Judge: Maurice A. Leiter, Case: 23STCV22242, Date: 2024-02-16 Tentative Ruling

Case Number: 23STCV22242    Hearing Date: March 12, 2024    Dept: 54

Hearing Date: March 12, 2024

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant The Guestology Group, Inc.

Responding Party: Plaintiff Amanda Lynch

T/R:     DEFENDANT’S MOTION TO COMPEL ARBITRATION IS DENIED AS TO THE CLAIMS FOR SEXUAL HARASSMENT AND DISCRIMINATION AND GRANTED AS TO THE REMAINING CLAIMS.

THE ACTION IS STAYED.

DEFENDANT TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On September 14, 2023, Plaintiff filed a complaint against Defendants, asserting 9 causes of action for Labor Code and FEHA violations, retaliation, and wrongful termination.

ANALYSIS

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate a controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….”  (CCP § 1281.2.)  The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact.   (CCP § 1281.2(a)-(c).)  “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

A.          Existence of Arbitration Agreement and Applicable Law

Defendant moves to compel arbitration based on the arbitration agreement executed by Plaintiff on July 10, 2022. (Decl. Garcia, Exh. A.) The agreement provides, “The employee identified below (‘Employee’) and [COMPANY] (‘Company’) agree to utilize binding arbitration as the sole and exclusive means to resolve all disputes that may arise between Employee and the Company” (Id.) The agreement states that it is governed by the FAA. Plaintiff also executed an arbitration agreement with the former owner of the business where she was employed on June 21, 2021.

Defendant has met its burden to establish an agreement to arbitrate. The burden shifts to Plaintiff to establish any defenses to enforcement.

B. Enforceability of Agreement

1. Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

Plaintiff asserts that the agreement is unenforceable under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFASASHA”), which provides, “...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)).

Plaintiff alleges in part that her supervisors harassed and discriminated against her based on her gender after the enactment of EFASASHA. Plaintiff has sufficiently alleged a sexual harassment claim that is subject to EFASASHA.

The Court finds that Plaintiff’s claims relating to sexual harassment and discrimination are exempt from arbitration. Where individual causes of action contain both claims of harassment and discrimination based on gender after the enactment of EFASASHA as well as other claims, the portions of the causes of action related to the other claims will be addressed at arbitration; the claims subject to EFASASHA will be addressed subsequently.

2. Unconscionability

Plaintiff asserts that the arbitration agreement is procedurally unconscionable as it is an adhesion contract. Regarding procedural unconscionability, the California Supreme Court has found:

“[T]here are degrees of procedural unconscionability. At one end of the spectrum are contracts that have been freely negotiated by roughly equal parties, in which there is no procedural unconscionability . . . . Contracts of adhesion that involve surprise or other sharp practices lie on the other end of the spectrum. [Citation.] Ordinary contracts of adhesion, although they are indispensable facts of modern life that are generally enforced (see Graham v. Scissor–Tail, Inc. (1981) 28 Cal.3d 807, 817–818, 171 Cal.Rptr. 604, 623 P.2d 165), contain a degree of procedural unconscionability even without any notable surprises, and ‘bear within them the clear danger of oppression and overreaching.’ (Id. at p. 818 [171 Cal.Rptr. 604, 623 P.2d 165].)” (Gentry v. Superior Court (2007) 42 Cal.4th 443, 469, 64 Cal.Rptr.3d 773, 165 P.3d 556.)

(Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244.)

Generally, in the employer-employee context, there is unequal bargaining power. (See Amendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 115 [“in the case of preemployment arbitration contracts, the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.”]

The Court finds a low degree of procedural unconscionability exists here, as the agreement is one of adhesion. This low degree of procedural unconscionability does not render the arbitration agreement unconscionable; to find the agreement unenforceable, the degree of substantive unconscionability must be high. (See Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 981.)

Plaintiff asserts that the agreement is substantively unconscionable because it does not identify the “employer” or location for arbitration and does not provide the arbitration rules or arbitrator selection process. The agreement also requires that a second arbitrator perform any “appellate review.” These issues do not establish substantive unconscionability. There is no indication the agreement is unfairly one- sided.

Defendant’s motion to compel arbitration is DENIED as to the claims for sexual harassment and discrimination and GRANTED as to the remaining claims. The action is STAYED.