Judge Kenneth J. Medel, Case 37-2023-00023983-CU-WT-CTL 2024-03-01 Tentative Ruling

Judge: Kenneth J. Medel, Case: 37-2023-00023983-CU-WT-CTL, Date: 2024-03-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - February 29, 2024

03/01/2024 09:30:00 AM C-66 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Kenneth J Medel

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Civil - Unlimited Wrongful Termination Motion Hearing (Civil) 37-2023-00023983-CU-WT-CTL CUNNINGHAM VS LOMAS SANTA FE COUNTRY CLUB [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Confirm Arbitration Award, 10/11/2023

Defendants LOMAS SANTA FE COUNTRY CLUB; OB SPORTS GOLF MANAGEMENT (BAYLANDS), LLC; TROON GOLF, LLC; and JOAQUIN PALEYO's Motion to Compel Arbitration is GRANTED.

This is a wage & hour, PAGA case with wrongful termination/sexual harassment allegations. On June 8, 2023, Plaintiff filed an individual and representative action Complaint alleging (1) FEHA Sex Harassment; (2) FEHA Sex Discrimination; (3) Failure to Prevent Same; (4) Meal Periods; (5) Rest Periods; (6) Wage Statements; (7) Waiting Time Penalties; (8) Unfair Competition; (9) Violation of PAGA; and (10) Wrongful Termination.

Defendant moves to compel arbitration. Defendant argues that in connection with her employment with Defendant OB SPORTS GOLF MANAGEMENT at LOMAS SANTA FE COUNTRY CLUB, Plaintiff agreed to arbitrate any dispute, claim, or controversy arising out of or relating to her employment with OB Sports – including, but not limited to, all claims brought under the California Labor Code and the California Fair Employment and Housing Act ('FEHA').

Further, Plaintiff agreed that 'class and collective claims are hereby waived and will not be asserted.' Most importantly, Plaintiff agreed that 'if any dispute involves multiple claims, some of which are subject to individual arbitration under this Agreement and some that are not, to sever and stay for the duration of the arbitration proceedings any such non-arbitrable claims.' Defendant contends that Plaintiff now seeks to pursue her individual FEHA, Labor Code, and representative PAGA claims in Court. Defendant relies on the US Supreme Court ruling in Viking River Cruises, Inc. v. Moriana, (2022) 142 S.Ct. 1906, which holds that PAGA claims are arbitrable on an individual basis because California's rule to the contrary is preempted by the Federal Arbitration Act.

Subsequently, in the California Supreme Court case, Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, the court reasoned that once a plaintiff's individual PAGA claim is compelled to arbitration, while a plaintiff does maintain standing to bring the representative claim for violations of PAGA on behalf of other aggrieved employees, the representative claims must be stayed pending the arbitration proceedings of the individual PAGA claim. The court in Adolph held further that if the plaintiff is found in the arbitration proceedings of her individual PAGA claims to not be an aggrieved employee, then the representative claims can no longer be maintained.

Defendant contends that Plaintiff has no legal basis to avoid enforcement of the Parties' valid Arbitration Agreement. Accordingly, Defendants respectfully request that all of Plaintiff's individual claims be compelled to binding arbitration and any representative claims be stayed pending the completion of arbitration proceedings, consistent with the terms of the Agreement.

In Opposition, plaintiff argues that the entire motion must be denied based upon 'The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act' – which amended the Federal Arbitration Act by creating an express exception to the liberal policy enforcing arbitration agreements when the case involves a sexual harassment dispute. Plaintiff relies heavily on Kadar v. Southern Cal. Med. Center, Inc.

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3034822 37 CASE NUMBER: CASE TITLE: CUNNINGHAM VS LOMAS SANTA FE COUNTRY CLUB [IMAGED] 37-2023-00023983-CU-WT-CTL (Cal. Ct. App., Jan. 29, 2024) 2024 WL 322052, at *1-6 ('Kadar').

There does not seem to be a dispute that plaintiff agreed to arbitration and that under the agreement and case law (Viking River and Adolph in particular), the individual claims would be subject to arbitration and any representative claims be stayed pending the completion of arbitration proceedings, consistent with the terms of the Agreement.

The question in this case involves sexual harassment allegations and the applicability of The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act' [EFAA]. Enacted on March 3, 2022, the 'EFAA amends the Federal Arbitration Act [('FAA')] by invalidating any pre-dispute mandatory arbitration clause as it applies to plaintiffs alleging claims of or related to workplace [sexual] harassment.' (Famuyide v. Chipotle Mexical Grill, Inc. (D. Minn., Aug. 2023) 2023 WL 5651915, No. CV 23-1127 at *3 [applying the EFAA and denying motion to compel arbitration]; Yost v. Everyrealm, Inc.

