Judge: Michael Shultz, Case: 24CMCV00358, Date: 2024-08-06 Tentative Ruling
Case Number: 24CMCV00358 Hearing Date: August 6, 2024 Dept: A
24CMCV00358
Sharaya Brown v. Forward Air Service, LLC
[TENTATIVE] ORDER
I.
BACKGROUND
The complaint, filed
on March 13, 2024, alleges that Defendant, Forward Air Service, LLC
(“Defendant”) employed Plaintiff as a dispatcher at Defendant’s Carson
location. Plaintiff alleges that other employees subjected her to sexual
harassment, discrimination, and then retaliation after Plaintiff complained to
Defendant about the unlawful conduct. Plaintiff alleges 12 causes of action for
violations of the Fair Employment and Housing Act, as well as for penalties in
violation of wage and hour requirements of the Labor Code.
II.
ARGUMENTS
Defendant
moves to compel arbitration of this matter as Plaintiff agreed to arbitrate all
disputes relating to her employment with Defendant. As part of the “onboarding”
process, Plaintiff was given the opportunity to review the mandatory
arbitration agreement with independent advisors of her choice. The agreement
expressly provides that is governed by the Federal Arbitration Act (“FAA”). The
agreement is valid and should be enforced. Plaintiff is not entitled to any
exemptions from mandatory arbitration. The agreement is not unconscionable.
In
opposition, Plaintiff argues that her claims are not governed by the FAA
because this action does not involve interstate commerce as Plaintiff’s duties
related to assisting drives to locations within California. The agreement is
procedurally and substantively unconscionable and cannot be enforced.
In
reply, Defendant reiterates that the FAA applies, and Plaintiff does not
dispute that she signed the arbitration agreement. The dispute arose for
purposes of the Act when the misconduct occurred.
III.
LEGAL STANDARDS
The court can order a matter to
arbitration if it determines that an agreement exists unless the right to
compel has been waived or grounds exist for the revocation of the agreement. (Code
Civ. Proc., § 1281.2.) The petitioning party’s burden is to
establish that a valid arbitration agreement exists by a preponderance of
evidence while responding party’s burden is to establish a defense to
enforcement. (Molecular
Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696,
705.)
IV.
DISCUSSION
Although
the agreement at issue states it is governed by the FAA, courts apply state law
to determine who is bound by an arbitration agreement and who may enforce it. (Thomas
v. Westlake (2012) 204
Cal.App.4th 605, 614, fn. 7); Rosenthal v. Great Western Fin.
Securities Corp. (1996) 14
Cal.4th 394, 410 ["Because
the California procedure for deciding motions to compel [arbitration] serves to
further, rather than defeat, full and uniform effectuation of the federal law's
objectives, the California law, rather than section 4 of the USAA, is to be followed
in California courts."].) (Gilliam Decl., Ex. A.)
Under Section 2 of the FAA, written
arbitration agreements are valid, irrevocable, and enforceable “save upon such
grounds as exist at law or in equity for the revocation of a contract.” (Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 629–630; 9 U.S.C.A. § 2.)
Section 3 of the FAA requires the Court to stay the action if it involves
issues referable to arbitration. (9 U.S.C.A. § 3.)
If a party challenges the validity of an agreement to arbitrate, as
Plaintiff argues here, the issue is properly determined by the court in the
first instance and not the arbitrator, unless there is “clear and unmistakable
evidence” that the parties so agreed. (Jackpot
Harvesting, Inc. v. Applied Underwriters, Inc. (2019) 33 Cal.App.5th 719,
731; Beco
v. Fast Auto Loans, Inc. (2022) 86 Cal.App.5th 292, 302.)
A. Defendant has established that Plaintiff signed an agreement to
arbitrate.
Defendant’s burden in moving to compel arbitration is to show the existence of an agreement, not its validity.
(Espejo v. Southern California Permanente
Medical Group (2016) 246
Cal.App.4th 1047, 1058
["as a preliminary matter the [trial] court is only required to make a
finding of the agreement's existence, not an evidentiary determination of its
validity.”].) To meet its burden, the moving party need only attach a copy of
the agreement to the petition and incorporate it by reference. (Id.
at 1058; Cal. Rules of Court, rule 3.1330 [“The provisions must be stated verbatim or
a copy must be physically or electronically attached to the petition and
incorporated by reference."].) Defendant submits a copy of the agreement
electronically signed by Plaintiff. (Ryan Gilliam Decl., Ex. A, pp. 10.)
Plaintiff separately acknowledged that she received and read the mandatory
arbitration agreement. (Gilliam Decl., Ex. B.)
Plaintiff does not expressly deny signing it, only that she doesn’t
recall signing or acknowledging it. (Plaintiff’s decl., ¶ 10.) However, "a
plaintiff can be bound by an arbitration agreement regardless of whether she
read it or was aware of it. (Dougherty
v. Roseville Heritage Partners (2020) 47
Cal.App.5th 93, 103–104.)
Therefore, the
Court may properly consider whether Plaintiff is bound by the arbitration
agreement.
B. Defendants have shown that Plaintiff electronically
signed the agreement to arbitrate.
