Opinion
H043409
10-17-2018
JULIE R. WEISS, Plaintiff and Appellant, v. VIDYO, INC., Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-15-CV-282007)
Appellant Julie R. Weiss appeals from a judgment denying her petition to vacate an arbitration award to respondent Vidyo, Inc. Finding no prejudicial, reviewable error, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
In June 2010, Vidyo and Weiss entered into a Consulting Agreement. Pursuant to that agreement, Weiss agreed to provide product marketing consulting services to Vidyo as an independent contractor. Section 12 of the Consulting Agreement, entitled "Arbitration," requires the parties to arbitrate "any dispute, difference, or disagreement" between them, subject to certain exceptions not at issue here, "in accordance with the then prevailing commercial rules of the American Arbitration Association . . . ."
On October 21, 2011, Weiss filed suit against Vidyo in San Mateo County Superior Court, alleging Vidyo had misclassified her as an independent contractor; failed to provide her with itemized wage statements in violation of Labor Code section 226 ; and failed to pay her earned wages immediately upon her termination in violation of sections 201 and 227.3, entitling her to waiting time penalties under section 203. Weiss further alleged that Vidyo's conduct—including misclassifying employees as independent contractors, requiring her to sign an illegal non-compete agreement, and violating the Labor Code—constituted unfair competition in violation of section 17200 of the Business and Professions Code (UCL). Vidyo removed the action to federal court based on diversity of citizenship and moved to compel arbitration and to stay or dismiss the action. Weiss responded that the arbitration agreement was procedurally and substantively unconscionable and, therefore, unenforceable. The federal district court granted Vidyo's motion to compel arbitration and dismissed Weiss's complaint with prejudice.
All further statutory citations are to the Labor Code unless otherwise indicated.
Weiss filed a second lawsuit in San Mateo County Superior Court against Vidyo on March 26, 2012. Vidyo successfully petitioned to stay that action pending arbitration. In September 2013, Weiss filed a demand for arbitration with the American Arbitration Association (AAA). Vidyo counterclaimed, alleging Weiss had breached the Consulting Agreement by attempting to litigate her claims.
A preliminary hearing was held by conference call on February 26, 2014 before Arbitrator Suzanne K. Nusbaum. In an order issued on March 3, 2014, the arbitrator ordered Weiss to submit a brief regarding her claim that "the Arbitrator does not have the power to determine arbitrability and that the arbitration agreement is unenforceable" by April 15, 2014. That deadline later was extended until May 2, 2014 and a merits hearing was set for late June of that year. Weiss failed to submit a brief by the May 2, 2014 deadline. On May 5, 2014, Weiss's attorney withdrew. On May 9, 2014, the arbitrator (1) gave Weiss until July 9, 2014 to submit an appearance by new counsel; (2) extended deadline on Weiss's brief on arbitrability to July 23, 2014; and (3) postponed the merits hearing.
As of August 7, 2014, Weiss did not have new counsel and had not briefed the arbitrability issue as ordered. The arbitrator determined the case was arbitrable and set the evidentiary hearing for September. The hearing was held as scheduled; Weiss did not appear. A schedule for further briefing was set, but Weiss filed nothing in the allotted time frame.
On September 30, 2014, after the time for briefing had expired, an attorney sent a letter to the arbitrator on Weiss's behalf. The attorney, retained only to write the letter, wrote that Weiss wished to amend her initial arbitration demand to add a claim for unpaid overtime wages under section 1194, subdivision (a), among others. The arbitrator declined to allow the requested amendments by order dated October 1, 2014. Citing AAA Commercial Arbitration Rule R-6(b), Expedited Procedures Rule E-2, and Employment Rule 5, the arbitrator concluded that whether to allow Weiss to add new claims was within the arbitrator's discretion. She chose to disallow the requested amendments because discovery was complete and the hearing had been held, such that "[a]dding new claims at this late date would make the parties redo the entire arbitration process, at a point when the case is ready for a liability decision."
