Judge: Anne Richardson, Case: 22STCV21779, Date: 2023-03-15 Tentative Ruling

Case Number: 22STCV21779    Hearing Date: March 15, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background Allegations

Plaintiff Synyahn Johnson sues Defendants Jennifer R. Berman, M.D.—a professional corporation—and Jennifer Berman—an individual (“Dr. Berman”)—(collectively “Defendants”) pursuant to claims of (1) FEHA Race Discrimination, (2) FEHA Retaliation, (3) FEHA Racial Harassment, (4) FEHA Hostile Work Environment, (5) Failure to Prevent Discrimination, Harassment, and Retaliation, (6) Violation of Labor Code § 1102.5 [Whistleblower Retaliation], (7) IIED, and (8) Wrongful Termination. The claims are premised on allegations that, while in the employ of Defendants—between December 22, 2021 and March 9, 2022—Dr. Berman used racially derogatory and insensitive references to Plaintiff as an African American—e.g., telling Plaintiff she “[wa]s going to be run around like a slave” about another employee—prompting Plaintiff Johnson to request that Defendants conduct an investigation into her complaint and stop treating her differently based on her race, to which Defendants responded by terminating Plaintiff’s employment.

On October 13, 2022, Defendants made a Petition to Compel Binding Arbitration and Stay Civil Court Action as to all of Plaintiff’s claims pursuant to an arbitration agreement between the parties grounded in the Federal Arbitration Act (“FAA”).

Plaintiff Johnson opposed the motion on March 2, 2023, to which Defendants filed a reply on March 6, 2023.

Petition to Compel Binding Arbitration and Stay Action: DENIED.

Legal Standard

The Federal Arbitration Act (“FAA”), while a federal statute, applies in California courts and requires state courts to enforce arbitration agreements as required by the federal common law developed under the FAA. (See Southland Corp. v. Keating (1984) 465 U.S. 1, 15-16; Broughton v. Cigna Healthplans of California (1999) 21 Cal.4th 1066, 1074-78.) The FAA creates a public policy favoring arbitration agreements and preempts and invalidates state law and state judicial decisions that disfavor arbitration or require arbitration provisions to pass higher scrutiny. (Southland Corp. v. Keating, supra, at p. 12; Perry v. Thomas (1987) 482 U.S. 483, 490.) If the parties designate the FAA applies, then California arbitration law is preempted. (See, e.g., Rodriguez v. American Techs., Inc. (2006) 136 Cal.App.4th 1110, 1121-22.)

A court’s inquiry is limited to a determination of (1) whether a valid arbitration agreement exists and (2) whether the arbitration agreement covers the dispute. (9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostics Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130; Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 84; see Simula, Inc. v. Autoliv, Inc. (9th Cir. 1999) 175 F.3d 716, 720 [if the finding is affirmative on both counts the FAA requires the Court to enforce the arbitration agreement in accordance with its terms].) “An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” (United Steelworkers of America v. Warrior & Gulf Navigation Co. (1960) 363 U.S. 574, 582-83.)

Moreover, the general rule is that the FAA governs all agreements to arbitrate in contracts “involving interstate commerce.” (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.) The term “involving” commerce “is broad and is indeed the functional equivalent of “affecting’ commerce.” (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 273-74.) The U.S. Supreme Court has held that this broad interpretation includes employment contracts. (See Circuit City Stores v. Adams (2001) 532 U.S. 105, 106.) The defendant bears the burden of proving applicability of the FAA by showing that its activities constitute interstate commerce.” (Hoover v. American Income Life Insurance Co. (2012) 206 Cal.App.4th 1193, 1207.) Failure to demonstrate that the employment agreement affects interstate commerce renders the FAA in applicable. (See Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 687-88; Woolls v. Superior Court (2005) 127 Cal.App.4th 197, 212.)

Even where the FAA governs the interpretation of arbitration clauses, California law governs whether an arbitration agreement has been formed in the first instance. (Baker v. Osborne Development Corp. (2008) 159 Cal.App.4th 884, 893.)

The party seeking arbitration has the “burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence.” (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842.) “Once that burden is satisfied, the party opposing arbitration must prove by a preponderance of the evidence any defense to the petition.” (Lacayo v. Cataline Restaurant Group Inc. (2019) 38 Cal.App.5th 244, 257.) “The trial court sits as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence, and any oral testimony the court may receive at its discretion, to reach a final determination.” (Ruiz v. Moss Bros. Auto Group, Inc., supra, at p. 842.)

