Judge Bruce G. Iwasaki, Case Number: 24STCV06107, Date: 2024-08-22 Tentative Ruling

Tentative Ruling: The Motion to Compel Arbitration is denied.

In this employment action, Plaintiff Sarah Joiner (“Plaintiff”) filed a Complaint alleging a host of harassment, discrimination and retaliation causes of action against her former employers, Defendants Vista Del Mar Child and Family Services (Defendant), Sophia Washington, Verenda Houston, and Does 1 through 10 (collectively, Defendants).

On May 6, 2024, Defendants moved to compel arbitration pursuant to the parties’ arbitration agreement. Plaintiff opposed the motion.

The Court grants Plaintiff’s request for judicial notice of the following Congressional records: (1) 68 Cong. Rec. H983-09, 168, Cong. Rec. H983-09, H984, (2) 168 Cong. Rec. S624-01, 168Cong. Rec. S624-01, S628, and (3) Remarks by Vice President Harris At Signing of H. R 4445, "ending the Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021", 2022 WL 621746, at *1. (Request for Judicial Notice (RJN), Exhibits 1, 2, 3.)

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 an arbitration agreement presented to Plaintiff during onboarding. In support of the existence of an arbitration agreement, Defendant submits evidence that Plaintiff began working for Defendant as a Youth Development Counselor on September 3, 2020. (Decl. of Cassandra McDonald (“McDonald Decl.”, ¶ 2.) In connection with her employment, Plaintiff executed an agreement titled “Mutual Agreement to Arbitrate” (Arbitration Agreement), obligating her to arbitrate any employment-related disputes with Defendant. (McDonald Decl. ¶ 10, Ex. A.)

The Agreement provides that Plaintiff and Defendants mutually agreed that “any claim, dispute, and/or controversy of any kind between Employee and Employer…including but not limited to claims or controversies arising out of the employment relationship between Employee and Employer, past, present, or future, or its termination, shall be subject to final and binding arbitration.” (McDonald Decl. ¶ 10, Ex. A.)

Plaintiff submits no declaration of her own otherwise challenging Defendants’ evidence and contesting the authenticity of the Agreement or her signature. Thus, Defendants have met their burden of demonstrating the existence of a valid arbitration agreement.

II. Parties’ contentions regarding enforceability of arbitration agreement.

Plaintiff argues that this case cannot be compelled to arbitration based on the Ending the Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the EFAA).

The EFAA amends the Federal Arbitration Act (FAA).[1] In the EFAA, Congress prospectively permitted cases that include sexual harassment disputes from being subject to arbitration under the FAA. The statute 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).)

In seeking to enforce arbitration despite the EFAA, Defendants argue that thirteen of Plaintiff’s fifteen causes of action are unrelated to “sexual assault” or “sexual harassment”, making the gravamen of Plaintiff’s complaint insufficient to fall within the scope of the Act. (Mot., 13:23-28, 14:1-5.) Defendants rely on the EFAA’s legislative intent as “narrow and scoped to address sexual assault and sexual harassment cases,” and “[t]he language of this bill should be narrowly interpreted.” (EFAA, H.R. 4445, 168 Cong. Rec. S624-01; Mot., 14:6-16.)

In opposition, Plaintiff argues that the entire case is subject to the EFAA and thus not subject to arbitration. Plaintiff relies in part on Johnson v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 535 (Johnson). In Johnson, the district court held that “where a claim in a case alleges ‘conduct constituting a sexual harassment dispute,’ ... the EFAA …makes pre-dispute arbitration agreements unenforceable with respect to the entire case relating to that dispute.” (Id. at p. 561.)

Plaintiff’s complaint alleges conduct by Defendants constituting a sexual harassment dispute. It includes three causes of action for sex/gender-based harassment: (1) the second cause of action for discrimination based on sex/gender disparate treatment under Govt. Code § 12940 against Defendant, (Compl. ¶ 60-63), (2) the third cause of action for harassment based on sex/gender under Govt. Code § 12940 against Defendant and individual Defendants Sophia Washington and Verenda Houston (Compl. ¶ 64-68), and (3) the fourteenth cause of action for failure to prevent and stop harassment, discrimination, and retaliation under Govt. Code § 12940(j), (k) by Plaintiff against Defendant. (Compl. ¶ 116-119.)

