Lopes v. Oracle America, Inc.

Background

Cornelius Lopes sued Oracle America, Inc. and James Sharum. Lopes asserted claims under the National Labor Relations Act and claims for defamation, invasion of privacy, discrimination, whistleblower retaliation, and wrongful termination. The claims arose from events during Lopes’s employment at Oracle while Sharum supervised him.

Lopes participated in Oracle’s fiscal-year 2018 sales compensation plan. The plan included terms and conditions containing an arbitration clause. That clause required final and binding arbitration of existing or future disputes arising out of or related to Lopes’s employment or termination, including disputes arising under the plan. Lopes’s individual compensation agreement stated that he had read and agreed to the plan’s terms, including the arbitration agreement. Oracle presented evidence that Lopes electronically signed the plan on June 14, 2017.

Oracle and Sharum moved to compel arbitration. Oracle’s counsel had previously asked Lopes to arbitrate, but Lopes refused. Lopes did not oppose the motion.

Court’s Analysis

The court held that the Federal Arbitration Act applied because the arbitration clause was part of an employment-related compensation agreement. It found that Oracle provided sufficient evidence that Lopes digitally signed the plan and that Lopes did not dispute signing it. The court therefore found an agreement to arbitrate between Lopes and Oracle.

Although Sharum was not a signatory to the plan, the court held that he could enforce the arbitration clause because he was Oracle’s agent and Lopes’s manager.

The court applied California contract law to evaluate whether the arbitration agreement was enforceable. It found that the plan was a standardized adhesion contract and that the arbitration clause therefore involved some procedural unconscionability, meaning a possible unfairness in how the contract was presented or formed. But the court found that this procedural unconscionability was minimal. It also found no substantive unconscionability, meaning no unfairly one-sided contract terms serious enough to make the agreement unenforceable. The court concluded that the arbitration clause was valid and enforceable.

The court then found that the arbitration clause covered Lopes’s claims because they concerned incidents occurring during his employment at Oracle. The court noted that the merits of the claims and any defenses would be for the arbitrator to decide.

Disposition

The court GRANTED the defendants’ motion to compel arbitration. Because no claims remained outside arbitration, the court DISMISSED the entire action WITHOUT PREJUDICE to filing a later action to confirm or vacate the arbitration award. Judge Beth Labson Freeman signed the order.