Judge: Carolyn M. Caietti, Case: 37-2023-00011557-CU-WT-CTL, Date: 2023-08-18 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - August 17, 2023

08/18/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Wrongful Termination Motion Hearing (Civil) 37-2023-00011557-CU-WT-CTL CLARK VS 24 HOUR FITNESS USA LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Confirm Arbitration Award, 04/24/2023

Defendants 24 Hour Fitness USA, LLC and Eddie De La Cruz's Motion to Compel Arbitration is DENIED.

In this lawsuit, Plaintiff, a 34-year old male of Asian descent, alleges Defendant 24 Hour Fitness USA, LLC (24 Hour) employed him and Defendant Eddie De La Cruz, who subjected Plaintiff to harassment based on race and sex. Plaintiff alleges De La Cruz used sexist and racial slurs, made bigoted and demeaning jokes and racist impersonations of Asian nail salon workers, made sexually inappropriate comments to women working out and at the gym and would regularly have sex with a gym member in an office or maintenance room. Despite 24 Hour's knowledge of the alleged harassment and Plaintiff's reporting of the harassment, 24 Hour terminated Plaintiff's employment.

Plaintiff's Complaint asserts causes of action for: (1) hostile work environment – harassment based on race and sex; (2) failure to prevent harassment and retaliation; (3) retaliation for reporting harassment; (4) sexual harassment (hostile work environment); (5) retaliation in violation of Labor Code section 1102.5(b); (6) wrongful termination in violation of public policy; (7) failure to timely pay all wages; (8) failure to provide accurate wage statements; (9) failure to timely pay wages due at termination; (10) failure to provide rest breaks or premium pay in lieu thereof. As raised in Plaintiff's Complaint and opposition to this motion, this is the second case the Court has heard relating to alleged sexual harassment by Defendant De La Cruz.

In this motion, Defendants move to compel arbitration under the Federal Arbitration Act (FAA). The parties agree: (i) an arbitration agreement exists; and (ii) the FAA applies. The dispute concerns the application of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). (9 U.S.C. §§ 401-402.) Under the EFAA, a plaintiff 'alleging conduct constituting a sexual harassment dispute or sexual assault dispute' may elect to render a pre-dispute arbitration agreement applicable to their case invalid and unenforceable. (9 U.S.C. § 402(a).) As the EFAA became effective just over a year ago, there is limited interpretive caselaw. The parties have not identified relevant California caselaw.

In Johnson v. Everyrealm, Inc, where the Southern District of New York examined whether an arbitration clause was unenforceable as to the operative complaint's sexual harassment claims only or to the entire case, which alleged other claims for race discrimination, pay discrimination and IIED. Johnson held, '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.' (Johnson v. Everyrealm, Inc.

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2965618  47 CASE NUMBER: CASE TITLE:  CLARK VS 24 HOUR FITNESS USA LLC [IMAGED]  37-2023-00011557-CU-WT-CTL (S.D.N.Y., Feb. 24, 2023, No. 22 CIV. 6669 (PAE)) 2023 WL 2216173, at *19.) The court reasoned: 'This text is clear, unambiguous, and decisive as to the issue here. It keys the scope of the invalidation of the arbitration clause to the entire 'case' relating to the sexual harassment dispute. It thus does not limit the invalidation to the claim or claims in which that dispute plays a part.' (Johnson, supra, at * 17.) Further, '[w]ith the ordinary meaning of 'case; in mind, 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).' (Johnson, supra, at *18.) Here, first, Plaintiff sufficiently plead sexual harassment. (See, Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264 [the plaintiff generally must show the harassment directed at others was in their immediate work environment, and that they personally witnessed it]; see also, Singleton v. United States Gypsum Co. (2006) 140 Cal.App.4th 1547, 1564 [sexual harassment occurs when sex is used as a weapon to create a hostile environment; harassing conduct need not be motivated by sexual desire to support an inference of discrimination on the basis of sex].) The allegations show De La Cruz's conduct permeated Plaintiff's direct work environment and that he personally witnessed it.

Second, all of the causes of action relate to a 'sexual harassment' dispute. The first cause of action is for harassment based on race and sex. The general allegations include facts regarding sexual harassment and, as argued by Plaintiff in opposition, the claim is premised on sexual harassment, including De La Cruz regularly calling Plaintiff names, forcing him to listen to vulgar stories about his sexual conquests, performing racist and sexist impersonations of an Asian nail salon worker, making sexually degrading jokes about female coworkers and threatening Plaintiff that he should not bring his girlfriend around the gym.

The second cause of action for failure to prevent harassment and retaliation expressly states Defendants knew about 'De La Cruz's racial and sexual harassment of Mr. Clark' and failed to take reasonable steps to prevent such harassment. (Complaint, at ¶ 53.) The third cause of action for retaliation for reporting harassment expressly states Plaintiff opposed De Le Cruz's harassment and made 'several protected complaints to 24 Hour Fitness regarding Mr. De La Cruz's sexual and racial harassment' but that 24 Hour Fitness took no action to correct the harassment and retaliated against Plaintiff. (Complaint, at ¶¶ 60-61.) This is sufficient.

The fourth cause of action for sexual harassment (hostile work environment) relates to sexual harassment. (Complaint, at ¶¶ 67-76.) The fifth cause of action for retaliation in violation of Labor Code section 1102.5(b) expressly refers to sexual harassment and how Plaintiff made protected complaints about De La Cruz's harassment and Defendants retaliated against Plaintiff. (Complaint, at ¶¶ 26-28, 35, 79-80.) The sixth cause of action for wrongful termination in violation of public policy refers to the alleged unlawful and harassing conduct. (E.g., Complaint, at ¶ 88.) The seventh through tenth causes of action allege Defendants failed to timely pay wages, provide accurate wage statements, timely pay wages due at termination and provide rest breaks. These causes of action do not expressly refer to the harassment allegations, but as argued by Plaintiff in opposition, these claims stem from unpaid hours Plaintiff worked, in part because De La Cruz shirked his management responsibilities by sexually harassing women at the gym, leaving for long periods of his shift to have sex with women and hit on women. This caused Plaintiff to miss meal periods, stay late and work unpaid hours, making them relate to the alleged sexual harassment.

Thus, each cause of action relates to sexual harassment and the EFAA applies to bar the entire case, Calendar No.: Event ID:  TENTATIVE RULINGS

2965618  47 CASE NUMBER: CASE TITLE:  CLARK VS 24 HOUR FITNESS USA LLC [IMAGED]  37-2023-00011557-CU-WT-CTL making the arbitration agreement unenforceable to this case.

For these reasons, the motion is DENIED.

The Case Management Conference remains on calendar.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final ruling.

Defendants are ordered to serve written notice of the Court's final ruling on all parties by August 22, 2023.

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