Judge Kerry Bensinger, Case Number: 23STCV07728, Date: 2024-01-09 Tentative Ruling

MOVING PARTY: Defendant Universal Protection Service, LP dba Allied Universal Security Services

This is a sexual harassment, sexual assault, gender discrimination, and retaliation action. In 2020, Plaintiff, Jane Doe, was hired as a security guard with Universal Protection Service, LP dba Allied Universal Security Services (“Allied”). In 2021, she was hired by Scott Beveridge, the Emergency Operations Director of HRL Laboratories, LLC, (“HRL”) for a guard position at HRL. HRL and Allied are joint employers.

On April 7, 2023, Plaintiff, Jane Doe, filed a complaint against Defendants, Allied, HRL, and Beveridge, for: (1) Sexual Harassment – Hostile Work Environment in Violation of FEHA, (2) Sexual Harassment – Quid Pro Quo in Violation of FEHA, (3) Failure to Prevent Harassment in Violation of FEHA, (4) Gender Discrimination, (5) Sexual Battery; (6) Intentional Infliction of Emotional Distress, and (7) Retaliation.

In short, Plaintiff makes the following allegations: While Plaintiff was employed at HRL, Beveridge abused her physically, sexually, and verbally. On several occasions, Beveridge groped her body, shoved his penis and pelvic area on her buttocks, and tried forcing her to kiss him. Beveridge made sexual advances towards her on the employee messengering system and recorded telephone calls. Others observed Beveridge stalking Plaintiff on system monitors. Beveridge’s conduct was unwelcome. On January 13, 2022, Plaintiff lodged a complaint with the HRL human resources department regarding Beveridge’s conduct. In response, HRL retaliated against Plaintiff by withholding her promotion and by refusing to hire her for a marketing assistant position.

On October 9, 2023, Allied filed an Answer to the Complaint and a motion to compel arbitration and stay of action.

On November 14, 2023, HRL and Beveridge filed a joinder to Allied’s motion to compel arbitration.

California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-72.) Under both the FAA and California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) The petitioner bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, the party opposing the petition then bears the burden of proving by a preponderance of the evidence any fact necessary to demonstrate that there should be no enforcement of the agreement, and the trial court sits as a trier of fact to reach a final determination on the issue. (Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th 394, 413.) Pursuant to Code of Civil Procedure section 1281.2, the Court can compel parties to an arbitration agreement to arbitrate their dispute.

HRL and Beveridge submit eleven objections to the Declaration of Jane Doe. As the objections are not material to the Court’s disposition of the motion, the Court does not rule on them.

There is no dispute Plaintiff signed an arbitration agreement and the Federal Arbitration Act governs. The issues to be decided are (1) whether The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”) invalidates the arbitration agreement and (2) whether the arbitration agreement encompasses Plaintiff’s claims. The Court addresses each argument in turn.

The parties disagree over whether the Act applies to Plaintiff’s claims. As framed by Plaintiff in her opposition, “Plaintiff’s claims in connection with Mr. Beveridge arose prior to the passage of the EFAA, her dispute with Defendants arose when she filed her charges with the DFEH on April 7, 2023 – after the EFAA was passed.” (Plaintiff Opp. at pp 5-6.)

The Court is called upon to decide whether the filing of her charges with the DFEH brings her case within the ambit of the Act. It does not.

In Murrey v. Superior Court (2023) 87 Cal.App.5th 1223, the Court of Appeal discussed the Act and its applicability to claims that arose before the Act’s passage. The Appellate Court stated:

“In March 2022, President Joseph R. Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act) (9 U.S.C. §§ 401, 402), representing the first major amendment of the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) since its inception nearly 100 years ago.” (Murrey, 87 Cal.App.5th at p. 1230.) “Section 402, subdivision (a), of the [EFAA] describes its applicability, stating that effective immediately, predispute arbitration agreements and joint-action waivers in the context of sexual assault or harassment were no longer valid or enforceable.” (Id. at p. 1234.)

“[A]t 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).)” (Id. at pp. 1234-35.)

“The Act’s language clearly establishes it was effective immediately. Section 402, subdivision (a), unambiguously provided the Act applied ‘with respect to a case filed under ... State law and relates to the ... sexual harassment dispute.’ (Italics added.) 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. One federal court has resolved this question in favor of employers, holding the dispute or claim must arise after March 3, 2022, the date of the Act's enactment. (Steinberg v. Capgemini Am., Inc. (E.D. Pa. Aug. 16, 2022, Civ. A. No. 22-489) 2022 WL 3371323 pp. *2-3, 2022 U.S.Dist. Lexis 146014 p. *6.) The court reached this conclusion by relying on a marginal note to the Act which stated: “This Act, and the amendments made by this Act, 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, § 3, reprinted in notes foll. 9 U.S.C. § 401.)” (Murrey, 87 Cal.App.5th at p. 1235.)

Ultimately, the Murrey Court did not have to resolve this issue because not only were the acts committed before the passage of the Act but also the complaint was filed before the passage of the Act. As such, the Act did not apply in Murrey. The Court must look beyond Murrey.

The Court must apply federal law. Section 402, subdivision (b) mandates that the applicability of the Act with respect to a dispute shall be determined under Federal Law. (9 U.S.C. § 402, subd. (b).) Federal authority supports the conclusion the Act does not apply to Plaintiff’s claims.

As noted in Murrey, the federal court in Steinberg held the dispute or claim must arise after March 3, 2022, the date of the Act's enactment. The Act does not have retroactive effect. (Johnson v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F. Supp. 3d 535, 550 [“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” (emphasis added)].) The Johnson Court cites several cases in support. (See Johnson, 657 F. Supp. 3d 535 [collecting cases].)

