Sheena Taylor v. Starbucks Corporation

• Court: District Court, S.D. California
• Decided: March 10, 2026
• Docket: 3:24-cv-01511
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 SHEENA TAYLOR, Case No.: 3:24-cv-01511-RBM-MMP

12 Plaintiff, ORDER: 13 v. (1) GRANTING DEFENDANT’S 14 STARBUCKS CORPORATION, MOTION TO COMPEL 15 Defendant. ARBITRATION

16 (2) STAYING CASE PENDING 17 ARBITRATION

18 [Doc. 9] 19 20 21 Plaintiff Sheena Taylor (“Plaintiff”), proceeding pro se, brought this action against 22 Defendant Starbucks Corporation (“Defendant”) asserting claims for racial discrimination, 23 discrimination based on marital status, retaliation under Title VII, breach of employment 24 contract, wrongful termination, intentional infliction of emotional distress, defamation, and 25 invasion of privacy. (Doc. 1 (“Complaint”).) Defendant responded to the Complaint by 26 filing a Motion to Compel Arbitration (“Motion”) based on an arbitration agreement that 27 Plaintiff signed when she was hired by Defendant in September 2022. (Doc. 9.) Plaintiff 28 1 has filed an Opposition. (Doc. 11.) Defendant has filed a Reply (Doc. 12) and Plaintiff 2 filed an unauthorized Sur-Reply (Doc. 13.) 3 The Court finds the matter suitable for determination on the papers and without oral 4 argument pursuant to Civil Local Rule 7.1(d)(1). For the reasons set forth below, the 5 Motion is GRANTED. 6 I. BACKGROUND 7 A. Complaint 8 Plaintiff alleges that she “experienced racial discrimination throughout her 9 employment with [Defendant].” (Compl. ¶¶ 8, 14.1) She also asserts Defendant’s 10 “recruiter engaged in a pattern of discriminatory behavior, including: … [i]mproperly 11 sharing [Plaintiff’s] personal information with another employee; … [m]arginalizing 12 [Plaintiff] based on her single mother status; … [s]tereotyping [Plaintiff] by pressuring her 13 to connect with another Black manager during relocation, whom [Plaintiff] had never met; 14 [and] … [d]iscriminating against [Plaintiff] due to her unmarried status.” (Id. ¶ 9.) She 15 claims her employment offers were rescinded and she was terminated when she refused to 16 comply with the recruiter’s request that she “‘group up’ with the other Black manager” and 17 did “not conform[] to stereotypical expectations.” (Id. ¶¶ 10–11, 13.) 18 Plaintiff claims Defendant retaliated against her, including by pursing an invalid debt 19 related to relocation benefits and falsely claiming she declined a job offer. (Id. ¶¶ 15, 20– 20 22.) She also alleges Defendant’s retaliation became increasingly aggressive after she filed 21 with the United States Equal Employment Opportunity Commission (“EEOC”). (Id. ¶ 16.) 22 The Complaint references emails, phone messages, and text messages that Plaintiff asserts 23 contradict Defendant’s position and support Plaintiff’s claims. (Id. ¶¶ 20, 24–25.) Plaintiff 24 attaches right to sue letters from the EEOC and California Civil Rights Department to her 25 Complaint. (Doc. 1-2 at 3–5.) Plaintiff seeks compensatory damages of $5,000,000 for 26 27 1 The Court cites the paragraph numbers of the Complaint and the CM/ECF electronic 28 1 lost wages and benefits, emotional distress, mental anguish, and damage to professional 2 reputation; punitive damages of $200,000 for Defendant’s “malicious and reckless 3 conduct;” injunctive relief in the form of antidiscrimination policies and training; and 4 attorney’s fees and costs. (Compl. Prayer at 6–7.) 