Judge Gail Killefer, Case Number: 23STCV03160, Date: 2023-07-21 Tentative Ruling

MOVING PARTY: Defendant B &V Enterprises, Inc. dba Super King Market (“Super King”)

TENTATIVE: The court grants Defendant B &V Enterprises, Inc. dba Super King Market’s Motion to Compel Arbitration. The action is stayed pending arbitration. The court sets an OSC re Status of Arbitration for July 20, 2024, at 8:30 a.m. Defendant is to give notice.

Background

On February 14, 2023, Narmin Behjati (“Plaintiff”) filed a complaint against Defendants B&V Enterprises, Inc. dba Super King Market (“Super King”); Tigran Baghdasaryan (“Bagdasaryan”)[1]; and Does 1 to 20.

1) Sexual Harassment and Hostile Work Environment – (California Govt. Code §§12940, et seq.)

3) Failure to Reasonably Accommodate Disability (California Govt. Code §§12940, et seq.)

4) Failure to Engage in a Timely, Good Faith, Interactive Process With Employee with a Disability (California Govt. Code §§12940, et seq.)

6) Failure to Prevent Harassment, Discrimination and Retaliation (California Govt. Code §§12940, et seq.)

On April 13, 2023, Defendant filed a Motion to Compel Arbitration. Plaintiff opposed the motion on July 10, 2023. Defendant filed a reply on July 14, 2023.

Discussion

Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute.¿ (Code Civ. Proc., § 1281.2; see also Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.)¿¿¿¿¿¿

A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court¿(1998) 62 Cal.App.4th 348, 356-57.)¿¿¿¿¿¿

“If a court of competent jurisdiction . . . has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc., § 1281.4.)¿

Defendant B &V Enterprises, Inc. dba Super King Market (“Super King”) seeks an order compelling Plaintiff to arbitrate her claims.

Defendant Super King asserts that via an applicant portal, ApplicantPro, Plaintiff signed an arbitration agreement (the “Agreement”). (Barrow Decl. ¶¶ 6, 8.) To create an ApplicantPro account, job applicants must use their personal email address and create a unique password that only the applicant knows, and to which Super King does not have access. (Compl. ¶ 10.) Per Super King’s records, Plaintiff acknowledged and accepted the terms of the Agreement on June 7, 2022, via ApplicantPro, and electronically signed the Agreement through Hireforms, an ApplicantPro subsidiary. (Barrow Decl. ¶¶ 11, 12, Ex. A.)

I and the Company agree to utilize binding individual arbitration as the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to my employment, except to the extent I opt-out of certain portions of this arbitration agreement as set forth below. I and the Company each specifically waive and relinquish our respective rights to bring a claim against the other in a court of law and to have a trial by jury. Both I and the Company agree that any claim, dispute, and/or controversy that I may have against the Company (or its owners, directors, officers, managers, employees, or agents), or the Company may have against me, shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act ("FAA"), in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. sec 1280 et seq., including section 1283.05 and all of the Act's other mandatory and permissive rights to discovery)… Included within the scope of this Agreement are all disputes, whether based on tort, contract, statute (including, but not limited to, any claims of discrimination, harassment and/or retaliation, whether they be based on the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, as amended, or any other state or federal law or regulation), equitable law, or otherwise.

Unless I have exercised my right to opt out of the terms of this Paragraph as provided for herein, I agree that any claims brought under this binding arbitration Agreement shall be brought in the individual capacity of myself or the Company. . . Any dispute regarding the scope or enforceability of this Agreement shall be resolved by a court, not by the arbitrator. By signing this agreement, I am agreeing to waive any substantive or procedural rights that I may have to bring or participate in an action brought on a class or collective basis. . .

If any portion of this Agreement is deemed invalid or unenforceable, it shall not invalidate the other provisions of this Agreement subject to this provision. . . .

(Barrow Decl. ¶ 12, Ex. A [bold added].) Despite the Agreement having an opt out provision, Defendant asserts that Plaintiff did not choose to opt out of any provision of the Agreement.

Plaintiff’s opposition does not dispute that Plaintiff signed the Agreement or that the claims asserted by Plaintiff are covered by the Agreement. Therefore, Defendant has met its burden of showing that a valid agreement to arbitrate exists between the Parties.

III. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

Plaintiff opposes arbitration on the basis that the Agreement is barred by the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act” or “EFAA”). (9 U.S.C. §§ 401, 402(a).) On March 3, 2022, the EFAA became effective and voided any predispute arbitration agreements involving sexual harassment allegations. (9 U.S.C. § 402(a).)

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.

The Act provides that it “shall apply with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act.” (Pub. L. No 117-90, March 3, 2022, 136 Stat 26.) Although this provision, limiting the applicability of the Act, is included in the Act as a statutory note, it is not codified as a subsection. When interpreting a statute, “we must read it in the context of the entire Act, rather than in the context of the ‘arrangement’ selected by the codifier.” (U.S. v. Welden (1964) 377 U.S. 95, 98, fn. 4; see also Conyers v. Merit Systems Protection Bd. (Fed. Cir. 2004) 388 F.3d 1380, 1382, fn. 2; Midland Power Co-op. v. Federal Energy Regulatory Com'n (D.C. Cir. 2014) 774 F.3d 1, 3 [In cases where the United States Code and the Statutes at Large conflict, the Statutes at Large version controls].)

At issue is whether the Act applies to Plaintiff’s case. Defendant Super King asserts the Act does not apply because Plaintiff’s sexual harassment claims accrued before the Act was enacted on March 3, 2022. Defendant also argues that the Act does not apply to the remainder of Plaintiff’s claims.

IV. Plaintiff’s Sexual Harassment Claim Accrued before the Act was Enactment Precluding its Applicability to Plaintiff’s Claim

“‘Although state law determines the length of the limitations period, federal law determines when a civil rights claim accrues.' ... Under federal law, 'a claim accrues when the plaintiff knows or has reason to know of the injury which is the basis of the action.’ [Citation].” (Javor v. Taggart (2002) 98 Cal.App.4th 795, 802 disproved on other grounds by Leon v. County of Riverside (Cal. 2023) 309 Cal.Rptr.3d 682.) “[A] plaintiff's claim accrues when the plaintiff learns of the ‘actual injury,’ i.e., an adverse employment action, and not when the plaintiff suspects a ‘legal wrong,’ i.e., that the employer acted with a discriminatory intent.” (Coppinger-Martin v. Solis (9th Cir. 2010) 627 F.3d 745, 749.)

The Complaint alleges that Plaintiff was placed on medical leave from May 14, 2021, to June 9, 2021. (Compl. ¶ 33.) It is unclear why Plaintiff did not return to work after June 9, 2021. On September 2, 2021, Human Resources informed Plaintiff that it accepted her resignation only to rescind it on or about September 15, 2021, when Plaintiff provided a new doctor’s note releasing her to work with restrictions. (Compl. ¶¶ 37, 41.) From September 2021 to January 28, 2022, Plaintiff continued to email Human Resources with an updated medical note releasing her to work with work restrictions. (Compl. ¶¶ 42 – 45.) Plaintiff states that during this time, Defendant Super King failed to accommodate her or to engage in a timely and good faith interactive process. (Compl. ¶¶ 42-45.)

On May 4, 2022, Plaintiff emailed Human Resources again with a medical note clearing Plaintiff to return to work full duty with no work restrictions. (Compl. ¶ 46.) Plaintiff alleges that Defendant Super King again failed to engage in the interactive process, failed to accommodate her, failed to reinstate her, and failed to respond to her email. (Compl. ¶¶ 46, 54, 83, 184.).) In August 2022, the parties settled Plaintiff’s workers’ compensation claim and, as a condition of settlement, Plaintiff’s employment with Defendant Super King ended on September 15, 2022, when Plaintiff signed the form acknowledging the separation. (Compl. ¶ 47.)

The court agrees that based on Plaintiff’s allegations, her sexual harassment claim accrued before the Act became effective because Plaintiff did not return to work after going on medical leave in May 2021. There are no allegations that Plaintiff suffered harassment after May 2021 or that she had further contact with Defendant Baghdasaryan after that date. In fact, the Complaint alleges Defendant Baghdasaryan told Plaintiff he was being transferred to another store in Glendale, CA. (Compl. ¶ 25.) Since the Complaint fails to state facts alleging that the sexual harassment continued after Plaintiff went on medical leave, Plaintiff’s sexual harassment claim accrued before the Act’s enactment, as did any claim for failure to prevent sexual harassment.

