovery, and shortened limitations periods for pursuing a claim.

"Second, ... there is no single provision a court can strike or restrict in order to remove the unconscionable taint from the agreement." ( Armendariz , supra , 24 Cal.4th at pp. 124-125, 99 Cal.Rptr.2d 745 , 6 P.3d 669 .) In this case, it would not be sufficient simply to strike certain terms. The trial court would have had to rewrite the unconscionable provisions in order to ensure mutuality and fairness. The court lacked the power to do so. ( Id. at p. 125, 99 Cal.Rptr.2d 745 , 6 P.3d 669 [court lacks power to cure unconscionability through reformation by augmentation].) Accordingly, the court did not abuse its discretion in declining to sever the unconscionable provisions.

DISPOSITION

The order denying Genworth's motion to compel arbitration is affirmed. Respondent shall be entitled to recover its costs on appeal.

We concur:

Siggins, J.

Jenkins, J.