The arbitrator issued the final award on March 12, 2015. In it, she concluded that the Section 12 arbitration clause was enforceable. The arbitrator further concluded that Vidyo had misclassified Weiss as an independent contractor and declared her to be a common law employee. The arbitrator rejected Weiss's claims that given her status as a common law employee, she was entitled to damages for lost future wages, FICA, FUTA, workers' compensation, state disability insurance, stock, bonuses, salary increases, advancement opportunities, 401(k) participation, health and dental benefits, and personal leave. The arbitrator also rejected Weiss's claims for waiting time penalties (§ 203) and failure to provide timely statements (§§ 204, subd. (a); 210). However, the arbitrator granted Weiss's claim for failure to provide itemized wage statements in violation of section 226, subdivision (a), and awarded her $3,350 in statutory damages and $40,188 in attorney fees and costs. The arbitrator rejected Weiss's wrongful termination and UCL claims.
As to Vidyo's counterclaim for breach of contract, the arbitrator concluded that Weiss had breached the agreement to arbitrate and awarded Vidyo $75,748.50, the "legal fees and costs" it incurred "[a]s a result of Weiss's breach of contract."
Finally, the arbitrator ordered each party to pay $37.50 for the cost of the hearing room, denied Weiss's request for a refund of the $775 in AAA administrative fees she had paid, and ordered Vidyo to pay the balance of the AAA administrative fees.
On June 18, 2015, Weiss filed a petition to vacate the arbitration award in Santa Clara County Superior Court. The trial court denied that petition in an order filed on November 2, 2015. Weiss appealed from the order on December 24, 2015. The trial court entered judgment in the amount of $32,210.50 in favor of Vidyo and against Weiss on June 21, 2016.
Weiss's appeal was premature. However, the California Rules of Court allow us to "treat a notice of appeal filed after the superior court has announced its intended ruling, but before it has rendered judgment, as filed immediately after entry of judgment." (Cal. Rules of Court, rule 8.104, subd. (d)(2).) Because an appealable judgment was entered after the notice of appeal was filed, we will liberally construe the appeal to have been taken from the judgment. (Doan v. State Farm General Ins. Co. (2011) 195 Cal.App.4th 1082, 1090, fn. 4; Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1189-1190.)
II. DISCUSSION
A. Applicable Law and Standard of Review
As an initial matter, we must determine whether the California Arbitration Act (Code Civ. Proc., § 1280 et seq. (CAA)) or the Federal Arbitration Act (9 U.S.C. § 1 et seq. (FAA)) governs Weiss's petition to vacate. Vidyo argues that, because the arbitration agreement involves interstate commerce, the grounds for vacatur set forth in the FAA apply. Weiss contends that the CAA provides the applicable grounds for review. Precedent is on Weiss's side. California courts consistently have held that "where, as here, the parties do not 'expressly designate that any arbitration proceeding should move forward under the FAA's procedural provisions rather than under state procedural law' [citation], California procedures necessarily apply." (Los Angeles Unified School Dist. v. Safety National Casualty Corporation (2017) 13 Cal.App.5th 471, 482; see Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 922 ["generally the California Arbitration Act governs arbitral procedures brought in California courts"]; Mave Enterprises, Inc. v. Travelers Indemnity Co. (2013) 219 Cal.App.4th 1408, 1429-1430 [regardless of the presence of interstate commerce, the procedural provisions of the CAA determine the validity of an arbitration award absent a choice-of-law provision expressly mandating the application of the FAA].) Accordingly, our review is governed by the CAA.
Under the CAA, "[j]udicial review of an arbitration award is ordinarily limited to the statutory grounds for vacating an award under [Code of Civil Procedure] section 1286.2 and correcting an award under [Code of Civil Procedure] section 1286.6." (ECC Capital Corporation v. Manatt, Phelps & Phillips, LLP (2017) 9 Cal.App.5th 885, 899-900.) Both of those provisions allow for review if the arbitrator exceeded the scope of his or her authority. (Code Civ. Proc. § 1286.2, subd. (a)(4) ["the court shall vacate the award if the court determines . . . [¶] . . . [¶] (4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted"]; Id., § 1286.6, subd. (b) ["the court, unless it vacates the award pursuant to [Code of Civil Procedure s]ection 1286.2, shall correct the award and confirm it as corrected if the court determines that: . . . [¶] . . . [¶] (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted"].) "[A]rbitrators do not 'exceed[ ] their powers' within the meaning of [Code of Civil Procedure] section 1286.2 . . . and [Code of Civil Procedure] section 1286.6, subdivision (b) merely by rendering an erroneous decision on a legal or factual issue, so long as the issue was within the scope of the controversy submitted to the arbitrators." (Moshonov v. Walsh (2000) 22 Cal.4th 771, 775.)