Plaintiff also alleged seven other causes of action that are not related to sexual harassment and to which the EFAA does not apply. Since Plaintiff’s sexual harassment claim or dispute arose before the date of the Act’s enactment, the Act does not apply and the Parties’ Agreement controls. In other words, the Agreement is not “a sexual harassment dispute” under the Act. (9 U.S.C. § 402.)

“Although the Act applied to any cases filed after its enactment, there is some debate about whether it matters when the underlying sexual harassment or assault took place.” (Murrey v. Superior Court (2023) 87 Cal.App.5th 1223, 1235 [italics original].) The Fourth District in Murrey did not reach the issue of when the Act applies as the plaintiff in Murrey filed her case one year before the Act’s enactment, thus the Act did not apply. (Id.) The court examined federal cases in other jurisdictions for guidance as to whether the Act applies to Plaintiff’s case even though her sexual harassment claim and any related claims of sexual harassment had already accrued before the Act became effective. Case law from other jurisdictions supported the conclusion that the Act does not apply retroactively and does not apply to sexual harassment claims or disputes that arose prior to the date of Act’s enactment.

“In separating and distinguishing ‘dispute’ and ‘claim’ by placing them in the disjunctive, Congress provided a spectrum relative to the [Act’s] applicability. A dispute arises when the conduct which constitutes the alleged sexual assault or sexual harassment occurs. As such, if the conduct occurred after March 3, 2022 [the date of the Act’s enactment], the Act would clearly apply.” (Barnes v. Festival Fun Parks, LLC (W.D. Pa., June 27, 2023, No. 3:22-CV-165) 2023 WL 4209745, at *10.) “[I]f the claim accrues after the effective date of the Act, the Act applies prospectively even though the violations occurred prior to March 3, 2022.” (Id.)

“Here, [Plaintiff’s] sexual harassment claim accrued well before the enactment of the EFA Act…. rendering the EFA Act inapplicable to her situation. Notably, several other courts have similarly refused to apply the EFA Act retroactively to claims that were filed before its enactment or that arose from adverse employment actions that occurred before its enactment.” (Marshall v. Human Services of Southeast Texas, Inc. (E.D. Tex., Feb. 7, 2023, No. 1:21-CV-529) 2023 WL 1818214, at *3; see also Newcombe-Dierl v. Amgen (C.D. Cal., May 26, 2022, No. CV222155DMGMRWX) 2022 WL 3012211, at *5 [Noting that because the plaintiff’s harassment claim accrued before the Act’s enactment, then the Act did not apply.]

Plaintiff’s reliance on Johnson v. Everyrealm, Inc. (S.D.N.Y., Feb. 24, 2023, No. 22 CIV. 6669 (PAE)) 2023 WL 2216173, is misplaced. There, Defendant never claimed that the plaintiff’s claims had accrued before the Act’s enactment and instead argued that the plaintiff had failed to plead a viable harassment claim. (Id. at *11.) “[D]efendants’ motion to compel arbitration presents, in sequence, two issues. The first is whether the FAC ‘alleges conduct constituting a sexual harassment dispute,’ so as to come within the EFAA. The second is whether, if so, the EFAA makes the arbitration agreement unenforceable as to the entirety of the FAC's claims, or only as to its claims of sexual harassment.”

The Johnson Court only reached the second issue as to the scope of applicability of the Act after determining that the Act did apply because plaintiff had plausibly pleaded sexual harassment claims. (Johnson, (S.D.N.Y., Feb. 24, 2023, No. 22 CIV. 6669 (PAE)) at *11.) The Johnson Court never disagreed with the proposition that the Act only applies to claims that accrued on or after the Act’s enactment. “The EFAA applies only to claims that accrued on or after March 3, 2022, the day President Biden signed the EFAA into law; it does not have retroactive effect.” (Id. at *10.) The Johnson Court did not find that the Act applies regardless of when a sexual harassment claim accrued so long as a sexual harassment dispute is alleged.

Having found that the Act does not apply to Plaintiff’s case, the court grants Defendant’s Motion.

Defendant B &V Enterprises, Inc. dba Super King Market’s Motion to Compel Arbitration is granted. The action is stayed pending arbitration. Defendant to give notice.

[1] On July 10, 2023, Defendants’ counsel filed a Notice and Acknowledgment of Receipt of the summons and complaint on behalf of Baghdasaryan. Defendant Baghdasaryan has not yet filed a responsive pleading.