Judge Barbara M. Scheper, Case Number: 22STCV14857, Date: 2023-11-09 Tentative Ruling

Judge: Barbara M. Scheper, Case: 22STCV14857, Date: 2023-11-09 Tentative Ruling

Case Number: 22STCV14857 Hearing Date: November 9, 2023 Dept: 30

Dept. 30

Calendar No.

Morgan vs. Norms Restaurants, LLC, et. al., Case No. 22STCV14857

Tentative Ruling re: Defendant’s Motion to Compel Arbitration

Defendant Norms Restaurants, LLC (Defendant) moves to compel Plaintiff Stephen Morgan (Plaintiff) to arbitration and stay this action pending completion of arbitration. The motion is granted.

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement.” (Code Civ. Proc. §1281.2, subds. (a), (b).)

A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479.) Such enforcement may be sought by a party to the arbitration agreement. (Code Civ. Proc., § 1280, subd. (e)(1).)

The petition to compel arbitration functions as a motion and is to be heard in the manner of a motion, i.e., the facts are to be proven by affidavit or declaration and documentary evidence with oral testimony taken only in the court’s discretion. (Code Civ. Proc., §1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413–414.) The petition to compel must set forth the provisions of the written agreement and the arbitration clause verbatim, or such provisions must be attached and incorporated by reference. (Cal. Rules of Court, rule 3.1330; see Condee v. Longwood Mgmt. Corp. (2001) 88 Cal.App.4th 215, 218 (Condee).)

Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement, and no evidence or authentication is required to find the arbitration agreement exists. (See Condee, supra, 88 Cal.App.4th at p. 219.) However, if the existence of the agreement is challenged, “petitioner bears the burden of proving [the arbitration agreement’s] existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413; see also Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058–1060.)

Defendant moves to compel arbitration of Plaintiff’s claims based on the “California Employee Arbitration Agreement” (the Agreement) signed by Plaintiff on July 25, 2018. The Agreement provides in relevant part as follows:

[B]oth you [Plaintiff] and the Company agree that any claim that you may have against the Company or its owners, directors, officers, managers, employees, agents . . . or the Company or such Affiliated Persons may have against you shall be submitted to and determined exclusively in the County in which you worked for the Company by a single neutral arbitrator through to final and binding arbitration pursuant to the Federal Arbitration Act, and not to any court . . .

(Durrani Decl. ¶ 8, Ex. A.)

Plaintiff does not dispute the existence of the arbitration agreement or the application of the Agreement to his claims in this action. Plaintiff opposes this motion solely on the basis that the Agreement is unenforceable under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). (9 U.S.C. §§ 401-402.)

The EFAA, effective March 3, 2022, amended the Federal Arbitration Act (FAA) to bar enforcement of predispute arbitration agreements in “a case which is filed under Federal, Tribal, or State law” that relates to a “sexual assault dispute” or “sexual harassment dispute.” (9 U.S.C. § 402(a).) The term “sexual harassment dispute” is defined as “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 application of the EFAA to a dispute “shall be determined under Federal law” and “shall be determined by a court, rather than an arbitrator,” regardless of any contrary provision in the challenged agreement. (9 U.S.C. § 402(b).)

Based on the EFAA’s statutory language and purposes, district courts have concluded that a plaintiff seeking to invoke the EFAA must first plead a claim for sexual assault or sexual harassment “under applicable Federal, Tribal, or State law" sufficient to survive a motion to dismiss under FRCP Rule 12(b)(6). (See Yost v. Everyrealm, Inc. (S.D.N.Y., Feb. 24, 2023) 2023 WL 2224450, at *16; Turner v. Tesla, Inc. (N.D. Cal., Aug. 11, 2023) 2023 WL 6150805, at *5-6; K.T. v. A Place for Rover (E.D. Pa., Oct. 31, 2023) 2023 WL 7167580, at *5 [citing Yost].) If a sexual harassment dispute or sexual assault dispute is sufficiently pled, the EFAA’s “invalidation of an arbitration agreement extends to the entirety of the case relating to the sexual harassment dispute, not merely the discrete claims in that case that themselves either allege such harassment or relate to a sexual harassment dispute (for example, a claim of unlawful retaliation for a report of sexual harassment).” (Johnson v. Everyrealm, Inc. (S.D.N.Y., Feb. 24, 2023) 2023 WL 2216173, at *18; Turner, supra, 2023 WL 6150805 at *5.)

