In a striking legal battle, a former employee is challenging the arbitration practices of a prominent funeral services company. Lisa Fredeen filed the complaint against California Cemetery and Funeral Services, LLC (CCFS) in the Superior Court of Los Angeles County on June 11, 2024.
Fredeen, along with co-plaintiff Sarah Mitchum, accused CCFS of multiple violations under the Private Attorneys General Act of 2004 (PAGA). The plaintiffs allege that CCFS failed to provide meal and rest breaks, did not pay premiums for missed breaks, issued inaccurate wage statements, and neglected to reimburse personal cell phone expenses. These claims were brought forward on behalf of all nonexempt employees at CCFS.
The crux of the dispute lies in an arbitration agreement that both Fredeen and Mitchum signed during their onboarding process. Fredeen worked as a preplanning advisor from 2012 until mid-2017, while Mitchum was employed as a family services counselor rookie from November 2017 to February 2018. Both women were required to sign an arbitration agreement as part of their employment conditions without any explanation or opportunity to consult with an attorney.
CCFS sought to compel arbitration based on these agreements. However, the trial court found the arbitration agreement procedurally and substantively unconscionable. The court noted that the agreements were adhesion contracts presented on a take-it-or-leave-it basis during onboarding. Furthermore, CCFS did not inform the plaintiffs they could review or negotiate the terms with legal counsel.
Substantively, the court took issue with two key clauses: an exclusions clause and a confidentiality clause. The exclusions clause allowed CCFS to bring claims related to noncompetition or confidentiality agreements in court while requiring employees to arbitrate all other disputes. This lack of mutuality was deemed unfairly one-sided and substantively unconscionable. Additionally, the confidentiality clause restricted plaintiffs from disclosing any information about the arbitration proceedings except under limited circumstances, thereby hindering their ability to conduct informal discovery and develop evidence.
Despite CCFS's arguments that these clauses were irrelevant or justified by business needs, the trial court declined to sever them from the agreement. Instead, it ruled that doing so would require reformation rather than mere severance—a step beyond its discretion—and thus rendered the entire arbitration agreement unenforceable.
The plaintiffs are seeking civil penalties under PAGA for various Labor Code violations affecting all nonexempt employees at CCFS. They aim for judicial relief that includes invalidating unconscionable employment practices and ensuring fair treatment for current and future employees.
Representing Fredeen and Mitchum are attorneys Matthew J. Matern, Debra J. Tauger, and Launa Adolph from Matern Law Group. Defending CCFS are Carrie M. Francis and Lonnie J. Williams Jr., who have appealed Judge Kristin S. Escalante’s decision in case number BC7069380.