In relevant part, Plaintiff alleges that she was subject to a hostile work environment due to the alleged sexual harassment. (Compl. ¶ 13.) “To establish a prima facie case of a [] hostile work environment [due to sex], [a plaintiff is] required to show that (1) [s]he was a member of a protected class; (2) [s]he was subjected to unwelcome [sexual] harassment; (3) the harassment was based on [sex]; (4) the harassment unreasonably interfered with his work performance by creating an intimidating, hostile, or offensive work environment; and (5) the [defendant] is liable for the harassment.” (Thompson v. City of Monrovia (2010) 186 Cal.App.4th 860, 876.) Here, the alleged conduct consisted of:

a) Defendant Washington made comments about Plaintiff’s appearance including (i) “Oh, her hair is combed today,” (ii) “Her pants are too tight,” (iii) “She’s always got something on tight,” and (iv) “Why is her hair in a bun.” (Compl. ¶ 18.)

b) Defendant Washington also alleged Plaintiff was promiscuous, including but not limited, “She’s fucking all these men.” (Compl. ¶ 18.)

c) Defendants Washington and Verenda made comments alleging Plaintiff was pregnant, when Plaintiff was not pregnant. The comments included: (i) “Look, she’s hiding her pregnancy,” (ii) “She’s wearing that sweater around her waist because she’s hiding being pregnant,” (iii) “She’s about to have one too, only reason she’s trying to go back to school is because you are trying to have a baby,” (iv) “She went to Las Vegas with another man, that’s how she got pregnant,” (v) “Her man left her, now she’s pregnant by herself,” (vi) “She’s going around sleeping with other guys.” (Compl. ¶ 23)

d) Defendant assigned Behavioral Aid Jennifer LNU to work with Plaintiff, Jenniffer regularly made comments alleging Plaintiff was pregnant, such as (i) “He must be really horny to get you pregnant,” (ii) “That’s why they’re gonna fire you, you’re going to the bathroom so much,” (iii) “Every time going to the bathroom you’re there to fart.” (Compl. ¶ 27.)

e) Defendant Washington alleged that Plaintiff slept with her co-worker. (Compl. ¶ 28.)

f) Defendants knew or reasonably should have known of the harassment, discrimination and retaliation against Plaintiff. (Compl. ¶ 117.)

With these averments and others, Plaintiff has alleged Defendants’ acts of sexual harassment within the EFAA. Moreover, the timing of most of the harassment occurred after the EFAA was enacted on March 3, 2022.

Defendants contend that non-sexual harassment causes of action outnumber the sexual harassment causes of action, and thus, the EFAA does not apply and arbitration should be compelled. They offer no judicial authority for the proposition. To order arbitration of conceded sexual harassment claims would be contrary to Congress’s express mandate.

The sole question here is whether the EFAA compels the Court to deny the motion to compel arbitration in its entirety, or deny it only as to claims expressly labeled as “sexual harassment.” Contrary to Defendants’ contentions, the case law supports denying arbitration for a “case” such as this one, “which is filed under Federal, Tribal or State law and relates to the … sexual harassment dispute.” (9 U.S.C. § 402(a).)

In Johnson v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 535, 559, the district court held that “the 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 Johnson, plaintiff brought racial and pay discrimination claims in addition to sexual harassment claims. The district court concluded that those racial and pay discrimination claims were protected by the EFAA because they were part of a case that plausibly alleged sexual harassment claims. Rejecting the argument Defendant advances here, the Johnson court carefully analyzed Congressional intent. “Congress’s choice to amend the FAA directly with text broadly blocking enforcement of an arbitration clause with respect to an entire ‘case’ ‘relating to’ a sexual harassment dispute reflects its rejection – in this context – of the FAA norm of allowing individual claims in a lawsuit to be parceled out to arbitrators or courts depending on each claim’s arbitrability.” (Id. at p. 561.) Accordingly, the court denied the motion to compel arbitration of all or part of the case. It held that “where a claim in a case alleges ‘conduct constituting a sexual harassment dispute,’ as defined, the EFAA, at the election of the party making such an allegation, makes pre-dispute arbitration agreements unenforceable with respect to the entire case relating to that dispute.” (Ibid.)

