Judge Bruce G. Iwasaki, Case Number: 23STCV28419, Date: 2024-03-28 Tentative Ruling

Tentative Ruling: The Motion to Compel Arbitration is denied.

In this employment action, Plaintiff Lizbeth Parra (Plaintiff) filed a Complaint on November 20, 2023, alleging causes of action for FEHA violations and violations of the Labor Code against her former employers, Defendants the Cheesecake Factory Inc., and the Cheesecake Factory Restaurant, Inc. (collectively, Defendants).

On January 22, 2024, Defendants filed a motion to compel arbitration pursuant to the parties’ arbitration agreement. Plaintiff opposed the motion. Defendants filed a reply.

Defendants’ request for judicial notice of Exhs. A-B is granted. (Evid. Code, § 452, subd. (c).)

Under Code of Civil Procedure section 1281.2, a court may order arbitration of a controversy if it finds that the parties have agreed to arbitrate that dispute. Because the obligation to arbitrate arises from contract, the court may compel arbitration only if the dispute in question is one in which the parties have agreed to arbitrate. (Weeks v. Crow (1980) 113 Cal.App.3d 350, 352.) Since arbitration is a favored method of dispute resolution, arbitration agreements should be liberally interpreted, and arbitration should be ordered unless the agreement clearly does not apply to the dispute in question. (Id. at p. 353; Segal v. Silberstein (2007) 156 Cal.App.4th 627, 633.)

Defendants move to compel arbitration of Plaintiff’s claims and stay the action while the arbitration is pending.

Defendants seek to compel arbitration based on the parties’ arbitration agreement. In support of the existence of an arbitration agreement, Defendants submit evidence that Plaintiff began working for Defendants as a Server at Defendant Cheesecake’s restaurant located in Temecula, California on July 1, 2021. (Lambert-Gaffney Decl., ¶ 5.) In connection to her employment, Plaintiff executed an agreement titled “Mutual Agreement to Arbitrate Claims.” (Arbitration Agreement), obligating her to arbitrate any employment-related disputes with Defendants. (Lambert-Gaffney Decl., ¶ 5, Ex. A.)

The Agreement provides that Plaintiff and Defendants mutually agreed “to arbitrate before a neutral arbitrator any and all disputes or claims between the Company and me that arise out of or relate to my recruitment, employment or separation from employment with the Company (currently existing or which may arise in the future), including claims involving and/or against any current or former . . . agent or employee of the Company, . . . whether the disputes or claims arise under common law, in tort, in contract, or pursuant to a statute, regulation, or ordinance now in existence or which may in the future be enacted or recognized, . . . including, but not limited to, the following claims: Claims for wrongful termination of employment, retaliation, violation of public policy, constructive discharge, . . . discrimination, . . . , and any other tort or tort-like causes of action relating to or arising from the employment relationship or the formation or termination thereof; . . . Claims under any and all federal, state, or municipal statutes, regulations, or ordinances, including but not limited to laws that prohibit discrimination, harassment, or retaliation in employment (for example, those related to or based upon but not limited to, a person's race, sex, religion, national origin, age, marital status, medical condition, disability or being in another protected class) . . ..” (Lambert-Gaffney Decl., ¶ 5, Ex. A, 1-2.)

In opposition, Plaintiff does not dispute the existence of this Arbitration Agreement or otherwise contend that her claims do not fall within the scope of this Arbitration Agreement. Thus, Defendants have met their burden of demonstrating the existence of a valid arbitration agreement between the parties.

Instead, in opposition, Plaintiff argues her claims cannot be compelled to arbitration based on the Ending the Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act or EFAA).

The EFAA amends the FAA.[1] The EFAA provides, “[A]t the election of the person alleging conduct constituting a sexual harassment dispute ... no predispute arbitration agreement ... shall be valid or enforceable with respect to a case which is filed under ... State law and relates to ... the sexual harassment dispute.” (9 U.S.C. § 402(a).) “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).) “An issue as to whether this chapter applies with respect to a dispute shall be determined under Federal law.” (9 U.S.C. § 402(b).)

As a preliminary matter, Plaintiff argues that her Complaint is subject to the EFAA based on her allegations of sexual assault and sexual harassment by Defendant Tang during her employment with Defendants. (Compl., ¶¶ 10-14.)

