Judge: Armen Tamzarian, Case: 23STCV07947, Date: 2023-08-21 Tentative Ruling

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Case Number: 23STCV07947    Hearing Date: August 21, 2023    Dept: 52

Defendants HRB Green Resources, LLC and Irma Rios’s Motion to Compel Arbitration and Stay Action

Defendants HRB Green Resources, LLC and Irma Rios move to compel arbitration and stay this action by plaintiff Jose Aguilar.  The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), however, bars predispute arbitration agreements relating “sexual harassment disputes.”  (9 USA § 402, subd. (a).)  Because this is such a dispute, plaintiff cannot be compelled to arbitration. 

Defendants argue the EFAA does not apply because the law is not retroactive, and plaintiff’s cause of action for harassment accrued before it was enacted.  The court agrees the EFAA “does not apply retroactively.”  (Murrey v. Superior Court (2023) 87 Cal.App.5th 1223, 1230 (Murrey).)  Instead, the law applies “with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act.”  (136 Stat. 26, § 3; PL 117-50.)  The statute was enacted on March 3, 2022. 

No binding authority has decided whether the EFAA applies to cases filed after it was enacted but where the cause of action accrued before its enactment.  (See Murrey, supra, 87 Cal.App.5th at p. 1235 [discussing but not deciding the issue]; see also Walters v. Starbucks Corp. (S.D.N.Y. 2022) 623 F.Supp.3d 333, 337 (Walters) [holding the EFAA did not apply when “each claim arose or accrued before March 3, 2022]; Hodgin v. Intensive Care Consortium, Inc. (S.D. Fla. 2023) 2023 WL 2751443 [disagreeing with Walters].)  For purposes of this motion, the court will assume (without deciding) the EFAA only applies to a “sexual assault dispute” that arose or accrued before March 3, 2022.

A “cause of action accrues” when the plaintiff ‘ “is entitled to begin and prosecute an action thereon.” ’ ”  (Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487.)  Generally, a FEHA “claim challenging a termination accrues at the time the employee is actually terminated.”  (Acuna v. San Diego Gas & Electric Co. (2013) 217 Cal.App.4th 1402, 1418.)

Plaintiff alleges defendants harassed him because of his gender, gender identity, and gender expression.  (Comp., ¶ 25.)  He further alleges that on February 5, 2022, he “was transferred to the Simi Valley H&R Block location with the same pay, where he did not experience any harassment or discrimination.”  (¶ 16.)  Plaintiff also alleges he was terminated on April 22, 2022 (¶ 23) because of his gender, gender identity, and gender expression (¶ 32) and in retaliation for his protected activity of complaining about harassment and discrimination (¶ 38).

Defendant contends plaintiff’s first cause of action for harassment accrued when the harassment ended on February 5, 2022.  Plaintiff contends that cause of action accrued upon his termination on April 22, 2022.  The court finds that, regardless of when the first cause of action for harassment accrued, the “sexual harassment dispute” as defined under the EFAA accrued when plaintiff was terminated. 

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).)  Had Congress intended to limit the EFAA to causes of action for sexual harassment, it could have done so.  It instead broadly defined “sexual harassment dispute” to include “a dispute relating to” alleged sexual harassment. 

Plaintiff’s causes of action for discrimination, retaliation, and failure to prevent discrimination, harassment, and retaliation are disputes relating to the conduct alleged to constitute sexual harassment.  He alleges HRB terminated him in retaliation for complaining about Rios’s sexual harassment.  He alleges HRB failed to prevent that retaliation.  The alleged sexual harassment thus instigated this entire dispute between plaintiff and defendants.  At least part of the “sexual harassment dispute” accrued when plaintiff was terminated—after the EFAA was enacted.  The EFAA therefore bars compelling arbitration of this action.

Finally, defendant argues plaintiff cannot rely on the date of his termination because he “was separated from his seasonal employment at the end of the tax season” as “explicitly contracted for at the beginning of his employment.”  (Reply, p. 3.)  This is an argument on the merits—that plaintiff’s cause of action for termination fails, not that it did not accrue on April 22, 2022.  Arguments on the merits are not relevant at this stage.  Moreover, employees on term contracts with “no right to have [their] contract renewed” are still entitled to “FEHA’s protections.”  (Swanson v. Morongo Unified School Dist. (2014) 232 Cal.App.4th 954, 967.)  The right not to renew an employee’s contract does not “otherwise allow[]” an employer “to unlawfully discriminate against” an employee if the employer “exercised the powers it had in an unlawful and discriminatory manner.”  (Ibid.)

Disposition

Defendants HRB Green Resources, LLC and Irma Rios’s motion to compel arbitration and stay the action is denied.