Judge: Mark H. Epstein, Case: 23SMCV01794, Date: 2023-09-06 Tentative Ruling

Case Number: 23SMCV01794    Hearing Date: September 6, 2023    Dept: I

The motion to compel arbitration is DENIED.  The court notes that the parties stipulated to late filings.  That is generally a bad idea.  Late filings require approval by the court.  The reason is that the court works these matters up in advance.  If the court is not aware that other papers will be filed, the court works up the matter without the papers.  That said, the court has considered both the opposition and the reply.

Plaintiff filed this sexual harassment and discrimination action against defendants.  Defendants have moved to compel arbitration, claiming that plaintiff so agreed as part of her employment contract.  Plaintiff opposes.

A party seeking to enforce an arbitration agreement has the initial burden of proving that such an agreement exists.  (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276.)  No matter how broad the alleged arbitration clause and no matter how much is purportedly for the arbitrator to decide in the first instance, whether there is an agreement at all is always for the court initially.  (Granite Rock Co. v. Int’l Bhd. Of Teamsters (2010) 561 U.S. 287; Suski v. Coinbase, Inc. (9th Cir. 2022) 55 F.4th 1227; Fleming v. Oliphant Financial, LLC (2023) 88 Cal.App.5th 13.)  That is true under California law and also the FAA.  Nothing in the FAA compels or even favors arbitration absent an agreement to arbitrate.  And that is where plaintiff’s opposition is centered.

Defendants claim that plaintiff signed the arbitration agreement on November 14, 2019.  That may be so, but she was terminated on April 1, 2020.  Terminating her employment terminated the arbitration agreement—at least as a going forward proposition.  (In other words, had plaintiff claimed that the 2020 termination was wrongful, the arbitration agreement would have come into play even though the employment was terminated.)  Plaintiff returned to defendants’ employ on September 19, 2022.  Plaintiff was given new documents.  Although the original hire date was listed as November 11, 2019, the rehire date was listed as September 19, 2022.  Because plaintiff signed updated documents, it is far from clear to the court that the 2019 agreements remained in force.  Indeed, there appears to be an integration clause in the new documents.  Nothing in that new batch of documents includes an arbitration provision.  Of course, defendants could easily have had plaintiff re-sign the arbitration agreement.  Defendants could even have told plaintiff that as a condition to being re-hired, the 2019 arbitration agreement would be incorporated into her new agreement.  But defendants did none of those things.  Thus, at bottom, the court has no evidence that, upon rehire, plaintiff agreed to be bound by the prior arbitration agreement.  As such, the motion must fail.

The court also notes a conflict with defendants’ argument and federal law.  In 2022, Congress enacted the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act” (the Act).  It added a provision of law stating that “Notwithstanding any other provision of this title, at the election of the person alleging a sexual harassment dispute or sexual assault dispute . . . 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 assault dispute or the sexual harassment dispute.”  (9 U.S.C. § 402(a).)  The statute applies to any dispute that arose or accrued on or after March 3, 2022.  (Pub. Law 117-90, sec. 3.)  Application of the Act is to be determined by the court, not the arbitrator.  Here, plaintiff asserts conduct coming within the statute.  The alleged conduct began in July 2021, but it continued through January 2023.  Thus, at least some of the conduct arose or accrued after the new law became effective.  As to that part at a minimum, arbitration must be denied.  And even were the court to agree that arbitration was proper as to conduct occurring before March 3, 2022, it would not stay the litigation pending arbitration.  Defendants appear to argue that the Act is not retroactive.  Whatever the normal rules might be for determining whether a law is retroactive, the court can safely ignore them.  Where Congress has stated its intent as to retroactivity expressly, that begins and ends the matter.  Here, Congress was clear.  And it is also clear that much of what plaintiff alleges occurred on or after March 3, 2022.  Paragraphs 15-41 make that abundantly clear.  Even if some of the conduct started earlier, the complaint would still come within the act.

Defendants seem to spend considerable time arguing the merits—that because in an earlier case plaintiff did not mention harassment, there must be no harassment.  But this is not the place to argue the merits, and the court suspects defendants know as much.  The only questions before the court are: (1) is there a binding arbitration contract (no) and (2) if so, does the Act bar enforcement thereof (yes).  Therefore, the motion to compel arbitration is DENIED.