As such, an arbitrator's decision generally cannot be reviewed for legal or factual errors. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11 (Moncharsh).) There exist "narrow exceptions" to that general rule, however. (Ibid.) Pertinent to this appeal, an arbitration award is reviewable when "granting finality to an arbitrator's decision would be inconsistent with the protection of a party's statutory rights" or with "an explicit legislative expression of public policy." (Id. at p. 32; see Epic Medical Management, LLC v. Paquette (2015) 244 Cal.App.4th 504, 513.) Courts have explained that judicial review, and vacatur, is appropriate in those circumstances because arbitrators "exceed their powers [when they] issu[e] an award that violates a party's unwaivable statutory rights or that contravenes an explicit legislative expression of public policy." (Richey v. AutoNation, Inc. (2015) 60 Cal.4th 909, 916 (Richey).)
We review de novo the trial court's order denying Weiss's petition to vacate the arbitration award. (SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1198.)
B. Denial of Request to Add New Overtime Wage Claim After Hearing
Weiss contends the arbitration award should be vacated because the arbitrator arbitrarily refused to allow Weiss to add a claim for unpaid overtime wages, thereby violating her unwaivable statutory right to overtime pay. For that contention, Weiss relies on Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 680 (Pearson Dental), which held that "an arbitrator whose legal error has barred an employee subject to a mandatory arbitration agreement from obtaining a hearing on the merits of a claim based on [an unwaivable statutory] right has exceeded his or her powers within the meaning of Code of Civil Procedure section 1286.2, subdivision (a)(4), and the arbitrator's award may properly be vacated." Put differently, when "an employee subject to a mandatory employment arbitration agreement is unable to obtain a hearing on the merits of . . . [one or more] claims based on . . . unwaivable statutory rights, because of an arbitration award based on legal error, the trial court does not err in vacating the award." (Ibid.)
It is undisputed that Weiss was "an employee subject to a mandatory employment arbitration agreement . . . ." (Pearson Dental, supra, 48 Cal.4th at p. 680.) And the right to "legal overtime compensation conferred by the statute [is] unwaivable." (Gentry v. Superior Court (2007) 42 Cal.4th 443, 455, recognized as abrogated on other grounds in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 360; see § 1194, subd. (a); Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 150-151 ["California courts repeatedly have recognized" that section 1194 claims are unwaivable].) But even if we assume that the arbitrator's decision is reviewable for legal error under the statutory rights exception, we find no error requiring vacatur.
Weiss says the arbitrator denied the request to add an overtime wages claim "[w]ithout explanation." The record shows otherwise. In a written order denying the request to amend, the arbitrator set forth both the authority and rationale for her decision. She explained that the governing AAA rules granted her discretion as to the addition of new claims. She further explained that she was exercising that discretion to disallow the addition of new claims because "discovery has been completed. Hearings were scheduled and held. Adding new claims at this late date would make the parties redo the entire arbitration process, at a point when the case is ready for a liability decision."
Weiss also criticizes the arbitrator's denial of her request to add an overtime wages claim as "arbitrar[y]." We disagree with that characterization. The AAA Commercial Arbitration Rules, which were incorporated by reference into the parties' arbitration agreement, provide that "[a]fter the arbitrator is appointed, . . . no new or different claim may be submitted except with the arbitrator's consent." In late 2014, after finding that Weiss was a common law employee, the arbitrator ruled that further hearings would be governed by the AAA Employment Rules. Similar to the AAA Commercial Arbitration Rules, Rule 5 of the AAA Employment Arbitration Rules states that, "[a]fter the appointment of the arbitrator, a party may offer a new or different claim or counterclaim only at the discretion of the arbitrator." Thus, the governing rules granted the arbitrator discretion as to the addition of new claims.