Johnson has been followed in multiple decisions. (See Delo v. Paul Taylor Dance Foundation, Inc. (S.D.N.Y. 2023) 685 F.Supp.3d 173, 185 [because plaintiff “plausibly pled sexual harassment violations,…the EFAA applies to block arbitration of all her claims; rejecting defendants’ argument that EFAA is inapplicable because none of the claims were “styled as ‘sexual harassment’ claims.”]; Molchanoff v. SOLV Energy, LLC (S.D. Cal. Mar.1, 2024, 23cv653-LL-DEB) 2024 WL 899384 at *5 [regarding complaint that alleged five claims in addition to sexual harassment, because retaliation claim alleged sexual harassment, and “because the case as a whole relates to that dispute, the EFAA bars enforcement of the arbitration agreement…as to all claims in this case, and as to all Defendants in this case”]; Mulugu v. Duke University School of Medicine (M.D. N.C. Aug. 7, 2024, 1:23CV957) 2024 WL 3695220 *28 [because “case as a whole relates to [sexual harassment] dispute, [EFAA] bars enforcement of the arbitration agreement…as to all claims in this case”]; Baldwin v. TMPL Lexington LLC (S.D.N.Y. Aug. 19, 2024, 23 Civ. 9899 (PAE)) 2024 WL 3862150 *7 [following Johnson and denying motion to compel arbitration including as to wage and hour claims].)

Of particular note here is a California federal court decision that also follows Johnson. In Turner v. Tesla, Inc. (N.D. Cal. 2023) 686 F.Supp.3d 917, plaintiff alleged, in addition to sexual harassment claims, federal and state wage and hour claims. Judge Orrick rejected defendant’s argument that the non-sexual harassment claims should be arbitrated. “The EFAA, in contrast to the FAA, demonstrates Congress’s preference that plaintiffs alleging sexual harassment be permitted to be heard in court and not be compelled to arbitration.” (Id. at p. 925.) The court found that “the arbitration agreement is unenforceable with respect to [plaintiff’s] entire case because the core of her case alleges ‘conduct constituting a sexual harassment dispute’ as defined by the EFAA.” (Ibid.) In this case, Ms. Joiner alleges no wage and hour claims; all concern harassment, retaliation, and discrimination in the workplace.

In their reply memorandum Defendants misrepresent the law. They claim: “The case law addressing the EFAA carve-out issue holds that non-arbitrable claims under the EFAA should be carved out from the claims subject to arbitration.” (Reply p. 5.) As described above, the case authority is to the contrary. None of the cases Defendants cite support their argument that the EFAA is inapplicable here, or that it requires arbitration of non-sexual harassment claims.

Johnson v. Everyrealm, as we have seen, holds precisely the opposite of what Defendants assert it says. (657 F. Supp.3d at p. 561.) Another case decided the same day, by the same judge, against the same employer, also offers Defendants no help. In Yost v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 563, the court found that plaintiff failed plausibly to allege a sexual harassment claim. As a result, those claims were dismissed, and “EFAA no longer has any bearing on this litigation.” (Id. at p. 588.) Yost, therefore, did not address the issue here. Defendants also rely on K.T. v. A Place for Rover (E.D. Pa. Oct. 31, 2023, 23-02858) 2023 WL 7167580. But in that case, no sexual harassment claim was alleged; the violations were for human trafficking and wiretapping.

Defendants also rely on Mera v. SA Hospitality Group, LLC (S.D.N.Y. 2023) 675 F.Supp.3d 442. There the plaintiff brought, in addition to sexual harassment claims, wage and hour violations on behalf of a putative class. The court denied arbitration for the harassment claims, but concluded that the group claims – on behalf of all non-exempt employees – were not “distinct to Plaintiff.” (Id. at p. 448.) Ms. Joiner alleged no wage and hour claims, and did not file a class action or PAGA suit. Mera did sever the harassment claims from non-harassment claims, but for reasons inapplicable here.

Congressional intent, and the weight of judicial authority, require denying Defendant’s motion to compel arbitration.

[1] Defendants take the position that the “… the nature of Plaintiff’s claims fall squarely within the purview of the Arbitration Agreement and should be compelled to arbitration under the FAA.” (Mot., 13:12-14.)

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