Where electronic signatures are involved, the moving party is required
to authenticate the signatures where the opposing parties deny signing the
agreement. (See Ruiz
v. Moss Bros. Auto Group, Inc. (2014)
232 Cal.App.4th 836, 844.) Defendant
can attribute the signature to Plaintiff by showing the "efficacy of any
security procedure applied to determine the person to which the electronic
record or electronic signature was attributable.” (Civ. Code, § 1633.9, (a).) The effect of an electronic signature
attributed to a person "is determined from the context and surrounding
circumstances at the time of its creation, execution, or adoption, including
the parties' agreement, if any, and otherwise as provided by law." (Civ. Code, § 1633.9, (b).)
A party can
establish that the electronic signature was the act of Plaintiff “by presenting
evidence that a unique login and password known only to that person was required
to affix the electronic signature, along with evidence detailing the procedures
the person had to follow to electronically sign the document and the
accompanying security precautions.” (Bannister
v. Marinidence Opco, LLC (2021)
64 Cal.App.5th 541, 545.) This may
include evidence of any security procedures required to access the agreements
electronically or evidence to establish that the signers did access the on-line
portal, or when and at what time. (Ruiz,
supra at 844 [where the court of appeal found a “critical gap in the evidence” to
infer that the electronic signature was in fact the employee’s without evidence
to show that only the employee could have affixed the electronic signature.].)
Defendant has
satisfied its burden of establishing that Plaintiff electronically signed the mandatory
arbitration agreement. Mr. Gilliam is the vice president of Defendant who has
personal knowledge of the onboarding procedures and attests to the creation and
maintenance of business records. (Gilliam decl., ¶¶ 2 4-5.) Mr. Gilliam was
able to access the company’s tracking system showing Plaintiff electronically
signed the arbitration agreement. (Gilliam decl., Exs. A, B.) He avers that the
only way the agreement and acknowledgment signed by Plaintiff could be
generated was if Plaintiff logs onto the third-party application, creates a
password, and follows the procedures of the onboarding process. (Gilliam Decl.,
¶¶ 7, 9.)
C. The scope of the arbitration clause broadly
includes the claims alleged by Plaintiff.
The scope of
disputes requiring arbitration is broadly stated:
“This Agreement applies to any legal
dispute arising out of or related to Employee’s employment with Forward Air
Corporation or one of its affiliates, subsidiaries or related companies
including, but not limited to Forward Air, Inc., Forward Air Solutions, Inc.,
FAF, Inc., Total Quality, Inc., TQI Inc., Central States Trucking Co., Central
States Logistics, Inc. and TAF LLC (hereinafter collectively referred to as the
“Company”) or termination of employment.” (Gilliam decl., Ex. A.)
“… this Agreement is intended to apply
to the resolution of disputes that otherwise would be resolved in a court of
law, and therefore this Agreement requires all such disputes to be resolved
only by an arbitrator through final and binding arbitration and not by way of
court or jury trial. Such disputes include, without limitation, disputes
arising out of or relating to interpretation or application of this Agreement,
including the enforceability, revocability or validity of the Agreement or any
portion of the Agreement.” (Id.)
“… The Agreement also applies, without
limitation, to disputes with any entity or individual arising out of or related
to … the employment relationship or the termination of that relationship
(including post employment defamation or retaliation), …
“ … any and all wage & hour
claims), breaks and rest periods, termination, discrimination or harassment and
claims arising under the Uniform Trade Secrets Act, Civil Rights Act of 1964,
Americans With Disabilities Act, Age Discrimination in Employment Act, Family
Medical Leave Act, Fair Labor Standards Act, Employee Retirement Income
Security Act (except for claims for employee benefits under any benefit plan
sponsored by the Company.” (Id.)
The
broad scope of covered disputes also applies to claims alleged in the complaint
for harassment, racial, and gender-discrimination, wage, and hour claims in
violation of the Labor Code, wrongful termination, and retaliation.
D. Plaintiff has demonstrated that arbitration
of her sexual harassment dispute is precluded by statute.
Plaintiff
argues that her sexual harassment claims are exempt from arbitration,
notwithstanding the mandatory agreement to arbitrate under the "Ending
Forced Arbitration of Sexual Assault and Sexual Harassment Act" (“the Act”)
which became effective on March 3, 2022. (9 U.S.C.A. § 402 (West).) The statute provides that “at the election of
the person alleging conduct constituting a sexual harassment dispute or sexual
assault dispute, no pre-dispute arbitration agreement or pre-dispute
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. Any issue as to whether the Act
applies to a dispute is to be determined under federal law." (Kader
v. Southern California Medical Center, Inc. (2024) 99 Cal.App.5th 214, 221.)
The Act
shall apply "with respect to any dispute or claim that arises or accrues
on or after the date of enactment of this Act." (Kader at 222.) With respect to the date on which a dispute accrues, Kader held that “[w]e conclude the date that a dispute
has arisen for purposes of the Act is a fact-specific inquiry in each case, but
a dispute does not arise solely from the alleged sexual conduct. A dispute
arises when one party asserts a right, claim, or demand, and the other side
expresses disagreement or takes an adversarial posture. (Famuyide v.