Analysis

I. Whether an Arbitration Agreement Exists

“Arbitration is a product of contract. Parties are not required to arbitrate their disagreements unless they have agreed to do so. [Citation.] A contract to arbitrate will not be inferred absent a ‘clear agreement.’ [Citation.] When determining whether a valid contract to arbitrate exists, we apply ordinary state law principles that govern contract formation. [Citation.] In California, a ‘clear agreement’ to arbitrate may be either express or implied in fact. [Citation.]” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1092-93.) “[T]he court is only required to make a finding of the agreement’s existence, not an evidentiary determination of its validity. (Condee v. Longwood Management Corp., supra, 88 Cal.App.4th at p. 219.)

To establish an agreement to arbitrate between the parties, Defendants provide a copy of an arbitration agreement as Exhibit C to the Berman Declaration. (Mot., Berman Decl., Ex. C.) The document contains a purported printed electronic signature by Plaintiff Johnson on a Word document and is dated December 23, 2021. (Id.)

In opposition, Plaintiff Johnson confusingly argues that the signature on the March 23, 2022 (not December 23, 2021) arbitration agreement between the parties is invalid because it is a forgery and was allegedly executed after the date of her termination from employment with Defendants: March 9, 2022. (Opp’n, 3:6-17 [forged signature], 6:21-27 [March 23, 2022 arguments].)

Elsewhere in the opposition, Plaintiff argues that “Defendants cannot establish the signature on the 2022 March arbitration agreement or the 2021 December agreements are truly Plaintiff’s or ‘an act of’ Plaintiff” because, in relevant part, “[t]he December 2021 agreement only contains a typed[]name on a Word document,” where “such is not typically accepted as a signature, especially if there is no intent to be used in lieu of a signature,” and where “Plaintiff executed … [an] actual signature … on her Employment Agreement,” such that “[i]f she intended to provide signature on the arbitration agreement, it would mirror the same signature she already provided.” (Opp’n, 7:11-19.) Alternately stated, Plaintiff Johnson argues that if she had really signed the arbitration agreement, her signature would not be typed out, but rather, would appear as an electronic wet signature, such as in her employment agreement, included as Exhibit A to the opposition’s Johnson Declaration. (Opp’n, Johnson Decl., Ex. A [copy of Plaintiff’s employment agreement with signature represented by handwritten signature mark]; Mot., Berman Decl., Ex. A [same document].)

In the alternative, Plaintiff Johnson argues that her printed name on any documents dated December 2021 “was not her manifestation of intent to enter into an agreement to arbitrate” and that she did not provide any such signature in the 2021 documents. (Opp’n, 8:1-28; see also Opp’n, 7:16-19, 10:4-6.) To support the latter position, Plaintiff Johnson refers to California case law for the proposition that “[a]n individual cannot confirm or deny the authenticity of an electronic signature by viewing a computer printout of the person’s printed name followed by the words ‘(Electronic Signature),’” and that, “[i]n such a case, the individual’s inability to recall signing electronically may reasonably be regarded as evidence that the person did not do so.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 757; see Opp’n, 8:7-26.)

In reply, Defendants make several arguments, including that: (1) the signature appearing on the December 23, 2021 arbitration agreement is not a forgery (Reply, 2:3-11); (2) Iyere’s comment as to printed signatures was mere dictum where the facts of Iyere deal with a handwritten signature, signed by the employee without even reading the arbitration agreement (Reply, 2:12-20); (3) Defendants’ Exhibits E and F attached to the Berman Declaration show that a Word document titled “Onboarding Doc” was attached to a December 23, 2021 email from Plaintiff to Dr. Berman with the subject of the email reading “Completed on boarding paperwork: employment contract, NDA, arbitration, etc.,” thus implying that Plaintiff did in fact sign her printed name as a signature on the arbitration agreement dated December 23, 2021 (Reply, 2:21-4:12; see Mot., Berman Decl., Exs. E, F); and (4) Exhibit G attached to the Berman Declaration shows a January 26, 2022 email from Plaintiff to Dr. Berman in the same email chain, thus implying Plaintiff was under notice that she signed an arbitration agreement (Reply, 4:14-5:5).

Overall, the Court finds that there is sufficient evidence to show that Plaintiff signed the December 23, 2021 arbitration agreement attached as Exhibit C to the Berman Declaration.  Exhibit C to the Berman Declaration consists of the arbitration agreement in which Plaintiff’s printed name with the phrase “(electronic signature)” appears above the “employee” signature line. (Berman Decl., Ex. C.) Ms. Berman herself declares that she sent the arbitration agreement to Plaintiff via email and that she received email documents back from Plaintiff via email, including an email attaching the Arbitration Agreement.  (Berman Decl., ¶¶ 11-17.)  Exhibits E and F to the Berman Declaration show that Plaintiff’s email address mailed an onboarding packet to Dr. Berman on December 23, 2021, including a reference to a “Completed” “arbitration” document in the subject header for that email. (Berman Decl., Exs. E, F; see Opp’n generally [not contesting email address attributed to Plaintiff Johnson].) Exhibit G shows that Plaintiff Johnson sent a further email in the same email chain, bolstering the argument that Plaintiff signed the arbitration agreement because the January 26, 2022 email was a continuation of the communications first exchanged on December 23, 2021.

