Judge Robert B. Broadbelt, Case Number: 24STCV04861, Date: 2024-08-05 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 24STCV04861, Date: 2024-08-05 Tentative Ruling

The court considered the moving, opposition, and reply papers filed in connection with this motion.

The court rules on plaintiff Rachel Edwards’s evidentiary objections, filed on July 24, 2024, as follows:

The court rules on defendant BevMo! Inc.’s evidentiary objections, filed on July 29, 2024, as follows:

Defendant BevMo! Inc. (“Defendant”) moves the court for an order (1) compelling plaintiff Rachel Edward (“Plaintiff”) to submit all the claims alleged in her Complaint to binding arbitration, and (2) dismissing, or, alternatively, staying this action pending completion of arbitration.

As a threshold matter, the court finds that Defendant has met its burden to show—and Plaintiff does not dispute—that the Federal Arbitration Act (9 U.S.C. § 1 et seq.) (the “FAA”) governs this motion. (Evenskaas v. California Transit, Inc. (2022) 81 Cal.App.5th 285, 292 [“The party asserting the FAA applies to an agreement has ‘the burden to demonstrate FAA coverage by declarations and other evidence’”] [internal citation omitted].)

“‘The FAA’s basic coverage provision, section 2, makes the FAA applicable to contracts “evidencing a transaction involving commerce.” (9 U.S.C. § 2.) Courts broadly construe section 2 to “provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause.” [Citation.] “Accordingly, in most cases, the FAA mandates arbitration when contracts involving interstate commerce contain arbitration provisions.” ’ [Citations.]” (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 761-762; 9 U.S.C. § 2 [“A written provision in . . . a contract evidencing a transaction involving commerce” to arbitrate a controversy shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for revocation of any contract].) “The United States Supreme Court has identified ‘three categories of activity that Congress may regulate under its commerce power: (1) “the use of the channels of interstate commerce”; (2) “the instrumentalities of interstate commerce, or persons or things in interstate commerce, . . .”; and (3) “those activities having a substantial relation to interstate commerce, . . . i.e., those activities that substantially affect interstate commerce.” ’ [Citations.]” (Evenskaas, supra, 81 Cal.App.5th at p. 293.)

Defendant has submitted evidence establishing that (1) it owns and operates stores in California, Arizona, and Washington, (2) it sells products that that come from various states in the United States and internationally, and (3) it conducts business through its website, which allows it to sell products to customers in all 50 states. (LePage Decl., ¶ 2.) Thus, Defendant has shown that it is involved in interstate commerce. While Defendant did not submit evidence of Plaintiff’s job duties, Plaintiff has submitted her declaration, in which she states that, during her employment with Defendant, her primary duties included working with inventory, ensuring information in the computers was updated, receiving new shipments, and working with vendors. (Edward Decl., ¶ 2.)

Based on the evidence presented by the parties in connection with this motion, the court finds that (1) Defendant is involved in activities that substantially affect interstate commerce, (2) Plaintiff, in performing her job duties while working for Defendant, was involved in those activities (e.g., by working with inventory delivered from other states and internationally, receiving shipments of those goods, etc.), such that (3) the parties’ arbitration agreement is a contract involving interstate commerce and is therefore governed by the FAA. (Mendoza, supra, 75 Cal.App.5th at pp. 761-762; 9 U.S.C. § 2.)