Chipotle Mexican Grill, Inc. (D. Minn., Aug. 31, 2023, No. CV 23-1127
(DWF/ECW)) 2023 WL 5651915, p. *3 (Famuyide).) In other words, “[a]
dispute cannot arise until both sides have expressed their disagreement, either
through words or actions.” (Id. at *8.) Until there is a conflict or
disagreement, there is nothing to resolve in litigation. (Kader at 222-223.)
Therefore,
Plaintiff’s sexual harassment claim arises not from the date of occurrence, but
rather “when plaintiffs filed discrimination charges with a government agency” and
not “simply” when a plaintiff files an action in court. (Kader at 223.) Plaintiff alleges she lodged her
complaint with the Civil Rights Department pursuant to the FEHA on March 12,
2024. (Complaint, ¶ 24, Ex. A .pdf pp. 34.)
Accordingly,
while Plaintiff alleged that the sexual harassment took place during her
employment with Defendant on February, June, October, and December of 2021, a
“dispute” for purposes of the Act did not accrue until March 12, 2024, after
the effective date of the act. (Complaint,
¶¶ 12-16.) Therefore, the Act invalidates the requirement for mandatory arbitration.
Defendant
argues that Plaintiff complained about the alleged acts prior to Plaintiff’s
resignation on March 25, 2022, and Plaintiff also alleged that Defendant failed
to take action, the Act does not apply. (Complaint, ¶ 125.) Defendant’s alleged
inaction does not demonstrate that a conflict or disagreement had arisen.
Plaintiff
further alleges that Defendant constructively and wrongfully terminated
Plaintiff on March 25, 2022, and
disregarded Plaintiff’s right to be free from employment retaliation.
(Complaint, ¶ 18, 131.) Even if the date of accrual was triggered by the March
25, 2022, constructive termination, the Act became effect on March 3, 2022.
Defendant
next contends that the alleged acts do not constitute sexual harassment under
state law. (Mot. 15:17-22.). To establish a prima facie case of a hostile work
environment, Plaintiff must show that “(1) she is a member of a protected
class; (2) she was subjected to unwelcome harassment; (3) the harassment was
based on her protected status; (4) the harassment unreasonably interfered with
her work performance by creating an intimidating, hostile, or offensive work
environment; and (5) defendants are liable for the harassment." (Ortiz
v. Dameron Hospital Assn. (2019) 37
Cal.App.5th 568, 581.) The conduct complained of must be “severe
enough or sufficiently pervasive to alter the conditions of employment and
create a work environment that qualifies as hostile or abusive to employees
because of their [protected status]." (Ortiz at 582.) The environment will be considered “hostile”
depending on the totality of circumstances. (Id.) The conduct is
evaluated on an objective and subjective basis.
Plaintiff
has adequately alleged a claim for sexual harassment/hostile work environment. Plaintiff
alleges five instances of sexual harassment against Defendant consisting of
unwelcome touching of her body by her co-workers including rubbing her hands
“as if he was rubbing Plaintiff’s private parts,” making contact with her rear
end, allegedly making inappropriate statements that Plaintiff must have “had a
rough night,” telling Plaintiff she looked like a transgender character and
showing a screen shot, which was circulated to another employee, and taking
photographs of Plaintiff without her consent. (Complaint ¶ 12-18.) Plaintiff alleges she
felt scared and uncomfortable and could no longer work for defendant in that
environment. Plaintiff alleges she believed she was wrongfully terminated in
retaliation for her complaints of discrimination, harassment, and other alleged
unlawful employment practices. (Complaint, ¶¶ 154, 178.) Viewed through an objective and subjective
standard, the claim is adequately stated based on the totality of alleged
misconduct, which were not “sporadic or isolated” but were pervasive enough to
alter the conditions of Plaintiff’s employment.
If Plaintiff
adequately alleges a sexual harassment claim, exempt from arbitration under the
Act, then “as defined, the EFAA, at the election of the party making such an
allegation, makes pre-dispute arbitration agreements unenforceable with respect
to the entire case relating to that dispute." (Johnson
v. Everyrealm, Inc. (S.D.N.Y.
2023) 657 F.Supp.3d 535, 561 [wherein
the court denied the motion to compel arbitration as to the entire case for
sexual harassment, hostile work environment and discrimination of the basis of
gender, race, and ethnicity.]; Turner
v. Tesla, Inc. (N.D. Cal. 2023)
686 F.Supp.3d 917, 925 [ "This
claim [for wage and hour violations] is inherently intertwined with the other
causes of action such that it makes sense to have this claim proceed alongside
the other causes of actions.”].)
VI. CONCLUSION
Because
Plaintiff’s sexual harassment related claims are adequately alleged and are
exempt from arbitration under the Act, all other alleged causes of action are
inherently intertwined with the sexual harassment claim and are exempt from the
pre-dispute arbitration agreement. Accordingly, Defendant’s Motion to Compel
Arbitration and Stay the Action is DENIED. Whether or not the agreement is
unconscionable is of no consequence, as the entire matter is exempt from
mandatory arbitration in the first instance.