Judge Holly J. Fujie, Case 22STCV25141 2022-12-29 Tentative Ruling

MOVING PARTY: Defendants Private National Mortgage Acceptance Company, LLC, PennyMac Financial Services, Inc., and PennyMac Mortgage Investment Trust (collectively, “Moving Defendants”)

This action arises out of an employment relationship. On August 4, 2022, Plaintiff filed a complaint (the “Complaint”) alleging seven causes of action for violations of the Fair Employment and Housing Act (“FEHA”). The Complaint alleges that Plaintiff experienced workplace discrimination, retaliation, and harassment on the basis of pregnancy between December 2020 and March 7, 2022.

Moving Defendants filed a motion to compel arbitration and stay the proceedings (the “Motion”) on the grounds that Plaintiff signed an arbitration agreement provision (the “Arbitration Agreement”) as a condition of her employment which requires that her current claims be adjudicated in binding arbitration.

The purpose of the Federal Arbitration Act (“FAA”) is to move the parties in an arbitrable dispute out of court and into arbitration as quickly and easily as possible. (Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 23.) The FAA is consistent with the federal policy to ensure the enforceability, according to their terms, of private agreements to arbitrate. (Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 57.)

California law, like federal law, favors enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97 (“Armendariz”).) Under California Code of Civil Procedure (“CCP”) section 1281, a written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable, and irrevocable, save upon such grounds as exist for the revocation of any contract. (CCP § 1281.) 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 unless grounds exist not to compel arbitration. (CCP § 1281.2.)

In ruling on a petition to compel arbitration, the trial court first decides whether an enforceable arbitration agreement exists between the parties, and then determines whether the plaintiff’s claims are covered by the agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) 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.) The trial court may resolve a motion to compel arbitration in summary proceedings. (Gamma Eta Chapter of Pi Kappa Alpha v. Helvey (2020) 44 Cal.App.5th 1090, 1097.) Factual issues may be submitted on declarations and affidavits, or by oral testimony in the court’s discretion. (Juen v. Alain Pinel Realtors, Inc. (2019) 32 Cal.App.5th 972, 978.)

In support of the Motion, Moving Defendants provide evidence of their Mutual Arbitration Policy (“MAP”) and of the Arbitration Agreement. (See Declaration of Leslie Prock (“Prock Decl.”) ¶¶ 6, 9, Exhibits 1-2.) The MAP provides it applies to “any and all disputes relating to or arising out of your employment relationship with any PennyMac entity or the termination of that relationship, except those claims specifically excluded below,” and includes FEHA claims within its ambit of arbitrable claims. (See Prock Decl. ¶ 6, Exhibit 1.)

“I understand and agree that the MAP is a condition of my employment. Except as otherwise permitted by the MAP, 1 agree to submit to final and binding arbitration any and all claims and disputes related in any way to my employment or the termination of my employment. My agreement to arbitrate applies to disputes that are already pending or have not yet been asserted, whether they exist now or arise in the future.” (Prock Decl., Exhibit 2.)

Plaintiff does not dispute the existence or validity of the Arbitration Agreement but argues that her claims are exempt from the FAA under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act”).

Application of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

Under the Act, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, 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, subd. (a).) Under FEHA, harassment because of sex includes sexual harassment, gender harassment, and harassment based on pregnancy, childbirth, or related medical conditions. (Gov. Code § 12940, subd. (j)(4)(C).)

Plaintiff argues that the seventh cause of action for harassment is not arbitrable under the Act because it constitutes a sexual harassment dispute and that as a result, the Arbitration Agreement is unenforceable against any of her claims which all relate to the sexual harassment dispute.

Without making a determination of the sufficiency of the harassment allegations, the Court finds that the Complaint ostensibly alleges a sexual harassment claim that falls within the scope of the Act and that based on the language of the Act, the Arbitration Agreement would be unenforceable against the entirety of the claims asserted in the Complaint.

Moving Defendants alternatively argue that even if the Act applies, the Arbitration Agreement is enforceable under California law. (See Garrido v. Air Liquide Industrial U.S. LP (2015) 241 Cal.App.4th 833, 841-42; Diaz v. Sohnen Enterprises (2019) 24 Cal.App.5th 126, 130.) Plaintiff offers no arguments regarding why the Court should not compel arbitration of her claims under California law and the Court finds that Plaintiff has conceded this issue to Moving Defendants. (See Nelson v. Pearson Ford Co. (2010) 186 Cal.App.4th 983, 1021 (2010) (issues not addressed in opposition briefs are conceded to the moving party).)

Based on the foregoing, the Court GRANTS the Motion. The Court sets a status conference on June 21, 2023 at 8:30 a.m. in this department. The parties are ordered to file a joint status report by June 7, 2023. This action is STAYED pending the conclusion of the arbitration proceedings.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative. If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person. The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date. This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court