5 B. Arbitration Agreement 6 Defendant’s Motion details how Plaintiff set up and utilized Defendant’s online 7 application system to apply for jobs. (Doc. 9-1 at 7–9 (citing Decl. of Marangwanda 8 (“Marangwanda Decl.”) ¶¶ 3, 6–9)). Defendant also explains how, after receiving a job 9 offer, Plaintiff used the same online system to consent to electronically sign documents 10 and then electronically signed the Mutual Arbitration Agreement (“the Arbitration 11 Agreement”). (Doc. 9-1 at 9–10 (completed the Arbitration Agreement task in the system 12 by reading and then electronically signing it by entering last four digits of social security 13 number) (citing Marangwanda Decl. ¶¶ 9–12).) Plaintiff signed the Arbitration Agreement 14 on September 12, 2022. (Id. ¶¶ 13–14, Exs. F–G.) 15 Under the heading “Mutual Agreement to Arbitrate,” the Arbitration Agreement 16 states that: 17 [Defendant] and [Plaintiff] agree to use binding individual arbitration to 18 resolve any ‘Covered Claims’ that arise between [Plaintiff] and [Defendant] 19 … . ‘Covered Claims’ are those brought under any statute, local ordinance, or common law relating to [Plaintiff’s] employment, including those concerning 20 any element of compensation, harassment, discrimination, retaliation, 21 recovery of bonus or relocation benefits, leaves of absence, accommodations, or termination of employment. 22

23 (Marangwanda Decl. ¶ 13, Ex. F [Doc. 9-3 at 32].) The Arbitration Agreement states 24 that it is “enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. Sections 25 1 et. seq.” (Id.) 26 /// 27 /// 28 /// 1 Defendant’s counsel contacted Plaintiff numerous times after Plaintiff filed this 2 action and requested she stipulate to arbitration pursuant to the terms of the Arbitration 3 Agreement Plaintff signed on September 12, 2022. (Decl. of Danielle Zobel (“Zobel 4 Decl.”) ¶ 3, Ex. A [Doc. 9-2].) Plaintiff did not respond. (Id.) 5 II. DISCUSSION 6 The Federal Arbitration Act (“FAA”) provides that a written provision in “any . . . 7 contract evidencing a transaction involving commerce to settle by arbitration a controversy 8 thereafter arising out of such contract or transaction …shall be valid, irrevocable, and 9 enforceable, save upon such grounds as exist at law or in equity for the revocation of any 10 contract or as otherwise provided in chapter 4.” 9 U.S.C. § 2. “The Arbitration Act 11 establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable 12 issues should be resolved in favor of arbitration, whether the problem at hand is the 13 construction of the contract language itself or an allegation of waiver, delay, or a like 14 defense to arbitrability.” Chiron Corp. v. Ortho Diagnostic Sys. Inc., 207 F.3d 1126, 1131 15 (9th Cir. 2000) (quoting Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 16 1, 24–25 (1983)). Any party bound to an arbitration agreement that falls within the scope 17 of the FAA may bring a motion to compel arbitration. 9 U.S.C. § 4 (party aggrieved by 18 refusal of another to arbitrate “may petition any United States district court … for an order 19 directing that such arbitration proceed in the manner provided for in such agreement.”); 20 see also 9 U.S.C. § 3 (stay of case until arbitration is completed)). 21 The FAA mandates that “district courts shall direct the parties to proceed to 22 arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter 23 Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original). The Court must 24 consider “(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the 25 agreement encompasses the dispute at issue.” Kilgore v. KeyBank, Nat’l Ass’n, 718 F.3d 26 1052, 1058 (9th Cir. 2013) (en banc) (citation omitted); see also 9 U.S.C. § 2. 27 /// 28 /// 1 A. A Valid Arbitration Agreement Exists 2 The Arbitration Agreement Plaintiff signed on September 12, 2022, as part of her 3 onboarding, is a valid arbitration agreement between Plaintiff and Defendant. As detailed 4 above (see Section I.B), Plaintiff entered into the Arbitration Agreement after she accepted 5 a position and electronically signed the Arbitration Agreement. See Chamber of Com. of 6 the United States of Am. v. Bonta, 62 F.4th 473, 488 (9th Cir. 2023) (“It has long been 7 established that parties to a contract are generally deemed to have consented to all the terms 8 of a contract they sign, even if they have not read it.”). 