Defendants challenge the application EFAA to Plaintiff’s Complaint on multiple grounds.

First, Defendants argue that Plaintiff does not allege facts showing that any alleged sexual harassment or sexual assault occurred on or after March 3, 2022 – the effective date of the EFAA.

“The EFAA was enacted on March 3, 2022, and does not have retroactive effect.” (Turner v. Tesla, Inc. (N.D. Cal., Aug. 11, 2023, No. 23-CV-02451-WHO) 2023 WL 6150805, at *4.) Thus, the EFAA applies only to disputes or claims that arise or accrue on or after its date of enactment, March 3, 2022. (Molchanoff v. SOLV Energy, LLC (S.D. Cal., Mar. 1, 2024, No. 23CV653-LL-DEB) 2024 WL 899384, at *2.)

Here, Plaintiff alleges the purported “sexual advances” occurred “[d]uring her employment,” which began “in or around July 1, 2021.” (Compl., ¶¶ 9-10.) Admittedly, the Complaint does not identify any specific sexual harassment conduct that occurred after March 3, 2022.

However, Plaintiff relies on how cases – specifically Kader v. Southern California Medical Center, Inc. (2024) 99 Cal.App.5th 214 – have defined “dispute” as opposed to “claim” for the purposes of whether the Act applies to specific action.

“The EFAA defines two types of disputes: a “sexual assault dispute” which is “a dispute involving a nonconsensual sexual act or sexual contact,” 9 U.S.C. § 401(3), and a “sexual harassment dispute” which is “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).” (Molchanoff v. SOLV Energy, LLC (S.D. Cal., Mar. 1, 2024, No. 23CV653-LL-DEB) 2024 WL 899384, at *2.)

In Kader v. Southern California Medical Center, Inc., the court held “the Act applies to ‘any dispute or claim that arises or accrues on or after the date of enactment of this Act.’ (Pub.L. No. 117-90, § 3, reprinted in notes foll. 9 U.S.C. § 401.)” The court in Kader further explained that a “dispute” is distinct from a claim (which “arises for the first time when the plaintiff suffers an injury”) and requires more than an injury; a “dispute” in Kader did not rise until the plaintiff filed charges with the DFEH.

Here, Plaintiff argues there are no allegations that any dispute existed until Plaintiff filed charges with the California Civil Rights Department and her lawsuit on November 20, 2023. (Compl., ¶ 15.) Thus, for similar reasons as stated in Kader, Plaintiff’s case was filed after the effective date of the EFAA.

In reply, Defendants argue that Kader was wrongly decided. This argument is not well taken. This Court is bound by this appellate decision. (Sarti v. Salt Creek Ltd. (2008) 167 Cal.App.4th 1187, 1193 [“All trial courts are bound by all published decisions of the Court of Appeal . . ..”].)

Secondly, Defendants argue that the EFAA only applies to the sexual harassment related claims and Plaintiff’s eight other claims must be compelled to arbitration.[2]

This argument is also not well taken; the EFAA precludes arbitration of all the other claims of the Complaint, as well.

In Johnson v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 535, 558-559, the district court explained that the EFAA unambiguously applied to the entire “case” relating to the sexual harassment dispute. “[T]he text of § 402(a) makes clear that its 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).” In that case, plaintiff brought racial and pay discrimination claims in addition to sexual harassment claims and, under the court’s holding, those racial and pay discrimination claims were protected by the EFAA because they were part of a case that plausibly alleged sexual harassment claims.

Similarly, in Turner v. Tesla, Inc. (N.D. Cal., Aug. 11, 2023, No. 23-CV-02451-WHO) 2023 WL 6150805, the court found that the plaintiff’s “workplace injury and wage claims relate only to her own experience and employment at Tesla—and are intertwined with her sexual harassment claims.” (Id. at p. *5.)

Thus, all of Plaintiff’s claims are subject to the EFAA and are non-arbitrable.

[1] Defendants take the position that the Federal Arbitration Act (FAA) applies to its Arbitration Agreement with Plaintiff. (Mot., 3:14-4:14.)

[2] Plaintiff fails to address this argument in her Opposition.

Department 58