Perez v. PeopleReady

Background

Elias Perez sued PeopleReady, Inc. and Global Fixture Services, Inc. on behalf of a proposed class of employees and under California’s Private Attorneys General Act. The complaint asserted California wage-and-hour claims involving meal and rest periods, unpaid wages and overtime, wage statements, final pay, expense reimbursement, unfair competition, and statutory penalties. Perez generally alleged that PeopleReady and Global Fixture were joint employers.

PeopleReady assigned Perez to work temporarily at Global Fixture. During his onboarding with PeopleReady on September 7, 2023, Perez signed an arbitration agreement covering his employment with PeopleReady, its parent company, and any customer for whom he performed work. Perez did not dispute that he signed the agreement or that the agreement covered his claims.

PeopleReady moved to compel arbitration and to stay the case, and Global Fixture joined the motion. The court vacated the scheduled hearing because the motion was suitable for decision on the written submissions.

Legal standard

The Federal Arbitration Act generally requires courts to enforce written arbitration agreements covering disputes involving commerce, subject to generally applicable contract defenses. The court applied California contract-formation principles to determine whether the agreement existed and used the summary-judgment standard when deciding the motion to compel arbitration. Perez, as the party opposing arbitration, had the burden of showing that the agreement was unconscionable—that is, unfairly one-sided or imposed through an unfair contracting process.

Under California law, procedural unconscionability concerns oppression or surprise caused by unequal bargaining power. Substantive unconscionability concerns terms that are overly harsh, unduly oppressive, or unreasonably favorable to the stronger party. Both forms generally must be present, although they are evaluated on a sliding scale.

Procedural unconscionability

Perez argued that the agreement was imposed as a condition of employment, that he signed it in a small room while a PeopleReady representative remained present, and that the JAMS Employment Arbitration Rules and Procedures were not physically attached.

The court noted that the agreement expressly stated that arbitration was voluntary, that signing was not a mandatory condition of employment, and that Perez would not face adverse employment action for refusing to sign. The court therefore found that the agreement was not adhesive in the way Perez claimed and that his belief that he would not be hired without signing did not establish procedural unconscionability.

The court recognized a factual dispute about the physical setting in which Perez reviewed and signed the onboarding documents. But it found that the dispute did not need to be resolved because Perez did not claim that anyone misrepresented the agreement, prevented him from reading it, denied him the opportunity to ask questions, or prevented him from taking additional time to review it. The court concluded that Perez had not shown the kind of oppressive conduct or sharp practices needed to establish procedural unconscionability.

The court also rejected the argument based on the missing hard copy of the JAMS rules. The agreement identified JAMS, supplied a direct internet address for the employment rules, and stated that human resources could provide a copy upon request. Perez presented no evidence that he had requested the rules or that his request had been refused. The court concluded that the absence of an attached copy did not make the agreement procedurally unconscionable.

Substantive unconscionability

Perez argued that the agreement was substantively unconscionable because its scope was too broad and because it lacked mutuality. He focused on language requiring arbitration of any claim or dispute between the parties, including claims relating to the agreement, his employment, his application for employment, termination, or any other matter. He also argued that the agreement allowed affiliated entities and other persons to enforce it against him without imposing equivalent obligations on them.

The court rejected the scope argument. It read the broad language in context and concluded that the agreement was limited to arbitrable claims and disputes arising from Perez’s employment, termination, or the arbitration agreement itself. The court found that the agreement did not require arbitration of every possible dispute between Perez and PeopleReady.

The court also rejected the mutuality argument. It found that the agreement stated that both Perez and the company could compel arbitration of covered employment-related disputes. The third-party-beneficiary language did not give PeopleReady or its affiliates a separate right to litigate in court or otherwise create a one-sided enforcement arrangement. The court concluded that the agreement contained the required degree of mutuality and was not substantively unconscionable.

Ruling and disposition

Judge Araceli Martinez-Olguin determined that the arbitration agreement was neither procedurally nor substantively unconscionable and therefore had to be enforced. The court granted Defendants’ motion to compel arbitration. Because the case involved an arbitrable dispute and Defendants requested a stay, the court also granted the motion to stay the proceedings pending arbitration.

The parties were ordered to file a joint status report on June 1, 2026, and every 90 days afterward concerning the status of the arbitration proceedings.