Judge Holly J. Fujie, Case Number: 23STCV03437, Date: 2023-08-14 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

This action arises out of an employment relationship. On February 16, 2023, Plaintiff filed a complaint (the “Complaint”) alleging: (1) sexual harassment; (2) failure to take reasonable steps to prevent harassment; (3) retaliation; (4) wrongful termination; (5) wrongful termination in violation of public policy; (6) failure to pay overtime wages; (7) failure to pay minimum wages; (8) failure to provide meal periods; (9) failure to pay wages of terminated employee; (11) knowing and intentional failure to comply with itemized employee wage statement provisions; and (12) violation of Business and Professions Code section 17200.

In relevant part, the Complaint alleges that during the course of her employment with Moving Defendant, she was subjected to sexual harassment, which culminated in a retaliatory firing in March 2021. (See Complaint ¶¶ 9-10.)

On May 30, 2023, Moving Defendant filed a motion to compel arbitration and stay the proceedings (the “Motion”) on the grounds that when Plaintiff began her employment, she signed a binding arbitration agreement (the “Arbitration Agreement”) that requires that her current claims be resolved in binding arbitration.

Plaintiff’s objections to the Declaration of Andrea Contreras (“Contreras Decl.”) are OVERRULED in their entirety. Plaintiff’s objections to the Declaration of Sandeep Kaur (“Kaur Decl.”) are OVERRULED in their entirety. Plaintiff’s objections to the Supplemental Contreras Declaration and Supplemental Kaur Declaration that were filed in support of the reply brief (the “Reply”) are GRANTED.[1]

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.) 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.) When the enforceability of an arbitration clause may depend upon which of two sharply conflicting factual accounts is to be believed, the better course would normally be for the trial court to hear oral testimony and allow the parties the opportunity for cross-examination. (See Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 414.)

In support of the Motion, the Moving Defendant provides evidence of the Arbitration Agreement, which is a document signed by Plaintiff on February 27, 2020 entitled “Mutual Agreement to Arbitrate Employment-Related Disputes.” (See Kaur Decl., Exhibit A.) The Agreement contains a provision that provides:

“The employee signing this Agreement ("Employee") and Roydeep Enterprise LLC ("Company") ( collectively, the "Parties") agree to utilize binding arbitration, at the request of either Party, as the sole and exclusive means to resolve all grievances, disputes, controversies, claims, or causes of action that may arise out of or be related in any way to Employee's employment with the Company, and/or separation thereof, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory. Any grievances, disputes, controversies, claims, or causes of action between Employee and Company ( or its subsidiaries, affiliates, assigns, assignees, parent companies, owners, directors, officers, shareholders, partners, predecessors, successors, divisions, franchises, managers, supervisors, current and former employees representatives, members, marital community, contractors, plan administrators, insurers, attorneys, related entities, or agents in their capacity as such or otherwise) shall be submitted to and determined exclusively by binding arbitration as set forth in this Agreement.” (Kaur Decl., Exhibit A at ¶ 1.)

As a threshold matter, the Court finds that the Moving Defendant has satisfied its burden to show the existence an agreement to arbitrate.

Plaintiff does not dispute the existence of the Arbitration Agreement; rather, Plaintiff argues that the Arbitration Agreement is unenforceable under the Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Forced Arbitration Act”). Plaintiff also argues that the Arbitration Agreement is unenforceable because of the unconscionable and fraudulent circumstances of its execution.

The Forced Arbitration Act voids pre-dispute arbitration clauses in cases involving sexual harassment allegations. (Murrey v. Superior Court (2023) 87 Cal.App.5th 1223, 1230.) The Forced Arbitration Act applies to any dispute or claim that arises or accrues on or after the date of enactment of this Act. (See PL 117-90, March 3, 2022, 136 Stat 26.)

As alleged in the Complaint, all of conduct underlying Plaintiff’s Complaint occurred before the enactment of the Forced Arbitration Act, and the statute therefore does not apply.

Plaintiff argues that the Agreement should not be enforced due to the fraudulent and unconscionable circumstances of its signing. Plaintiff declares that Spanish is her first language and that she never learned to read and write in English. (See Declaration of Dilma Soriano (“Soriano Decl.”) ¶ 3.) In 2020, Plaintiff learned Moving Defendant was hiring by speaking to Contreras. (Soriano Decl. ¶ 3.) Plaintiff and Contreras communicated in Spanish and when Contreras presented Plaintiff with a one-page document written in English, Plaintiff informed her that she could not read or speak English. (Id.) Plaintiff declares that after Contreras instructed Plaintiff how to fill out the form, Contreras informed Plaintiff that she was hired. (See id., Exhibit 1.) A few days after Plaintiff began working, Contreras presented Plaintiff with several documents that she said Plaintiff needed ot fill out in order to continue her employment. (Soriano Decl. ¶ 4.) Some of the documents presented to Plaintiff were in English and some were in Spanish; when Plaintiff asked Contreras for Spanish copies of all the documents, Contreras instructed Plaintiff to stop asking questions and to sign and date the forms as directed. (See id., Exhibit 2.) The entire process took around five to ten minutes. (Id.) When Plaintiff asked Contreras if she could have copies of the documents she signed, Contreras told her no. (Id.) Plaintiff had not heard of arbitration (in English or Spanish) before her attorneys explained it to her after she initiated this action. (Soriano Decl. ¶ 6.)

Plaintiff’s evidence regarding the circumstances in which she signed Arbitration Agreement and other onboarding paperwork sharply conflict with the accounts provided in the Conteras and Kaur Declarations. Given the evidentiary conflict on issues that bear on the Arbitration Agreement’s enforceability, the Court finds it appropriate to conduct an evidentiary hearing before ruling on the Motion. (See Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 414.) The Court therefore schedules a hearing on September 21, 2023 at 9:00 a.m. in this department.

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.

[1] The general rule of motion practice is that new evidence is not permitted with reply papers. (Golden Door Properties, LLC v. Superior Court of San Diego County (2020) 53 Cal.App.5th 733, 774.)