While the Court recognizes that Defendants’ evidence is not as convincing as say, an electronic signature provided by Plaintiff by entering a website that requires a username and password individualized to Plaintiff herself and authenticated by Dr. Berman to a reasonable degree through the explanation of a detailed online procedure to authenticate signature and safeguard privacy, Defendants’ evidence sufficiently explains on what basis Dr. Berman can state that the electronic printed signature on the December 23, 2021 arbitration agreement belonged to Plaintiff Johnson: Berman and Plaintiff directly corresponded via email, through which Berman received Plaintiff’s signed arbitration agreement in Word format, dated December 23, 2021, as evidenced in Exhibits C, E, F, and G of the Berman Declaration. (Mot., Berman Decl., ¶¶ 5-21, Exs. C, E-G; see, e.g., Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1062 [electronic signature authenticated where declarant “detailed [company’s] security precautions regarding transmission and use of an applicant’s unique username and password, as well as the steps an applicant would have to take to place his or her name on the signature line of the employment agreement and the DRP,” such that, “[b]ased on this procedure, [declarant] concluded that the ‘name Jay Baniaga Espejo could have only been placed on the signature pages of the employment agreement and the DRP by someone using [the employee’s] unique user name and password,’” and that “ [g]iven this process for signing documents and protecting the privacy of the information with unique and private user names and passwords, the electronic signature was made by Dr. Espejo’ on the employment agreement and the DRP at the date, time, and IP address listed on the documents”]); compare Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 844, [“[Declarant] only offered her unsupported assertion that [employee] was the person who electronically signed the 2011 agreement” instead of explaining how “an electronic signature in the name of ‘Ernesto Zamora Ruiz’ could only have been placed on the 2011 agreement (i.e., on the employee acknowledgement form) by a person using Ruiz’s ‘unique login ID and password,’” with “the date and time printed next to the electronic signature indicat[ing] the date and time the electronic signature was made,” and where “all Moss Bros. employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements,” such that “the electronic signature on the 2011 agreement was, therefore, apparently made by Ruiz on September 21, 2011, at 11:47 a.m.”].)

II. Scope of the Arbitration Agreement

“[T]he decision as to whether a contractual arbitration clause covers a particular dispute rests substantially on whether the clause in question is ‘broad’ or ‘narrow’.” (Bono v. David (2007) 147 Cal.App.4th 1055, 1067.) “‘A “broad” clause includes those using language such as “any claim arising from or related to this agreement”’ [Citation] or ‘arising in connection with the [a]greement’ [Citation.]” (Rice v. Downs, supra, 248 Cal.App.4th at p. 186 [italics omitted].) “But clauses requiring arbitration of a claim, dispute, or controversy ‘arising from’ or ‘arising out of’ an agreement, i.e., excluding language such as ‘relating to this agreement’ or ‘in connection with this agreement,’ are ‘generally considered to be more limited in scope than would be, for example, a clause agreeing to arbitrate “‘any controversy . . . arising out of or relating to this agreement[.]’” [Citations.]” (Id. at p. 186-87 [italics omitted].) “Several Ninth Circuit cases have held that agreements requiring arbitration of ‘any dispute,’ ‘controversy,’ or ‘claim’ ‘arising under’ or ‘arising out of’ the agreement are intended to encompass only disputes relating to the interpretation and performance of the agreement.” (Id. at p. 187.)

Defendants argue that the arbitration agreement is broad enough to encompass the claims before the Court based on its expansive language covering Plaintiff’s claims. (Mot., 11:16-12:17.)

Plaintiff’s opposition does not argue scope of the arbitration agreement. (See Opp’n generally.)

Neither does the Reply focus on scope of the arbitration agreement. (See Reply generally.)

Here, the arbitration agreement indicates that it covers “any claim, dispute or controversy (including, but not limited to, any and all claims of discrimination, harassment, unfair competition, breach of contract and wage or hour disputes[)] which would otherwise require or allow resort to any court or other governmental dispute resolution forum by and between Employee and the Company (or its owners, directors, officers, members, employees, and parties affiliated with the Company’s employee benefit and health plans) arising out of or related to or having any relationship or connection with Employee’s seeking employment with, employment by, or other association with the Company.” (Mot., Berman Decl., Ex. C.)

