Judge: Armen Tamzarian, Case: 22STCV15941, Date: 2024-03-28 Tentative Ruling
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Case Number: 22STCV15941 Hearing Date: March 28, 2024 Dept: 52
Plaintiff Sara Simms’s Motion for
Determination That Predispute Arbitration Agreement is Invalid and
Unenforceable as to the Sexual Harassment Dispute
Plaintiff
Sara Simms moves for an order that the parties’ arbitration agreement is
invalid as to her claims for sexual harassment.
The
Ending Forced Arbitration of Sexual Assault and Sexual Harassment
Act (EFAA) provides: “[A]t the election of the person alleging conduct
constituting a sexual harassment dispute or sexual assault dispute, … no
predispute arbitration agreement … shall be valid or enforceable with respect
to a case which is filed under Federal, Tribal, or State law and relates to the
sexual assault dispute or the sexual harassment dispute.” (9 U.S.C. § 402(a).)
Stay of
Action
Defendants Epione
Medical Corporation, Epione Beverly Hills, Inc., Beverly Hills Plastic Surgery
Associates, and Simon Ourian argue this motion is procedurally defective because the
court stayed the action. “[A]fter granting a petition to compel
arbitration and staying a lawsuit, the scope of jurisdiction that a trial court
retains is extremely narrow.” (MKJA,
Inc. v. 123 Fit Franchising, LLC (2011) 191 Cal.App.4th 643, 658.) “[T]he purpose of” staying the action under
the California Arbitration Act “is to protect the jurisdiction of the
arbitrator by preserving the status quo until the arbitration is
resolved.” (Id. at p. 660.)
The
court has jurisdiction to consider this motion.
The EFAA provides, “The applicability of this chapter to an agreement to
arbitrate and the validity and enforceability of an agreement to which this
chapter applies shall be determined by a court, rather than an arbitrator,
irrespective of whether the party resisting arbitration challenges the
arbitration agreement specifically or in conjunction with other terms of the
contract containing such agreement, and irrespective of whether the agreement
purports to delegate such determinations to an arbitrator.” (9 U.S.C. § 402(b).) Congress thus expressly required that a
court, not an arbitrator, must determine whether the EFAA applies to this case. Doing so may mean the arbitrator has no jurisdiction
over part of the proceeding. Declining
to decide the issue because the case was stayed pending arbitration would undermine
the purpose of the EFAA and the purpose of arbitration as an efficient way to
resolve disputes.
Assuming
lifting the stay is required, the court hereby lifts the stay of this action
for the limited purpose of deciding this motion.
Waiver
Defendants argue plaintiff waived
the right to invalidate the arbitration agreement under the EFAA. Defendants rely on authority about waiving
the right to enforce an arbitration agreement.
Neither party cites authority on waiving the right to invalidate an
arbitration agreement. Generally, “[w]aiver
is the intentional relinquishment of a known right after full knowledge of the
facts.” (DRG/Beverly Hills, Ltd. v.
Chopstix Dim Sum Cafe & Takeout III, Ltd. (1994) 30 Cal.App.4th 54,
59.) The party asserting waiver bears
the burden of proving it applies. (Insurance Co. of the West v. Haralambos
Beverage Co. (1987) 195 Cal.App.3d
1308, 1320.)
Defendants do not show
that plaintiff intentionally relinquished a known right to invoke the EFAA. The court granted defendants’ motion to
compel arbitration on January 27, 2023. On
January 29, 2024, the Court of Appeal issued a new decision with a different
interpretation of when a dispute arises under the EFAA. (Kader v. Southern California
Medical Center, Inc. (2024) 99 Cal.App.5th 214 (Kader).) Prior authority generally interpreted the
EFAA to apply if the cause of action accrued after the law took effect in March
2022. (See Murrey v. Superior Court (2023)
87 Cal.App.5th 1223, 1235 (Murrey); Walters v. Starbucks Corp. (S.D.N.Y.
2022) 623 F.Supp.3d 333, 337; Newcombe-Dierl v. Amgen (C.D. Cal., May
26, 2022, No. CV222155DMGMRWX) 2022 WL 3012211, at *5.) Plaintiff’s causes of action accrued in 2020. But, as the court will discuss below, her “sexual
harassment dispute” may have arisen after that date. She therefore did not know she had any right
to invoke the EFAA until after the Court of Appeal decided Kader.