On our own motion, we take judicial notice of the AAA Employment Rules, archived at: <https://perma.cc/HT6V-JRL9> [as of Oct. 16, 2018]. (Evid. Code, §§ 452, subd. (h) & 459, subd. (a); Boghos v. Certain Underwriters at Lloyd's of London (2005) 36 Cal.4th 495, 505, fn. 6 [taking judicial notice of AAA rules].) We are mindful that we did not give the parties notice of our intention to take judicial notice of the AAA Employment Rules. (Evid. Code, §§ 452, subd. (b), 455, 459.) We did not do so because the matter is not "of substantial consequence to the determination of the action," as that phrase is used in Evidence Code section 459, subdivisions (c) and (d). At the time the arbitrator ruled on the amendment request, it was applying the AAA Commercial Arbitration Rules, as called for by the arbitration agreement. We refer to the AAA Employment Rules only to note that they likewise grant the arbitrator discretion in the context of the addition of new claims.
Similarly, in a court action, the trial court has wide discretion to allow the amendment of pleadings. (Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 175 (Melican).) While "it is . . . true that courts generally should permit amendment to the complaint at any stage of the proceedings, up to and including trial" (ibid.), exceptions to the liberal policy of allowing amendment exist. For example, that policy will not prevail where the opposing party will be prejudiced by the amendment. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.) And "unwarranted delay in presenting [the amendment] may—of itself—be a valid reason for denial" (Roemer v. Retail Credit Co. (1975) 44 Cal.App.3d 926, 939-940) on grounds of "lack of diligence in offering the amendment after knowledge of the facts." (Id. at p. 940; Melican, supra, at p. 175 ["appellate courts are less likely to find an abuse of discretion where, for example, the proposed amendment is ' "offered after long unexplained delay . . . or where there is a lack of diligence" ' "].) Once trial has commenced, leave to amend "is properly denied . . . if the proposed amendment raises new issues that the opposing party has had no opportunity to defend." (Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 355.) And "[t]here is a platoon of authority to the effect that a long unexcused delay is sufficient to uphold a trial judge's decision to deny the opportunity to amend pleadings, particularly where the new amendment would interject a new issue which requires further discovery." (Green v. Rancho Santa Margarita Mortgage Co. (1994) 28 Cal.App.4th 686, 692.)
Here, Weiss sought to assert a new basis for liability—failure to pay overtime wages—after discovery had been completed, the arbitration hearing had been held, and time had expired to submit merits briefs. Had the amendment been allowed, it would have required further discovery, a second hearing, and additional briefing. Nevertheless, Weiss offered no valid justification for her delay in seeking to amend. The letter requesting amendment stated only that her new attorney had "reviewed the Verified Complaint, dated and filed in San Mateo County Superior Court on March 26, 2012," and, "[b]ased on additional information that Ms. Weiss provided regarding the nature and scope of the services she rendered, it appears that Ms. Weiss is a non-exempt employee and may be entitled to recover . . . unpaid overtime wages . . . ." But the retention of new counsel "cannot excuse the delay; for, otherwise, counsel would be inevitably substituted whenever a party desired to belatedly amend its complaint." (Del Mar Beach Club Owners Assn. v. Imperial Contracting Co. (1981) 123 Cal.App.3d 898, 915.) In view of Weiss's lack of diligence in offering the amendment, we can discern no abuse of the arbitrator's discretion, particularly given the amendment would inject a new issue requiring further discovery and hearing. (See P&D Consultants, Inc. v. City of Carlsbad (2010) 190 Cal.App.4th 1332, 1345 [no abuse of discretion in denying leave to amend where plaintiff "did not seek leave to amend until after the trial readiness conference, an amendment would require additional discovery and perhaps result in a demurrer or other pretrial motion, and [plaintiff] offered no explanation for the delay"].)
