Prior to beginning his employment with Technology Credit Union (TCU) in 2020, Thomas Vo signed an employment arbitration agreement. Pursuant to the agreement, both parties agreed “to submit to mandatory binding arbitration any dispute, claim or controversy arising out of or relating to Employee’s employment with the Company.”

While employed with TCU, Vo contracted COVID-19 and developed long-term health issues, which persisted throughout his employment. Vo was eventually terminated and brought suit against TCU, alleging (1) harassment in violation of FEHA; (2) discrimination in violation of FEHA; (3) failure to accommodate in violation of FEHA; (4) failure to engage in the interactive process in violation of FEHA; (5) retaliation in violation of FEHA; (6) failure to prevent discrimination and retaliation in violation of FEHA; and (7) wrongful termination in violation of public policy.

TCU moved to compel arbitration pursuant to Code of Civil Procedure section 1281.21 and stay all proceedings. Vo opposed the motion to compel and argued the arbitration agreement was both procedurally and substantively unconscionable. The trial court, relying in part on Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52 Cal.App.5th 360 (Aixtron), found the arbitration agreement unconscionable due to the arbitrator’s inability to compel prehearing third party discovery.

The Court of Appeal reversed in the published case of Vo v. Technology Credit Union -H051619 (February 2025).

TCU contends that the discovery clause does not render the agreement substantively unconscionable when evaluated under the discovery factors established in the Supreme Court’s recent decision in Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478 (Ramirez).

The Court of Appeal on its own motion took judicial notice of the JAMS Comprehensive Arbitration Rules and Procedures, effective July 1, 2014 (JAMS Rules). (Evid. Code, § 459.) JAMS Rule 17 controls prehearing exchange of information.

Rule 17(b) allows each party to take one deposition of an opposing party or individual under the control of the opposing party. (Ibid.) Any issues regarding the time, location, and duration of the deposition must be determined by the arbitrator. (Ibid.) It then states: “[t]he necessity of additional depositions shall be determined by the [a]rbitrator based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing [p]arties and the witness.” (Ibid.)

Rule 17(d) gives the arbitrator the authority to decide all “dispute[s] . . . regarding discovery issues.” (Ibid.) The arbitrator may appoint a special master to help resolve a discovery dispute. (Ibid.)

Vo contends that the discovery provision renders the agreement substantively unconscionable because: (1) the agreement covers witness intensive employment claims, (2) the discovery terms completely bar third party discovery by excluding reference to the CAA and thereby eliminate an arbitrator’s authority to order prehearing third party discovery under Aixtron, (3) third party discovery is available in conventional litigation, (4) the bar on third party discovery advantages employers as plaintiffs cannot obtain information from relevant witnesses who work for the employer and other third party entities, and (5) an arbitrator has no authority to order additional discovery due to Aixtron. He also maintains that the JAMS Rules cannot allow for third party discovery because third parties do not contractually consent to such terms.

The Court of Appeal disagreed with Vo and the trial court and noted that “This language could have been more precise but does not limit expanded discovery to parties to the arbitration agreement or those under their control and does not preclude an arbitrator from making nonparty discovery available to the parties.” And it went on to say “the Supreme Court recently clarified that we should not construe discovery provisions defining the scope of an arbitrator’s authority “in . . . a limited way” and instead should select an interpretation that renders an agreement valid. (Ramirez, supra, 16 Cal.5th at pp. 506-507.) We thus disapprove of Aixtron to the extent it interpreted the scope of an arbitrator’s authority narrowly.

The Court of Appeal concluded that the agreement allows Vo access to third party discovery that may be necessary to adequately arbitrate his FEHA claims. The trial court’s order denying Technology Credit Union’s motion to compel arbitration was reversed. The trial court was directed to enter a new order granting Technology Credit Union’s motion and staying the litigation pursuant to California Code of Civil Procedure, section 1281.4.

Motion to Arbitrate Needs Review of Arbitrator’s Discovery Rules