Reconsideration
Defendants argue this is an improper
motion for reconsideration of the court’s order compelling arbitration. Assuming this constitutes a motion for
reconsideration, the Kader decision justifies reconsideration. “If a court at any time determines that there
has been a change of law that warrants it to reconsider a prior order it
entered, it may do so on its own motion and enter a different order.” (CCP § 1008(c).) If doing so were necessary, the court would
find Kader is a change of law that warrants the court to reconsider its
order compelling arbitration.
Sexual Harassment Dispute
Defendants argue this
action does not constitute a sexual harassment dispute because plaintiff only
alleges harassment based on pregnancy. The
EFAA provides, “The term ‘sexual harassment dispute’ means a dispute relating
to conduct that is alleged to constitute sexual harassment under
applicable Federal, Tribal, or State law.”
(9 U.S.C. § 401(4).) The
applicable State law, the Fair Employment and Housing Act (FEHA), defines “sex” to
include “[p]regnancy or medical conditions related to pregnancy.” (Gov. Code, § 12926(r)(1)(A).) FEHA provides that it is an unlawful for an
employer to harass an employee “because of” their status in any protected
class, including “sex.” (Gov. Code, §
12940(j)(1).) FEHA does not provide any
separate definition of “sexual harassment.”
Under applicable State law, pregnancy harassment is sexual harassment. The EFAA applies to this dispute.
When the Sexual
Harassment Dispute Arose
The EFAA “does not apply retroactively.”
(Murrey, supra, 87
Cal.App.5th at p. 1230.) It only applies
if the “sexual harassment dispute” arose after the law took effect on March 3,
2022. “[T]he date that a dispute has
arisen for purposes of the Act is a fact-specific inquiry in each case, but a
dispute does not arise solely from the alleged sexual conduct. A dispute arises when one party asserts a right,
claim, or demand, and the other side expresses disagreement or takes an
adversarial posture.” (Kader, supra,
99 Cal.App.5th at p. 222.) “Unlike a claim, however, a dispute does not
arise simply because the plaintiff suffers an injury; it additionally requires
a disagreement or controversy.” (Id. at p. 223.)
Plaintiff shows the sexual
harassment dispute arose after March 3, 2022.
She filed her administrative complaint with the former Department of
Fair Employment and Housing (DFEH) on April 22, 2022. (Gutierrez Decl., ¶ 4, Ex. B.) Nothing in the record shows any claim of
sexual harassment or disagreement about such a claim before she filed the DFEH
complaint. To the contrary, defendants’
sworn discovery responses state, “Claimant
did not make any complaint against Respondent during her employment.” (Gutierrez Decl., Ex. E, p. 12, response to
interrogatory No. 207.1(d).)
Defendants rely on the following allegation in
plaintiff’s complaint: “On March 10, 2020, OURIAN met with Plaintiff and told
her he would not be changing his decision on the bonus issue. OURIAN further stated that it was
non-negotiable that she begin using a timeclock to record her hours.” (Comp., ¶ 43; FAC, ¶ 43.) Assuming this allegation establishes a
disagreement or dispute, it is not a “sexual harassment dispute.” It is a sex discrimination dispute.
Discrimination concerns unequal terms and conditions of employment,
while “harassment focuses on situations in which the social
environment of the workplace becomes
intolerable because the harassment (whether verbal, physical, or visual)
communicates an offensive message to the harassed employee.” (Roby v. McKesson Corp. (2009)
47 Cal.4th 686, 706.) Allegedly not
paying plaintiff a bonus and requiring her to record her hours are terms and conditions
of employment, not offensive messages arising from the workplace’s social
environment. Defendants do not show that
any disagreement or adversarial posture about the alleged sexual harassment
arose before plaintiff filed her DFEH complaint on April 22, 2022.
Disposition
Plaintiff
Sara Simms’s motion for determination that predispute arbitration agreement is
invalid and unenforceable as to the sexual harassment dispute is granted. Under 9 U.S.C. § 402(b), the court hereby finds
that the parties’ predispute arbitration agreement is invalid and unenforceable
as to plaintiff’s sixth cause of action for “FEHA Hostile Work Environment” and
her seventh cause of action for “FEHA Harassment.”