Moreover, the court in Walters v. Starbucks (S.D.N.Y. 2022) 623 F.Supp.3d 333, specifically addressed this issue. Walters alleged that her employer, Starbucks, retaliated against her for reporting unwelcome sexual advances from a supervisor. The sexual advances happened throughout 2020. She filed the action on March 7, 2022, bringing claims for discrimination, a hostile work environment, retaliation, and constructive termination. Starbucks moved to compel arbitration. In opposition, Walters argued the Act applied to any claims filed after March 3, 2022. The court granted the motion, holding that “Walters's claims ... are not covered by [the Act] because each claim arose or accrued before March 3, 2022.” (Walters, supra, 623 F.Supp.3d at p. 338.) The Court noted that a claim normally accrues when the plaintiff has a complete and present cause of action. And further, the Act’s language “is entirely consistent with this definition.” (Id.)

Here, as Plaintiff concedes, Plaintiff’s claims in connection with Beveridge’s sexual harassment accrued (or as Plaintiff put it, “arose”) prior to the passage of the Act. For this reason, Plaintiff’s argument that her DFEH filing brings this matter within the scope of the Act is unavailing. This argument resembles the very argument plaintiff advanced in Walters, which was rejected. A sexual harassment or sexual assault claim does not fall under the ambit of the Act simply by filing a complaint or action after March 7, 2022. The claim must have accrued after March 7, 2022. The Act, in this case, does not apply.

Recognizing this outcome, Plaintiff argues arbitration is not warranted because she suffered sexual harassment from more than one harasser—by an Allied Account Manager named William Amran—after March 3, 2022. Plaintiff describes Amran’s sexual harassment in her declaration. She argues in her Opposition that Amran’s conduct is substantially related to the original sexual harassment by Beveridge and demonstrates how Allied and HRL fostered a hostile environment that permitted managers to sexually harass subordinates without repercussions. For this reason, pursuant to Turner v. Tesla, Inc. (N.D. Cal. Aug. 11, 2023) No. 23-CV-02451-WHO, 2023 WL 6150805, Plaintiff argues Beveridge’s pre-Act conduct and Amran’s post-Act conduct are not severable and cannot be compelled to arbitration. This argument fails, however, for the simple reason that Amran’s conduct is not alleged anywhere in the Complaint. All that is before the Court are allegations of Beveridge’s conduct and Allied and HRL’s alleged retaliation for reporting Beveridge’s conduct.[1] At this juncture, the Act does not apply to this case.

To the fullest extent authorized by law, the Parties mutually agree to the resolution by binding arbitration of all claims or causes of action that the Employee may have against the Company, or the Company against the Employee, which could be brought in a court of law, unless otherwise set forth in this Agreement. Examples of claims covered by this Arbitration Policy and Agreement specifically include, but are not limited to, claims for breach of any contract (written or oral, express or implied); fraud, misrepresentation, defamation, or any other tort claims; claims for discrimination and/or harassment; claims for wrongful termination; claims relating to any offers, promotions, or transfers made by the Company; claims for retaliation; claims for non-ERISA-covered benefits (such as vacation, bonuses, etc.); claims for wages or other compensation, penalties or reimbursement of expenses; breaks and rest period claims; claims relating to background checks; and claims for violation of any law, statute, regulation, ordinance or common law, including, but not limited to, all claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967; the Older Workers’ Benefit Protection Act of 1990; the Americans with Disabilities Act; the Family and Medical Leave Act; the Consolidated Omnibus Budget Reconciliation Act of 1985; the Fair Labor Standards Act; and any other applicable federal, state, or local laws relating to discrimination in employment, leave, and/or wage and hour laws, whether currently in force or enacted hereafter.

Plaintiff argues her claims do not fall within the scope of the agreement because sexual assault claims in an employment context are beyond the scope of arbitration clauses. For this proposition, Plaintiff relies on Jones v. Halliburton Co. (5th Cir. 2009) 583 F.3d 228 and RN Solution, Inc. v. Catholic Healthcare West (2008) 165 Cal.App.4th 1511. Both cases are unavailing. The Court of Appeals in Jones expressly stated that “[w]e do not hold, as a matter of law, sexual-assault allegations can never “relate to” someone’s employment.” (Jones, 583 F.3d at p. 241.) RN Solution, Inc. concerned assault claims in the context of a business-to-business arbitration agreement. Here, and as Allied points out, Beveridge’s conduct occurred within the scope of Plaintiff’s employment. (See, e.g., Complaint, ¶¶ 22-24.) Moreover, the arbitration provision here is broad and expressly covers “. . . any other tort claims; claims for discrimination and/or harassment . . . and any other applicable federal, state, or local laws relating to discrimination in employment . . . .” (Bhangoo Decl., Ex. A.) The arbitration provision encompasses Plaintiff’s claims.

The motion to compel arbitration is GRANTED. The action is stayed as to all parties pending the conclusion of the arbitration. The Court sets a post-arbitration status conference for October 9, 2024 at 9:00 a.m.

Kerry Bensinger

Judge of the Superior Court

[1] Plaintiff represents that she will seek leave to amend the Complaint to add allegations of Amran’s conduct. Yet, Plaintiff has not filed a motion for leave to amend. Nor does Plaintiff cite any authority for the proposition that a motion to compel arbitration may be defeated by alleging claims and conduct in a declaration but that are not alleged in the complaint. Plaintiff’s reference to a forthcoming amendment does not forestall the Court’s obligation to rule on the pending motion.