C. Arbitration Costs
Next, Weiss argues that the arbitration award should be vacated because it contravenes public policy by requiring her, as the employee, to pay some of the costs unique to arbitration, rather than placing all of those costs on employer Vidyo. Specifically, she contends that she "was forced to reduce the amount of damages in her initial arbitration demand from $1,000,000 down to $10,000 because she could not afford to pay the $6,200 filing fee that the AAA demanded before an arbitrator would even be appointed." Weiss further maintains the arbitrator improperly awarded attorneys' fees and costs to Vidyo, which she says the employer would not have been permitted to recover had the matter been litigated in court.
Weiss does not challenge the $37.50 hearing room fee the arbitration award imposed on her or the arbitrator's refusal to refund her $775 in unspecified AAA administrative fees.
1. Legal Principles
In California, mandatory employment arbitration agreements requiring the arbitration of unwaivable statutory claims must meet five minimum requirements to be lawful. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 90-91, 102 (Armendariz)), abrogated in part on another ground in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333.) One of those minimum requirements is that "the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court." (Armendariz, supra, at pp. 110-111; Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1084 ["Armendariz . . . categorically imposes costs unique to arbitration on employers when unwaivable rights pursuant to a mandatory employment arbitration agreement are at stake"].) Under Armendariz, "the imposition of substantial forum fees [on employees] is contrary to public policy, and is therefore grounds for invalidating or revoking an arbitration agreement and denying a petition to compel arbitration . . . ." (Armendariz, supra, at p. 110.)
This requirement is designed to "ensure that employees bringing [such] claims will not be deterred by costs greater than the usual costs incurred during litigation, costs that are essentially imposed on an employee by the employer." (Armendariz, supra, 24 Cal.4th at p. 111.)
Armendariz was decided on appeal from the denial of a petition to compel arbitration. (Armendariz, supra, 24 Cal.4th at p. 127.) The arbitration agreement at issue was silent on costs. (Abramson v. Juniper Networks, Inc. (2004) 115 Cal.App.4th 638, 661.) "The Supreme Court concluded that silence on costs is not grounds for denying enforcement; rather, the lack of an express cost-sharing provision merely permits the court to infer the employer's obligation to pay forum costs unique to arbitration." (Ibid.) The Armendariz court held that, because the imposition of substantial forum fees on employees is grounds for denying a petition to compel arbitration, "the cost issues should be resolved not at the judicial review stage but when a court is petitioned to compel arbitration." (Armendariz, supra, at p. 110.)
2. Weiss Fails to Demonstrate Reviewable Prejudicial Error
Weiss says the arbitration award is reviewable under the public policy exception because it imposes costs unique to the arbitral forum on her, the employee, in contravention of public policy. As previously noted, an arbitration award is reviewable when "granting finality to the arbitrator's decision would be inconsistent with . . . . an explicit legislative expression of public policy." (Moncharsh, supra, 3 Cal.4th at p. 32.) Because "the imposition of substantial forum fees [on employees] is contrary to public policy," we shall assume without deciding that, in an arbitration pursuant to a mandatory employment arbitration agreement and involving an unwaivable statutory claim, an award imposing costs unique to the arbitral forum on the employee is reviewable under the public policy exception. (Armendariz, supra, 24 Cal.4th at p. 110.) We nevertheless affirm the trial court's order denying Weiss's petition to vacate because she fails to establish reviewable, prejudicial error.
As noted, our Supreme Court held in Armendariz that "the cost issues should be resolved not at the judicial review stage but when a court is petitioned to compel arbitration." (Armendariz, supra, 24 Cal.4th at p. 110.) Here, Weiss apparently did not raise the issue of costs at the time Vidyo sought to compel arbitration. Armendariz could be read to mean she thereby waived any challenge to the cost issue. However, we are aware of no case law to that effect, and at least one court has addressed the issue of arbitral costs in the context of a petition to vacate an arbitration award. (D.C. v. Harvard-Westlake School (2009) 176 Cal.App.4th 836, 849, 867, 869 [where arbitration award imposed more than $500,000 in arbitral expenses and attorney fees on plaintiffs, reversing judgment entered following order granting petition to confirm arbitration award and denying petition to vacate arbitration award and directing the trial court on remand to "take the necessary steps to ensure that the arbitration award does not include . . . any expenses unique to arbitration" under Armendariz].)
