Judge: Daniel S. Murphy, Case: 24STCV12145, Date: 2024-08-19 Tentative Ruling

Case Number: 24STCV12145    Hearing Date: August 19, 2024    Dept: 32

BACKGROUND

            On May 14, 2024, Plaintiff Daisy Solano filed this employment discrimination action against Defendants Hawaiian Gardens Casino and Nicholas Bolger. Plaintiff filed the First Amended Complaint on May 31, 2024.

            On July 25, 2024, Defendants filed the instant motion to compel arbitration. Plaintiff filed her opposition on August 6, 2024. Defendants filed their reply on August 14, 2024.

LEGAL STANDARD

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that 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….” (Code Civ. Proc, § 1281.2.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

DISCUSSION

I. Proof of Agreement

            “The moving party ‘can meet its initial burden by attaching to the motion or petition a copy of the arbitration agreement purporting to bear the opposing party's signature.’” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)

            Here, Plaintiff signed an “Agreement to Arbitrate” on June 15, 2020, covering “any and all disputes, claims or controversies arising out of or relating to this Agreement, the employment relationship between the parties, or the termination of the employment relationship.” (Fausto Decl., Ex. A.) The agreement specifically identifies wrongful termination, discrimination, retaliation, and harassment as the types of claims within its coverage. (Ibid.) The agreement covers “any claims the Company may have against Employee, or that Employee may have against the Company or any of its officers, directors, employees, agents, parents, subsidiaries, or affiliated entities.” (Ibid.)

            Plaintiff does not dispute the existence of the agreement, its terms, or her signature on it. Thus, Defendants have satisfied their initial burden of proving the existence of an arbitration agreement covering the claims at issue.

II. Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA)

            a. Statutory Framework

The EFAA provides that “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.” (9 U.S.C. § 402.) “The term ‘predispute arbitration agreement’ means any agreement to arbitrate a dispute that had not yet arisen at the time of the making of the agreement.” (Id., § 401(1).) “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.” (Id., § 401(4).)

            b. Application to “Disputes” Arising After March 3, 2022

The EFAA applies “to any dispute or claim that arises or accrues on or after March 3, 2022.” (9 U.S.C. § 401.) “[T]he date that a dispute has arisen for purposes of the Act depends on the unique facts of each case, but a dispute does not arise merely from the fact of injury” or “solely from the alleged sexual conduct.” (Kader v. Southern California Medical Center, Inc. (2024) 99 Cal.App.5th 214, 218, 222.) Instead, “[a] dispute arises when one party asserts a right, claim, or demand, and the other side expresses disagreement or takes an adversarial posture.” (Id. at p. 222.) This is unlike a claim, which “arises for the first time when the plaintiff suffers an injury.” (Id. at p. 223.) Thus, “a claim may arise or accrue before a dispute arises.” (Id. at pp. 224-25.)

In Kader, despite the alleged sexually harassing conduct beginning in 2018, there was no evidence that the plaintiff ever reported the harassment to his employer or that the employer disputed any claim before March 3, 2022. (Kader, supra, 99 Cal.App.5th at pp. 218-19, 224.) A dispute did not arise until the plaintiff filed charges with the Department of Fair Employment and Housing[1] in May 2022. (Id. at p. 224.) Because the dispute arose after March 3, 2022, “the Act applied to invalidate the predispute arbitration agreement.” (Id. at p. 225.)    

Here, Defendants argue that the EFAA does not apply because “Plaintiff’s claims . . . arose and accrued during her employment, beginning in 2018.” (Mtn. 10:14-16.) Defendants further argue that “Plaintiff does not allege any acts of sexual harassment that occurred on or after March 3, 2022.” (Reply 9:9-10.) However, as discussed above, the date that wrongdoing is committed or a claim accrues is not dispositive, because the EFAA operates in relation to “the sexual harassment dispute.” (See 9 U.S.C. §§ 401, 402; Kader, supra, 99 Cal.App.5th at pp. 222-25.) In this case, as in Kader, there is no indication that a dispute arose until Plaintiff filed charges with the CRD in May 2024. (See Odell Decl., Ex. C.) Even assuming a dispute arose when Plaintiff reported the harassment to Defendants, that allegedly occurred in September 2023. (FAC ¶ 21.) Either way, the dispute arose after March 3, 2022. Defendants identify no other date when a dispute could have arisen.

Defendants’ reliance on the unpublished opinion in Martinez v. Simplified Labor Staffing Solutions (May 15, 2024, No. B331667) 2024 Cal. App. Unpub. LEXIS 3021 is unavailing. It is true that the court in Martinez held the EFAA applied because the plaintiff “alleged acts that arose after EFASASH was signed into law.” (Id., at *6.) However, the court did not hold that the EFAA only applies if the alleged acts occur after the EFAA’s enactment. Martinez did not concern a situation where the alleged conduct occurred before March 3, 2022, but a dispute arose afterwards. “A court's opinion is not authority for a proposition not considered in it.” (People v. Anderson (2015) 232 Cal.App.4th 1259, 1275.) Kader is therefore more on point and also binding, unlike Martinez. Because the sexual harassment dispute in this case arose after March 3, 2022, the EFAA applies.    

c. Continuing Violation

Even if the EFAA only applied to claims that accrued before March 3, 2022, Plaintiff alleges sexual harassment “throughout her employment,” which lasted until March 2024. (FAC ¶¶ 20, 27.) Under the continuing violation doctrine, a claim based on a “pattern of reasonably frequent and similar acts” accrues on the date of the last act. (Willis v. City of Carlsbad (2020) 48 Cal.App.5th 1104, 1124.) “[H]ostile work environment claims . . . by their very nature involve repeated conduct and thus cannot be said to occur on any particular day.” (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1057.) “[A] harassment claim is composed of a series of separate acts that collectively constitute one ‘unlawful employment practice.’” (Ibid.) Thus, “it is appropriate to apply the continuing violation doctrine to . . . harassment claims.” (Id. at p. 1058.)

Here, the allegations in the FAC sufficiently establish that the sexual harassment, even if it began before March 3, 2022, continued through that date. Thus, the sexual harassment claim accrued after March 3, 2022. As a result, applying Defendants’ legal standard (in contravention of Kader) leads to the same conclusion. 

d. Application to Claims Other Than Sexual Harassment

Defendants request the alternative remedy of ordering arbitration for all claims except the sexual harassment claim, arguing that the EFAA only bars arbitration of the harassment claim. The EFAA provides that “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.” (9 U.S.C. § 402.)

Defendants argue that the remaining claims do not stem from conduct fitting the EFAA’s definition of “sexual harassment.” (See 9 U.S.C. § 401.) However, those claims, even if not for sexual harassment, sufficiently “relate to” the sexual harassment dispute. Plaintiff alleges discrimination based on the same mistreatment. Plaintiff alleges retaliation for her reporting of the alleged mistreatment. Plaintiff alleges disability discrimination and failure to accommodate based on the anxiety and stress that she suffered as a result of the mistreatment. Plaintiff alleges that Defendants failed to prevent or address the mistreatment. Plaintiff has not alleged distinct claims such as wage and hour, for example. (See Doe v. Indus Invs., 2023 Cal. Super. LEXIS 48876, *12-13 [distinguishing claims based on “other forms of discrimination and retaliation” from “unrelated . . . wage and hour claims” in applying the EFAA]; see also Johnson v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 535, 559 [EFAA “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”].) Therefore, the claims sufficiently “relate to” the sexual harassment dispute to fall under the EFAA. Accordingly, all of the claims are barred from arbitration.  

CONCLUSION

            Defendants’ motion to compel arbitration is DENIED.