9 Here, the Arbitration Agreement is valid because, as discussed further below, 10 Plaintiff agreed to arbitrate any disputes with Defendant related to her employment and the 11 Arbitration Agreement encompasses the claims Plaintiff raises in this case. Plaintiff does 12 not suggest she did not sign the Arbitration Agreement, rather she challenges its 13 presentation to her and its terms as unconscionable. However, the Arbitration Agreement 14 is not unconscionable. Additionally, Plaintiff’s EEOC letter does not preclude Defendant’s 15 enforcement of the Arbitration Agreement, and Defendant did not waive its right to enforce 16 the Arbitration Agreement by offering her a settlement before she filed this case. 17 1. The Arbitration Agreement is Not Unconscionable 18 “Under California law, the party opposing arbitration bears the burden of proving 19 any defense, such as unconscionability.” Bielski v. Coinbase, Inc., 87 F.4th 1003, 1013 20 (9th Cir. 2023) (citations omitted). “For a court to refuse to enforce a provision due to 21 unconscionability, a party must show the provision has elements of both procedural and 22 substantive unconscionability.” Id. (citations omitted). Courts analyze unconscionability 23 on a sliding scale: “the more substantively oppressive the contract term, the less evidence 24 of procedural unconscionability is required ... and vice versa.” Id. 25 “[P]rocedural unconscionability addresses contract negotiation and formation and 26 focuses on ‘oppression or surprise due to unequal bargaining power.’” Id. (quoting 27 Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 247 28 (2012)). “A court may find oppression where unequal bargaining power ‘results in no real 1 negotiation and an absence of meaningful choice’ and surprise where ‘the challenged term 2 is hidden in a prolix printed form or is otherwise beyond the reasonable expectation of the 3 weaker party.’” Id. (quoting Grand Prospect Partners v. Ross Dress for Less, Inc., 232 4 Cal. App. 4th 1332, 1347 (2015) and Morris v. Redwood Empire Bancorp, 128 Cal. App. 5 4th 1305, 1321 (2005)). 6 The Court is not persuaded there was any surprise in the Arbitration Agreement. 7 Plaintiff reviewed and signed the Arbitration Agreement as part of her onboarding process 8 with Defendant and while she argues the Arbitration Agreement was buried amongst other 9 documents (Doc. 11 at 2, 4–5), the Court is not persuaded that the inclusion of the 10 Arbitration Agreement amongst other employment documents invalidates it, particularly 11 given Plaintiff consented to signing documents electronically, and signed it by entering a 12 portion of her social security number. (Marangwanda Decl. ¶¶ 11–13.) Additionally, the 13 Arbitration Agreement was its own task in the online system (Marangwanda Decl. ¶¶ 12– 14 13) and it is a separate document, with a heading in all caps and bold letters identifying it 15 as an arbitration agreement (id. ¶ 13, Ex. F [Doc. 9-3 at 32]). The Arbitration Agreement 16 is just over two pages and written in clear and concise language that explicitly states in 17 bold that she and Defendant are waiving “the right to trial before a judge or jury in federal 18 or state court.” (Id.) While there may be some procedural unconscionability because the 19 Arbitration Agreement was a precondition for employment, that alone is not sufficient to 20 find the Arbitration Agreement invalid. Poublon v. C.H. Robinson Co., 846 F.3d 1251, 21 1260–61 (9th Cir. 2017) (if employee must sign a non-negotiable employment agreement 22 as a condition of employment but “there is no other indication of oppression or surprise” 23 then “the agreement will be enforceable unless the degree of substantive unconscionability 24 is high.”); see Bielski, 87 F.4th at 1013 (“For a court to refuse to enforce a provision due 25 to unconscionability, a party must show the provision has elements of both procedural and 26 substantive unconscionability.”) (emphasis added). 