a. Complained-of Damages Award is Not an Arbitral Cost
Weiss says the arbitrator improperly awarded attorney fees and costs to Vidyo despite finding for Weiss on her misclassification claim and despite the statutory limitations on an employer's right to recover attorney fees and costs set forth in sections 218.5 and 1194. Weiss's argument misconstrues the arbitration award. For the reasons described below, the attorney fees and costs awarded to Vidyo were not costs unique to the arbitral forum. Accordingly, the imposition of those fees and costs did not violate the public policy against imposing arbitral fees on employees, such that the public policy exception allowing for legal review is not triggered.
In connection with Weiss's successful misclassification claim, the arbitrator awarded her $3,350 in damages under section 226, subdivision (a) for Vidyo's failure to provide itemized wage statements. The arbitrator further awarded Weiss $40,188 in attorney fees and costs pursuant to section 226, subdivision (e)(1). The arbitrator did not award Vidyo attorney fees or costs in connection with Weiss's misclassification claim.
Separately, the arbitrator found in favor of Vidyo on its breach of contract counterclaim, concluding that Weiss breached the agreement to arbitrate set forth in Section 12 of the Consulting Agreement. The arbitrator awarded Vidyo $75,748.50, which the award described as the "legal fees and costs" Vidyo incurred "[a]s a result of Weiss's breach of contract." Plainly, that award was for damages Vidyo incurred "[a]s a result of Weiss's breach of contract." Those contract damages took the form of attorney fees and costs because Weiss's breach forced Vidyo to participate in litigation. But the nature of the damages does not convert the award into an award of attorney fees under the Labor Code, as Weiss suggests.
The precise basis for the $75,748.50 award is not clear from the record. The arbitration award suggests those fees and costs were incurred in connection with "Weiss's second San Mateo County complaint." But the parties have not provided us with the full record of the arbitration proceedings, which would allow us to understand which litigation costs were included in the damages award. That need not concern us however, because neither the propriety of the court's ruling on the breach of contract counterclaim, nor the amount of damages awarded is properly before us.
Similarly meritless is Weiss's contention that the arbitrator made the $75,748.50 award to Vidyo pursuant to Section 4 of the Consulting Agreement. That section provides that Weiss is an independent contractor; is not entitled to participate in any of Vidyo's employee benefit or similar plans; and agrees to indemnify Vidyo "from any and all claims, damages, liability, settlement, attorneys' fees and expenses, as incurred, on account of the foregoing or any breach by Consultant of this Section 4." As explained above, the award to Vidyo represented damages for its successful breach of contract counterclaim; it was not indemnification for attorneys' fees and expenses Vidyo incurred because Weiss challenged her independent contractor status.
In sum, the award of damages to Vidyo on its counterclaim did not run afoul of Armendariz's rule that employers must pay any costs unique to arbitration in arbitral proceedings carried out pursuant to a mandatory employment arbitration agreement and involving unwaivable statutory rights. Thus, Weiss fails to show the damages award to Vidyo contravenes public policy, which would render the award reviewable.
b. Weiss Fails to Establish Any Prejudicial Error in Connection With The Complained-of Filing Fees
Weiss maintains that she reduced the amount of damages she was seeking from $1,000,000 to $10,000 because she could not afford to pay the $6,200 filing fee associated with the higher demand. The $6,200 filing fee AAA sought to impose on Weiss is considerably higher than the filing fee a plaintiff must pay in court and is the sort of unique cost of arbitration to which Armendariz applies. (See Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 90-92].) That said, Weiss fails to show that the arbitrator committed prejudicial error in connection with the filing fee.
There is no indication the arbitrator made any ruling regarding the propriety of the filing fee. The complained-of filing fee was requested by a supervisor with AAA's Case Filing Services. Weiss does not contend, and our review of the record does not disclose, that Weiss requested the arbitrator to waive, shift, or otherwise adjust that fee, nor does it appear that she ever argued that the arbitration agreement was unconscionable because it somehow required her to pay that fee. In short, it does not appear that the arbitrator ever considered the propriety of the initial $6,200 filing fee.