Such language is broad and would necessarily, but its own terms, include the Complaint’s claims for (1) FEHA Race Discrimination, (2) FEHA Retaliation, (3) FEHA Racial Harassment, (4) FEHA Hostile Work Environment, (5) Failure to Prevent Discrimination, Harassment, and Retaliation, (6) Violation of Labor Code § 1102.5 [Whistleblower Retaliation], (7) IIED, and (8) Wrongful Termination against Defendants.

III. Interstate Commerce

Defendants argue that the arbitration agreement contemplates employment involving interstate commerce because, “[i]n this case, Dr. Berman is a nationally known urologist and sexual health expert with a practice that serves clients from across the country” and who “regularly consults with patients throughout the United States through a Telemedicine program,” for which reason “Defendants engage in interstate commerce, and the FAA governs the Arbitration Agreement with Plaintiff.” (Mot., 7:17-22, Berman Decl. ¶ 4.) The Motion and Berman Declaration also argue that Dr. Berman “has been featured on national television shows.” (Mot., 7:17-22, Berman Decl. ¶ 4.)

In opposition, Plaintiff argues in relevant part that: (1) “Defendants fail to cite to any cases specifically to support the notion that appearing on national television constitutes interstate commerce” (Opp’n, 11:18-22); (2) “Defendants also fail to provide any statutory or other authority to support that serving a client that may be from out of state constitutes interstate commerce” (Opp’n, 11:22-24); (3) “Defendants cannot establish a reasonable basis to conclude that arbitration contract is a transaction involving commerce because Defendants are not moving goods or people over state lines for the purpose of profit in connection with the business or contract” where “Defendants do not have nurses that do to various states and perform service” and “Defendants only have one medical office which is located in Los Angeles, California” (Opp’n, 11:25-12:7); and (4) Defendants show “no facts stating they actually buy or sell goods from other states for the purpose of running their business” (Opp’n, 12:9-15).

In reply, Defendants argue that “the basis for interstate commerce is the fact that Dr. Berman, not only has a national reputation by virtue of her national television appearances, but significantly also ‘consult[s] with patients locally as well as provide medical services to patients throughout the United States through Telemedicine.’” (Reply, 5:21-24 [citing Mot., Berman Decl., ¶ 4].)

The Court finds that interstate commerce is not connoted by Plaintiff Johnson’s former employment with Defendants. A motion to compel arbitration based on the FAA must show not only that that the employer engaged in interstate commerce but also that “the employment relationship involved interstate commerce.” (Lane v. Francis Capital Management LLC, supra, 224 Cal.App.4th at pp. 687-88.) Here, the Defendants have the burden of making the showing that interstate commerce is connoted by Plaintiff Johnson’s employment relationship with Defendants. (Hoover v. American Income Life Insurance Co., supra, 206 Cal.App.4th at p. 1207.)

Berman’s Declaration argues that Defendants themselves are involved in interstate commerce through the hosting of telehealth appointments with patients outside of California. (Mot., Berman Decl., ¶ 4.) Fatally, however, Berman does not describe how Plaintiff’s duties within her employment with Defendants also connoted interstate commerce. (See Mot., 7:3-22, Berman Decl., ¶ 4; Reply, 5:17-6:15.) Such a showing is necessary for FAA preemption to apply. (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1287 [interstate commerce connoted where employer sold properties in California and Arizona and employee assisted multistate activities by negotiating bank loans with out-of-state banks, and where employee declared that he attended meetings, site visits, and ribbon cuttings outside California]; contra Lane v. Francis Capital Management LLC, supra, at pp. 687 [pleadings that employee and employer only operated in California, and evidence from employer failing to state nature of business or the scope of the employee’s employment insufficient to establish FAA preemption because the evidence did not “establish the facts necessary to show the employment relationship involved interstate commerce”].)

Defendants’ Petition to Compel Arbitration and Stay Civil Court Action is therefore DENIED for failure to show the employment relationship involved interstate commerce.

IV. Defenses

A “party opposing arbitration must prove by a preponderance of the evidence any defense to the petition” to compel arbitration in the matter. (Lacayo, supra, 38 Cal.App.5th at p. 257.)

Having concluded that the employment relationship has not been shown by the evidence to involve interstate commerce—e.g., Plaintiff facilitating Defendants’ interstate commerce transactions through her employment duties—the Court need not reach other arguments presented by Plaintiff Johnson against arbitration in this action. (See Opp’n, 9:1-11:6 [arguing that contract principles compel finding that any 2021 agreements were invalidated by agreements signed in 2022 but including no evidence of documents signed in 2022 in support].)

Conclusion

Defendants Jennifer R. Berman, M.D. and Jennifer Berman’s Petition to Compel Binding Arbitration and Stay Civil Court Action is DENIED for failure to show that Plaintiff’s employment with Defendants involved interstate commerce.