27 “Courts in California have used various standards for determining when an 28 agreement is substantively unconscionable such as where the agreement is ‘overly harsh,’ 1 ‘unduly oppressive,’ ‘unreasonably favorable,’ or ‘shock[s] the conscience.’” Keebaugh 2 v. Warner Bros. Ent. Inc., 100 F.4th 1005, 1022 (9th Cir. 2024) (quoting Sanchez v. 3 Valencia Holding Co., LLC, 61 Cal.4th 899, 910–11 (2015)). “Unconscionability ‘is 4 concerned not with a simple old-fashioned bad bargain, but with terms that are 5 unreasonably favorable to the more powerful party.’” Id. (quoting Sanchez, 61 Cal. 4th at 6 911). 7 None of the terms of the Arbitration Agreement fall into these categories or could 8 be considered unreasonably favorable to Defendant. The Arbitration Agreement provides 9 for a neutral arbitrator that issues a written arbitration award, adequate discovery, the same 10 remedies available in court, and provides that any filing fee will not exceed what would be 11 required in court up to a maximum of $225. (Marangwanda Decl. ¶ 13, Ex. F [Doc. 9-3 at 12 32–33]); see Armendariz v. Foundation Health Psychcare Servs., Inc. 24 Cal. 4th 83, 102– 13 114 (Cal. 2000) (explaining lawful arbitration agreements: (1) provide for a neutral 14 arbitrator; (2) provide for adequate discovery; (3) require a written arbitration award; (4) 15 provide for the same remedies available to the employee in court; and (5) do not require 16 the employee to bear more expense than they would to proceed in court). First, there is 17 nothing in the Arbitration Agreement that would limit Plaintiff’s ability to pursue her 18 claims in arbitration. The Arbitration Agreement provides for reasonable discovery, 19 including expansion of it by the arbitrator if needed. (Marangwanda Decl. ¶ 13, Ex. F 20 [Doc. 9-3 at 33].) Additionally, while the “Covered Claims” are largely the types of claims 21 an employee would bring against an employer, the Arbitration Agreement is mutual with 22 the waiver of the right to trial applicable to both parties. (Id. ¶ 13, Ex. F [Doc. 9-3 at 32] 23 (“[B]oth Starbucks and I waive the right to a trial before a judge or jury in federal or state 24 court.”).) Finally, the Court is not persuaded by Plaintiff’s unsupported assertion that 25 “[t]he arbitrator selection process unfairly favors [Defendant] as a repeat player in the 26 arbitration system.” (Doc. 11 at 6.) Plaintiff has not shown the Arbitration Agreement is 27 substantively unconscionable. 28 /// 1 Because there is only minimal procedural unconscionability based on the Arbitration 2 Agreement being a precondition for employment and no substantive unconscionability has 3 been shown, the Court finds the Arbitration Agreement is not unconscionable. 4 2. Arbitration is Not Precluded by Waiver or EEOC Letter 5 “[T]he test for waiver of the right to compel arbitration consists of two elements: (1) 6 knowledge of an existing right to compel arbitration; and (2) intentional acts inconsistent 7 with that existing right.” Hill v. Xerox Bus. Servs., LLC, 59 F.4th 457, 468 (9th Cir. 2023) 8 (explaining a third element, prejudice to the person opposing arbitration from the 9 inconsistent acts, was eliminated by Morgan v. Sundance, 596 U.S. 411 (2022)). Because 10 Defendant does not suggest it was unaware of its right to arbitration, the only issue is if 11 Defendant engaged in intentional acts inconsistent with its right to compel arbitration. Id. 12 Defendant did not. “‘There is no concrete test to determine whether a party has engaged 13 in acts inconsistent with its right to arbitrate; rather, [courts] consider the totality of the 14 parties’ actions.’” Id. at 471 (quoting Newirth by & through Newirth v. Aegis Senior 15 Communities, LLC, 931 F.3d 935, 941 (2019)). 