Judge Kevin C. Brazile, Case Number: 22STCV29339, Date: 2023-10-05 Tentative Ruling

TENTATIVE RULINGS

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STANLEY MOSK COURTHOUSE, DEPARTMENT 20 - JUDGE KEVIN C. BRAZILE

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Moving Party: Defendants Joey Restaurant (Los Angeles) and Joey Restaurant (Woodland Hills) Inc. (“Defendants”)

Ruling: The Motion to Compel Arbitration is GRANTED. The Court STAYS this action pending the resolution of arbitration.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.

This is an employment action. Defendants Joey Restaurant (Los Angeles) Inc. and Joey Restaurant (Woodland Hills) Inc. seek to compel arbitration of this matter based on an arbitration agreement purportedly signed by Plaintiff Kalkidan as a component of her employment.

Plaintiff argues that the subject agreement is unenforceable because it violates contract formation and interpretation, it is procedurally and substantively unconscionable, and it is precluded by the Ending Force Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFA”).

First, as to the existence of a valid agreement, Plaintiff does not dispute that she did not sign the purported arbitration agreements, rather she asserts that the document which she and Defendants signed was a single page of generic boilerplate language which did not state anything about arbitrating the claims at bar and that this document could have been attached to any number of preceding pages. However, Defendants provide a sworn affidavit by Genieva Helm, the assistant general manager for Joey Restaurant (Woodland Hills) to show that Plaintiff was made aware that the document she signed dealt with arbitration. While Defendants also provide the declaration of Zach Helm, the head chef for Joey Restaurant (Los Angeles) who also worked for Joey Restaurant (Woodland Hills), the declaration will not be considered because it fails to provide the date of execution. (See Code Civ. Proc., § 2015.5.) Ms. Helm declares that in 2019, she conducted a new employee orientation which Plaintiff attended, and that she read the entire arbitration agreement and addressed any questions by employees. (Helm Decl. ¶¶ 3-4.) Ms. Helm states that Plaintiff did not ask for more time to review and that she did not have any questions. (Id. ¶ 4.) While Ms. Helm’s declaration is sufficient to satisfy that the arbitration agreement signed in 2019 was clearly identified as an arbitration agreement, Defendants provide no evidence making a similar showing for the purported arbitration agreement signed in 2020. Defendants only provide a declaration by Beth Bolyard, the vice president of human resources for Defendants, which provides that Plaintiff signed another arbitration agreement on May 4, 2020. However, based on the new employee orientation procedures Ms. Helm provides and the 2020 document itself, Defendants sufficiently show that Plaintiff was likely aware that she was signing an arbitration agreement. Indeed, the signature page of the 2020 agreement mentions both an arbitrator and the Federal Arbitration Act. These words alone would be sufficient to put Plaintiff on notice as to the nature of the document she was signing. Thus, Defendants satisfy their burden in showing that there was an agreement to arbitrate.

As to the scope of Plaintiff’s claims, the Court finds that the Arbitration Agreement applies to the claims at issue as they arose from Plaintiff’s employment Defendants. The agreed to submit to binding arbitration, including “all claims or disputes which a court otherwise would be authorized by law to resolve arising out of [her] employment, its termination, or this Agreement, including but not limited to claims for … employment discrimination or harassment … wrongful discharge … retaliation … claims under the California Labor Code … damages.…” (Bolyard Decl. ¶ 6, Exhib. A, ¶ 10, Exhib. B.) The causes of action alleged by Plaintiff: (1) Race Discrimination; (2) Gender Discrimination; (3) Sexual Harassment; (4) Retaliation; (5) Failure to Prevent Discrimination and Harassment; (6) Racial Harassment; (7) Violation of Labor Code § 1102.5; and (8) Wrongful Constructive Termination in Violation of Public Policy, are based on allegations related to Plaintiff’s employment with Defendants. Thus, the Arbitration Agreement is applicable to the instant claims.

Defendants argue that the EFA does not apply here because Plaintiff’s sexual harassment claim did not arise on or after March 3, 2022. On the other hand, Plaintiff claims that since there is no precedent on how courts may assess when employment discrimination claims and disputes “accrue” or “arise” within the meaning of this relatively new legislation, the Court should interpret it in the light most favorable to Plaintiff, and since Plaintiff filed her complaint against Defendant on September 7, 2022, her “dispute” arose after EFAA’s enactment in March 2022. On March 3, 2022, President Joe Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The EFA amends the Federal Arbitration Act, 9 U.S.C. § 1, et seq., and renders unenforceable (at option of person alleging assault or harassment) pre-dispute arbitration agreements relating to claims of sexual assault or sexual harassment:¿

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, subd. (a).)

The EFA became effective March 3, 2022, and states: “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.” (PL 117-90, March 3, 2022, 136 Stat 26, emphasis added.)¿

Here, Plaintiff signed the Arbitration Agreement on April 19, 2019 and May 4, 2020 (Bolyard Decl. ¶¶ 6, 10, Exhibs. A, B.), and all the events constituting Plaintiff’s claim occurred between January 2019 and July 2020. (FAC ¶ 17.) Despite Plaintiff’s argument, the EFA explicitly does not apply to Plaintiff’s claim. Accordingly, arbitration is not precluded by the EFA.

Plaintiff also argues the Arbitration Agreement is unenforceable as it is both procedurally and substantively unconscionable. “ ‘[U]nconscionability has both a “procedural” and a “substantive” element,’ the former focusing on “oppression” or “surprise” due to unequal bargaining power, the latter on “overly harsh” or “one-sided” ’results. [Citation.] ‘The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.’ [Citation.] But they need not be present in the same degree.... [T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114.)

Plaintiff’s arguments of procedural unconscionability fail as the procedure surrounding the signing of the arbitration agreements belie Plaintiff’s assertion that she had insufficient time to review or that she was provided insufficient information by Defendants about the documents’ contents. There is no evidence of oppression or surprise due to unequal bargaining power, or overly harsh and one-sided results. Additionally, there is no evidence to show that Plaintiff did not have an opportunity to review, question, or challenge the agreement on the date of its completion. The Court finds that there was no procedural unconscionability.

Plaintiff’s arguments of substantive unconscionability likewise fail as the arbitration agreements do not improperly limit the amount of damages normally available under the statute.

The cost of arbitration will be paid equally by me and by the Company, except to the extent required by law if I assert a claim under a state or federal statute prohibiting discrimination in employment, or a similar statutory, constitutional, public policy claim, or other claim for which the Company is legally required to bear the costs of arbitration (a “Statutory Claim”). ...

(Bolyard Decl., Exhibs. A and B.) The agreement also provides for adequate discovery: “[t]he Arbitrator shall be authorized to order all parties to conduct reasonable and adequate discovery in accordance with state law to enable each party to adequately arbitrate their claims.” (Id.) The agreement also provides for judicial review of the arbitrator’s award or enforcement. Finally, the Court finds that the cost-splitting provision does not render the agreement unconscionable since it only allows for such where not precluded by state or federal law. (See Code Civ. Proc., § 1284.2.)

Accordingly, the Arbitration Agreement is neither procedurally nor substantively unconscionable.

The Motion to Compel Arbitration is GRANTED. The Court STAYS this action pending the resolution of arbitration.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.