Accordingly, here, Plaintiff must sufficiently allege conduct “constitut[ing] sexual harassment [or sexual assault] under applicable Federal, Tribal, or State law” before invoking the EFAA to invalidate the parties’ arbitration agreement. (9 U.S.C. § 401(4).) If Plaintiff properly alleges a “sexual harassment dispute” or “sexual assault dispute,” the predispute arbitration agreement is barred as to any claim that “relates to the . . . dispute” (9 U.S.C. § 402(a)), even if the claim is not itself for sexual harassment or sexual assault. (Johnson, supra, 2023 WL 2216173 at *18.)

Sexual harassment is prohibited by the Fair Employment and Housing Act (FEHA) under California law (Gov. Code § 12940, subd. (a)), and by title VII of the Civil Rights Act of 1964 under federal law (42 U.S.C. § 2000e, et seq.). Courts generally distinguish between two categories of sexual harassment: “quid pro quo harassment, where a term of employment or employment itself is conditioned upon submission to unwelcome sexual advances”; and hostile work environment, “where the harassment is sufficiently pervasive so as to alter the conditions of employment and create an abusive work environment.’ ” (Beyda v. City of Los Angeles (1998) 65 Cal.App.4th 511, 516–17.)

“In evaluating a sexual harassment claim based upon a hostile work environment, two things must be determined: has the employee been subjected to a hostile work environment and, if so, is the employer liable for the harassment that caused the hostile work environment?” (Sheffield v. Los Angeles County Dept. of Social Services (2003) 109 Cal.App.4th 153, 162.) “[T]he question of whether or not there is a hostile work environment must be determined from the totality of the circumstances. . . . In making this determination the trier of fact should consider, ‘(1) the nature of the unwelcome sexual acts or words (with physical touching generally considered more offensive than mere words); (2) the frequency of the offensive acts or encounters; (3) the total number of days over which all the offensive conduct occurred; and (4) the context in which the sexually harassing conduct occurred.’ ” (Ibid.) “In determining what constitutes ‘sufficiently pervasive’ harassment, the courts have held that acts of harassment cannot be occasional, isolated, sporadic, or trivial, rather the plaintiff must show a concerted pattern of harassment of a repeated, routine or a generalized nature.” (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 610.)

Here, Plaintiff was allegedly employed by Defendant as a general manager. (Comp. ¶ 7.) On October 30, 2022, while reviewing camera footage of a prior night shift, Plaintiff “noticed that a male cashier was looking at a video of scantily dressed women while working in an open area within the restaurant.” (Comp. ¶ 11.) Plaintiff also saw “a female employee near the cashier to whom the phone was visible.” (Comp. ¶ 11.) Earlier that year, the female employee had complained that she was subjected to an unwanted touching by a co-worker. (Comp. ¶ 11.) “Because he wanted to assure that his restaurant and the employees he supervised were not subject to . . . sexual harassment of any kind,” Plaintiff called the male cashier in and issued him a written warning for use of his phone and sexual harassment. (Comp. ¶ 11.) Plaintiff alleges that he was later terminated in part for reporting the cashier’s misconduct. (Comp. ¶ 14.)

The Court finds that Plaintiff has failed to allege a “sexual harassment dispute” under the EFAA. The alleged conduct relates to Plaintiff’s retaliation and wrongful termination claims – Plaintiff’s report of one incident in which a male cashier viewed “a video of scantily dressed women” near a female employee (Comp. ¶ 11). This shows only “occasional, isolated, sporadic, or trivial” harassment, rather than any “concerted pattern of harassment.” (Fisher, supra, 214 Cal.App.3d at 610.) This is insufficient to “constitute sexual harassment under applicable Federal, Tribal, or State law.” (9 U.S.C. § 401(4).) Consequently, the EFAA does not apply to Plaintiff’s claims, and the parties’ arbitration agreement is enforceable.