"Even if the arbitrator erred [in connection with the filing fee], and even if such an error could serve as a basis for vacating an arbitration award, [Weiss] has not shown that the error was prejudicial." (Richey, supra, 60 Cal.4th at p. 920.) Weiss did not pay the $6,200 filing fee, opting instead to lower her demand. (Presumably, she paid a lower filing fee associated with the lower demand. However, she gives us no information as to any filing fee she may have paid, nor does she challenge any such fee.) Weiss does not explain how lowering the demand from $1,000,000 to $10,000 prejudiced her case. She does not contend that she abandoned any substantive claims, nor does a comparison of her initial arbitration demand and the arbitration award suggest that she did. Nothing in the arbitration award indicates the arbitrator limited the award to Weiss because of her $10,000 demand. The arbitrator rejected most of Weiss's claims on the merits. Weiss succeeded in obtaining a declaration of her status as a common law employee and, as a result of that declaration, was awarded damages on her claim for failure to provide itemized wage statements. The arbitrator awarded Weiss the full amount of damages to which she was entitled on that claim, $3,350, and $40,188 in attorney fees and costs. Because any error by the arbitrator regarding the filing fee caused Weiss no prejudice, "the arbitrator's award in [Vidyo's] favor will stand." (Richey, supra, at p. 921.)
Weiss's arbitration demand reasserted the claims she alleged against Vidyo in her state court complaint—misclassification of employee as independent contractor, failure to provide itemized wage statements, waiting time penalties under section 203, unconscionable arbitration agreement and delegation clause, and unfair business practices in violation of the UCL—as well as a claim for wrongful termination in violation of public policy. The arbitrator addressed each of those claims in the arbitration award.
c. Weiss Forfeited Her Challenge to Other Fees
For the first time on reply, Weiss complains that she "could not participate in the arbitration hearing because she could not afford to pay the $9,050 deposit the American Arbitration Association demanded from her if she planned to attend the hearing." "Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant." (Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 295, fn. 11.) Accordingly, "[p]oints raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before." (Campos v. Anderson (1997) 57 Cal.App.4th 784, 794, fn. 3.) Because Weiss has not shown good cause for raising the issue belatedly, we will not consider it.
D. We Decline to Reach Weiss's New Argument That Section 4 Renders Section 12 Unenforceable
Finally, Weiss argues that Section 4 of the Consulting Agreement requires her to pay all the costs of arbitration in violation of Armendariz, such that the arbitration agreement in Section 12 is unenforceable. Weiss did not raise this argument in support of her petition to vacate, nor does it appear that she raised it before the arbitrator. We decline to reach this argument since it is being raised for the first time on appeal. (See Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1167, fn. 1 [declining to reach issue of law regarding the validity of an arbitration agreement, which was raised for the first time on appeal].)
Section 4, entitled "Relationship of the Parties; Independent Contractor; No Employee Benefits," provides: "Notwithstanding any provision hereof, you are an independent contractor (not an employee or other agent of ours) and, subject to our normal operating hours, are responsible for the manner and the hours during which the Services are performed, are solely responsible for all taxes, withholdings, and other statutory, regulatory or contractual obligations of any sort (including, but not limited to, those relating to workers' compensation, disability insurance, Social Security, unemployment compensation coverage, the Fair Labor Standards Act, income taxes, etc.), and are not entitled to participate in any of Vidyo's employee benefit plans, fringe benefit programs, group insurance arrangements or similar programs. You agree to indemnify us from any and all claims, damages, liability, settlement, attorneys' fees and expenses, as incurred, on account of the foregoing or any breach by Consultant of this Section 4."
III. DISPOSITION
The judgment is affirmed. Vidyo shall recover its costs on appeal.
/s/_________
ELIA, J. WE CONCUR: /s/_________
GREENWOOD, P. J. /s/_________
MIHARA, J.