Judge Lynne M. Hobbs, Case Number: 24STCV14408, Date: 2024-09-10 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV14408, Date: 2024-09-10 Tentative Ruling

Case Number: 24STCV14408 Hearing Date: September 10, 2024 Dept: 61

ELIZABETH SANCHEZ vs MIDWAY RENT A CAR, INC.

TENTATIVE

Defendant Midway Rent A Car’s Motion to Compel Arbitration is DENIED.

Plaintiff to provide notice.

DISCUSSION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendant Midway Rent a Car, Inc. (Defendant) moves to compel arbitration of Plaintiff Elizabeth Sanchez’s (Plaintiff) claims based on an arbitration agreement executed by Plaintiff electronically on July 27, 2022. (Marzo Decl. Exh. A.)

Plaintiff in opposition contends that the agreement is unenforceable under 9.U.S.C. § 402, otherwise known as Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA). (Opposition at pp. 5–8.)

The EFAA prevents the enforcement of arbitration agreements for a “sexual harassment dispute,” and further states that “no predispute arbitration agreement . . . shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the . . . sexual harassment dispute.” (9 U.S.C. § 402, subd. (a).) Although federal law governs the determination of the statute’s applicability to a given case (See 9 U.S.C. § 402, subd. (b)), the phrase “sexual harassment dispute” is defined in another section as follows:

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.

(9 U.S.C. § 401, subd. (4).)

Under California law, “the prohibition against sexual harassment includes protection from a broad range of conduct, ranging from expressly or impliedly conditioning employment benefits on submission to or tolerance of unwelcome sexual advances, to the creation of a work environment that is hostile or abusive on the basis of sex.” (Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 277.) Under Government Code § 12940, subd. (j)(4)(C), harassment “because of sex” includes “sexual harassment, gender harassment, and harassment based on pregnancy, childbirth, or related medical conditions.” Plaintiff’s claims here, sounding in discrimination and harassment based on sex, fit the definition of sexual harassment under California state law, and thus under the EFAA.

Defendant in reply argues that the applicability of the EFAA must be decided by the arbitrator, pursuant to the arbitration agreement’s delegation clause. (Reply at pp. 1–2.) Defendant neglects subsection (b) of 9 U.S.C. § 402, which states as follows:

An issue as to whether this chapter applies with respect to a dispute shall be determined under Federal law. The applicability of this chapter to an agreement to arbitrate and the validity and enforceability of an agreement to which this chapter applies shall be determined by a court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator. (9 U.S.C. § 402, subd. (b), italics added.) Thus the delegation clause has no bearing on a determination whether the EFAA applies.

Defendant argues that Plaintiff has not pleaded a viable sexual harassment claim, because “the core of her sexual harassment claim is actually grounded in wage and hour complaints (i.e. her claimed inability to take rest breaks),” and because her claim is grounded on “a few isolated events.” (Reply at pp. 2–4.)

The protections of 9 U.S.C. § 402 apply only to viably pleaded claims. (See Johnson v. Everyrealm, Inc. (S.D.N.Y., 2023) 2023 WL 2216173, at *1 [holding that statute prevented enforcement of arbitration agreement as to a “viably pled sexual harassment dispute”].) The elements of a claim for FEHA harassment are (1) plaintiff belongs to a protected group; (2) plaintiff was subject to unwelcome harassment; (3) the harassment complained of was based on plaintiff’s membership in the protected group; (4) the harassment complained of was sufficiently pervasive so as to alter the conditions of employment and create an abusive working environment; and (5) respondeat superior.” (See Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1122.)

“Whether the sexual conduct complained of is sufficiently pervasive to create a hostile or offensive work environment must be determined from the totality of the circumstances. The plaintiff must prove that the defendant's conduct would have interfered with a reasonable employee's work performance and would have seriously affected the psychological well-being of a reasonable employee and that she was actually offended.” (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 609–10, citations omitted.)

Plaintiff alleges that she was accosted as to her whereabouts while on a rest break in the bathroom, and informed her female supervisor that she was on her period, unaware that she was on speakerphone and that a male manager could hear. (Complaint ¶ 11.) The male manager asked Plaintiff over the phone if she “put a plug in it,” and boisterously repeated the question in front of her other coworkers when she returned from her break. (Complaint ¶ 12.) Plaintiff alleges that nothing was done in response to her complaint about this incident. (Complaint ¶ 12–14.) Plaintiff further alleges that drivers contracted to work with Defendant called her a “rat,” “bitch,” “snitch,” and “whore,” in one case yelling at her, in an intimidating and hostile manner. (Complaint ¶¶ 16–17.) When Plaintiff complained of this harassment, she was given a pretextual disciplinary write-up. (Complaint ¶ 20.) When Plaintiff was called into a meeting to discuss her complaints on her day off, she was terminated on the pretext of attending the meeting not in uniform. (Complaint ¶ 23.)

Plaintiff pleads a viable harassment claim here. She pleads that she was publicly humiliated by her manager for being on her period, and thereafter subject to hostile and intimidating bouts of expressly sex-related insults by workers contracted for Defendant, which Defendant did nothing to remedy. A trier of fact need not embrace Defendant’s characterization of these allegations as relating more to Plaintiff’s rest-break claims, or deny the sex-based character of the insults that she alleges. “[W]here the severity of frequent abuse is questionable, it is more appropriate to leave the assessment to the fact-finder than for the court to decide the case on summary judgment.” (Davis v. Team Elec. Co. (9th Cir. 2008) 520 F.3d 1080, 1096.) Plaintiff’s claim thus warrants application of the EFAA, rendering the arbitration agreement unenforceable.

The applicability of 9 U.S.C. § 402 forecloses enforcement of the arbitration agreement as to all claims alleged here. The prohibition on enforcing arbitration agreements applies to “a case which . . . relates to the . . . sexual harassment dispute,” not the particular sexual harassment claim. (9 U.S.C. § 402, subd. (a); see Johnson v. Everyrealm, Inc. (S.D.N.Y., 2023) 2023 WL 2216173, at *1 [holding prohibition on arbitrating sexual harassment disputes applied to “entire case”].) Defendant’s argument that this court should sever the harassment claims ignores the statutory text, which refers to cases, not claims. (Reply at p. 6.) And although Defendant argues that Plaintiff’s harassment claim is distinct from her meal and rest break claim, Defendant elsewhere argues that her meal and rest break allegations comprise “the core of her sexual harassment claim.” (Reply at p. 5.) While this is something of an overstatement, there is factual overlap between the claims. Severing them is impermissible under federal law.

The motion is therefore DENIED.