16 Plaintiff argues Defendant waived the right to arbitrate when, prior to this litgation, 17 it offered her a settlement that failed to sufficiently address the harm she suffered. (Doc. 18 11 at 7–8.) She asserts Defendant could have “invoke[d] arbitration during those 19 discussions but strategically chose not to do so.” (Id. at 7.) However, offering a pre- 20 litigation settlement of Plaintiff’s complaints to Defendant is not inconsistent with 21 Defendant’s right to arbitrate. The Ninth Circuit has found “this element satisfied when a 22 party chooses to delay [its] right to compel arbitration by actively litigating [its] case to 23 take advantage of being in federal court.” Hill, 59 F.4th at 471 (quoting Martin v. Yasuda, 24 829 F.3d 1118, 1125 (9th Cir. 2016) (summarizing cases finding waiver, including 25 answering and moving to dismiss without asserting right to arbitration and conducting 26 discovery and litigating motions without asserting a right to arbitration). Defendant’s offer 27 of settlement prior to Plaintiff’s filing of this case was not inconsistent with Defendant’s 28 right to arbitrate and certainly was not done to take advantage of being in federal court 1 given this case had not even been filed. Defendant did not file a motion to dismiss or 2 answer without asserting a right to arbitrate or attempt to pursue discovery or litigate any 3 facet of the case other than its right to arbitration. Defendant’s first filing in this case was 4 the Motion seeking to enforce Defendant’s right to arbitration. 5 Plaintiff seems to assert in Opposition that her receipt of a right-to-sue letter 6 somehow negates the Arbitration Agreement she signed. (Doc. 11 at 9–10.) However, she 7 cites no authority for this proposition. In Reply, Defendant notes that while Defendant 8 could not compel the EEOC to arbitrate claims if the EEOC were bringing claims on 9 Plaintiff’s behalf, here the EEOC is not pursuing litigation on behalf of Plaintiff. (Doc. 12 10 at 10.) The Court finds Plaintiff’s EEOC right-to-sue letter does not invalidate the 11 Arbitration Agreement. 12 B. The Arbitration Agreement Encompasses Plaintiff’s Claims 13 Contrary to Plaintiff’s arguments in her Opposition (Doc. 11 at 2, 8–9), all of 14 Plaintiff’s claims are encompassed by the Arbitration Agreement. As noted above (see 15 section I.B), the Arbitration Agreement defines “Covered Claims” as those “brought under 16 any statute, local ordinance, or common law relating to [Plaintiff’s] employment.” 17 (Marangwanda Decl. ¶ 13, Ex. F [Doc. 9-3 at 32] (emphasis added).) Plaintiff’s 18 characterization of these claims as separate from her employment and outside the scope of 19 the Arbitration Agreement because some are based on conduct that followed her 20 termination or “involve third parties” is inaccurate. All of the conduct Plaintiff alleges 21 Defendant engaged in as a basis for her claims was related to her employment because it 22 was part of employing or relocating her for the position she accepted or followed directly 23 from that employment-related conduct, i.e. disputes over relocation expenses or whether 24 she later declined a job offer. To the extent that there could be any question these claims 25 are related to her employment, the list of “Covered Claims” in the Arbitration Agreement, 26 including particularly “retaliation [and] recovery of bonus or relocation benefits” makes 27 clear that all Plaintiff’s claims are covered by the Arbitration Agreement. (Id.) 28 /// I Hl. CONCLUSION 2 For the reasons set forth above, Defendant’s Motion to Compel Arbitration (Doc. 9) 3 |}is GRANTED. This case is STAYED pending conclusion of arbitration pursuant to the 4 ||terms of the Arbitration Agreement. Within 14 days of the completion of arbitration 5 || proceedings, the parties shall jointly submit a report advising the Court of the outcome of 6 || the arbitration and request to dismiss the case or vacate the stay. 7 IT IS SO ORDERED. 8 || Dated: March 10, 2026 Fe Le ; ? L é > ? HON. RUTH BERMUDEZ MONTENEGRO 10 UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10