California Legal Brief

The Rule of **Santana v. Studebaker Health Care Center** is that ambiguities in multiple arbitration-related documents signed simultaneously do not negate a valid agreement to arbitrate employment disputes where the parties' intent to arbitrate is clear from the overall terms, under circumstances where the documents contain minor conflicts regarding procedural matters like arbitrator selection but consistently reflect mutual agreement to resolve employment-related disputes through binding arbitration.

Appeal from order denying motion to compel arbitration in Superior Court, Los Angeles County.

Defendant Appellant was Studebaker Health Care Center, LLC — the skilled nursing facility employer that required arbitration agreements as part of its onboarding process.

Plaintiff Respondent was J. Asencion Santana — the employee who filed a wage-and-hour class action after his employment ended.

The suit sounded in wage and hour violations under the Labor Code and PAGA. The suit also included claims for unfair business practices under Business and Professions Code section 17200 et seq.

The key substantive facts leading to the suit were that when Studebaker purchased the skilled nursing facility where Santana worked in January 2023, it required Santana to sign three arbitration-related documents during onboarding. After approximately one year of employment, Santana left and filed a wage-and-hour class action alleging various Labor Code violations including failure to pay minimum wage, overtime, meal and rest periods, and included a PAGA claim.

The procedural result leading to the Appeal: The trial court denied Studebaker's motion to compel arbitration, ruling that conflicts among the three arbitration documents created an absence of mutual assent, and alternatively that the agreement was unconscionable due to conflicting terms and substantively unconscionable PAGA waiver and confidentiality provisions.

The key question(s) on Appeal: 1. Whether conflicts among three arbitration-related documents negated the existence of a valid agreement to arbitrate 2. Whether the arbitration agreement was procedurally unconscionable due to conflicting terms 3. Whether the agreement was substantively unconscionable due to PAGA waiver provisions and confidentiality agreement terms

The Appellate Court held that minor ambiguities regarding procedural matters like arbitrator selection do not undermine a clear mutual intent to arbitrate employment disputes, and that while the agreement exhibited low-level procedural unconscionability typical of adhesion contracts, it was not substantively unconscionable where the PAGA waivers properly preserved non-individual claims and confidentiality provisions served legitimate commercial needs without excessive one-sided concessions.

The case is inapplicable when arbitration documents contain fundamental conflicts about the scope of arbitrable claims rather than procedural matters, when PAGA waivers completely prohibit all representative actions without carving out non-individual claims, or when confidentiality agreements include multiple unconscionable provisions like waiving bond requirements and mandating employee concessions regarding irreparable harm.

The case leaves open questions about what degree of conflicts among multiple arbitration documents would be sufficient to negate mutual assent, and the precise boundaries of legitimate "margin of safety" provisions in confidentiality agreements that favor employers.