(2023) 657 F.Supp.3d 563, 586 ['The stated purpose of the EFAA is to empower sexual harassment claimants to pursue their claims in a judicial, rather than arbitral, forum.'].) The EFAA creates an express exception to the FAA's general rule requiring enforcement of arbitration agreements when the case involves a 'sexual harassment dispute' as defined by the EFAA. (See 9 U.S.C. § 402(a); see also Johnson v. Everyrealm, Inc. (2023) 657 F.Supp.3d 535, 558 [applying EFAA and denying motion to compel arbitration – 'FAA's liberal federal policy favoring arbitration agreements may be overridden by a contrary congressional command.'].) The EFAA states, in relevant part: 'Notwithstanding any other provision of this title, 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(a) [emphasis added].) 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.' (9 U.S.C. § 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.' (U.S.C § 401(4).) Defendants argue the EFAA is inapplicable because Plaintiff was harmed (i.e., sexually harassed) before the enactment of EFAA on March 3, 2022. (Id.) Defendant contends that the 'dispute' arose prior to the enactment of the act. Plaintiff claims that prior to her resignation, in late November of 2021, she rejected Mr. Paleyo's sexual advances/harassment (i.e., asserted her right to be free from harassment) and Mr. Paleyo allegedly told Plaintiff not to tell anyone about the harassment (i.e., an expression of an adversarial posture). Then, on February 3, 2022, Plaintiff sent David Duran, the Assistant General Manager, a resignation notice in which she claimed that she was 'subjected to a hostile work environment,' which is a clear assertion of a claim. See Declaration of David Duran ('Duran Decl.'), ¶ 4, Exhibit 1). Duran immediately scheduled an exit interview with Plaintiff to obtain more information about her claim of sexual harassment. Id at ¶ 5. During the exit interview, Plaintiff admitted that she did not report the alleged sexual harassment to management or Human Resources prior to her February 3, 2022 resignation letter, but claimed that she was never provided with information on how to report a sexual harassment complaint. Id. Duran disputed Plaintiff's claim that the reporting procedures were never provided to her, as all employees receive such information. Id. At the conclusion of the exit interview, Duran told Plaintiff that he would launch an investigation and take corrective action if necessary. Id. Following the exit interview, Duran conducted an investigation of Plaintiff's claims. Id at ¶ 6. During the investigation, witnesses disagreed with Plaintiff's allegations of sexual harassment. Id. Duran did not corroborate Plaintiff's claims and the Defendants disputed that Plaintiff was subjected to sexual harassment. Id. Duran's exit interview with Plaintiff, investigation, and findings disputing her claims occurred in February 2022. Id at ¶ 7.

Plaintiff recognizes the EFAA is limited to any 'dispute' that 'arises' on or after the 'date of enactment of this Act [Mar. 3, 2022].' (U.S.C. § 401 [Statutory Note]; see Murrey v. Super. Ct. (2023) 87 Cal.App.5th 1223, 1235.) According to plaintiff, the Court of Appeal has held the date of injury or harm is not synonymous with the date the dispute arose for purposes of applying the EFAA because the 'definitions within [EFAA] make clear that a dispute requires more than an injury.' (Kadar, supra, at *5 ['a dispute does not arise solely from the alleged sexual conduct']; see also Famuyide, supra, at *3 [accord].) For purposes of the EFAA, 'a dispute arises when one party asserts a right, claim, or demand, and the other Calendar No.: Event ID: TENTATIVE RULINGS

3034822 37 CASE NUMBER: CASE TITLE: CUNNINGHAM VS LOMAS SANTA FE COUNTRY CLUB [IMAGED] 37-2023-00023983-CU-WT-CTL side expresses disagreement or takes an adversarial position. In other words, a dispute cannot arise until both sides have expressed their disagreement, either through words or actions. Until there is a conflict or disagreement, there is nothing to resolve in litigation.' (Kadar, supra, at *4 [citing multiple cases in accord].) Plaintiff contends that the evidence shows that the earliest date a 'dispute' arose between Plaintiff and Defendants is September 21, 2022 – which is after the EFAA took effect in March 2022 – when Plaintiff received her right-to-sue notice from the DFEH and mailed Defendants a confidential pre-litigation settlement demand. (See Lurtz Decl., ¶ 6-7, Ex. C-D.) Prior to this date, there is no evidence of a conflict or disagreement between Plaintiff and Defendants, and Defendants have not provided evidence otherwise.

Whether the EFAA applies hinges on when the 'sexual harassment dispute' arose. ' EFAA became effective on March 3, 2022 and states, in part, 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.' (9 U.S.C. § 401.) The Act does not define a 'dispute' or state when a dispute has 'arisen.' The Court of Appeal, Fifth District Division 5 has held the date that a dispute has arisen for purposes of the Act is a fact-specific inquiry in each case. A dispute does not arise solely from the alleged sexual conduct. 'A dispute arises when one party asserts a right, claim, or demand, and the other side expresses disagreement or takes an adversarial posture. (Famuyide, supra, at *3.) In other words, '[a] dispute cannot arise until both sides have expressed their disagreement, either through words or actions.' (Id. at *8.) Until there is a conflict or disagreement, there is nothing to resolve in litigation. (Ibid.) In Kader, the Court held that the Act applied because the actual dispute arose after March, 2022. The quote at length explains: In the present case, there is no evidence that a dispute existed between the parties prior to or at the time of signing the new arbitration agreement on June 25, 2019. Kader alleged three incidents of sexually harassing or assaultive conduct took place before the agreement was signed, but there is no evidence that any dispute yet existed. In fact, Kader alleged Rasekhi threatened to fire him if he told anyone, implying that Rasekhi did not dispute the conduct. There was no evidence that Kader asserted any right, claim, or demand prior to filing charges with the DFEH in May 2022, and at oral argument, Kader's attorney conceded that Kader never complained to anyone at the Center about Rasekhi's conduct.

There is also no evidence that the Center defendants disagreed with any claim asserted by Kader until after he filed charges with DFEH. The trial court properly concluded that the Act applies, because the arbitration agreement was executed before the dispute arose between the parties in May 2022.' Kader v. S. California Med. Ctr., Inc., 317 Cal. Rptr. 3d 682, 688 (Ct. App. 2024).

As argued by the defendant above, the facts of this case differ from Kadar in that it is undisputed that Plaintiff complained of harassment prior to the enactment of the EFAA. Plaintiff complained of the conduct and there was and investigation prior to March, 2022. Given that EFAA does not apply to this case, the Court grants the motion to compel arbitration. Accordingly, all of Plaintiff's individual claims are compelled to binding arbitration and any representative claims are stayed pending the completion of arbitration proceedings, consistent with the terms of the Arbitration Agreement.

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