The FAA requires courts to direct parties to proceed to arbitration on issues covered by an arbitration agreement upon a finding that the making of the arbitration agreement is not in issue.¿ (9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostic Sys. (9th Cir. 2000) 207 F.3d 1126, 1130.)¿ “The court’s role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.”¿ (Chiron Corp., supra, 207 F.3d at p. 1130.)¿ The FAA reflects “both a ‘liberal federal policy favoring arbitration,’ [citation], and the ‘fundamental principle that arbitration is a matter of contract,’ [citation].”¿ (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.)¿¿¿¿

“‘ “The party seeking to compel arbitration bears the burden of proving the existence of an arbitration agreement, while the party opposing the petition bears the burden of establishing a defense to the agreement’s enforcement.” ’”¿ (Beco v. Fast Auto Loans (2022) 86 Cal.App.5th 292, 302.)¿ To determine the existence of an arbitration agreement, the court uses “a three-step burden-shifting process.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755.) “The arbitration proponent must first recite verbatim, or provide a copy of, the alleged agreement. [Citations.] A movant can bear this initial burden ‘by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature.’” (Ibid. [internal citations omitted].) “If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement’s existence . . . .” (Ibid.) If the opposing party meets its burden to “submit sufficient evidence to create a factual dispute” as to the existence of the agreement, the burden shifts back to the arbitration proponent, who retains the ultimate burden of proving its existence by a preponderance of the evidence. (Ibid.; Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165-166.)

First, the court finds that Defendant has met its initial burden to attach a copy of the arbitration agreement purporting to bear Plaintiff’s signature. (Iyere, supra, 87 Cal.App.5th at p. 755.) Defendant has submitted the “Arbitration and Class Action Waiver (‘Agreement’)” (the “Arbitration Agreement”) dated November 21, 2019 and bearing the printed name of Plaintiff. (LePage Decl., Ex. 1, Arbitration Agreement.) The Arbitration Agreement provides that “[a]ny legally-cognizable controversy or claim arising out of or relating to [the employee’s] employment or termination of employment (including any post-termination claim) that cannot be resolved between the parties themselves, shall on the written request of either party, be submitted and resolved by final and binding arbitration consistent with the Federal Arbitration Act, the California Arbitration Act, or their successors.” (LePage Decl., Ex. 1, Arbitration Agreement, p. 1.) The Arbitration Agreement further provides that covered claims include those “pertaining to wrongful or constructive discharge, personal injuries or other civil wrongs, violations of public policies or anti-discrimination statutes.” (Ibid.) Excluded from the scope of the Arbitration Agreement are claims for workers’ compensation benefits and unemployment insurance benefits. (Ibid.) Thus, the court finds that Defendant has met its initial burden to attach a copy of an arbitration agreement purportedly bearing Plaintiff’s electronic signature.

Second, the court finds that Plaintiff has not met her burden to identify a factual dispute as to the Arbitration Agreement’s existence or the authenticity of her signature. (Iyere, supra, 87 Cal.App.5th at p. 755.) Plaintiff has submitted her declaration, in which she states that, while she was instructed to complete several forms as a condition of her employment, she does not recall signing forms regarding arbitration. (Edward Decl., ¶ 4.) However, she does not dispute that she did sign various forms as instructed by Defendant. (Edward Decl., ¶¶ 4-5.) The court finds that the sole statement in her declaration stating that she does not recall signing the Arbitration Agreement is insufficient to create a factual dispute about the authenticity of her signature. (Iyere, supra, 87 Cal.App.5th at p. 755.)

Third, even if Plaintiff had met her burden to identify a factual dispute as to the authenticity of her electronic signature, the court finds that Defendant has met its ultimate burden of proving, by a preponderance of the evidence, the authenticity of Plaintiff’s signature and the Arbitration Agreement. (Iyere, supra, 87 Cal.App.5th at p. 755.)

Here, the Arbitration Agreement bears Plaintiff’s electronic signature. (LePage Decl., Ex. 1, p. 2.) An electronic signature “is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of 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, subd. (a).) “For example, a party may establish that the electronic signature was ‘the act of the person’ 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 safety precautions.” (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 545.)

Defendant has submitted the declaration of its Director, People & Culture, Lyndsey LePage, who has access to, inter alia, personnel files, including Plaintiff’s personnel file. (LePage Decl., ¶¶ 2, 4, 11.) LePage has described the onboarding process in November 2019 (i.e., at the time that Plaintiff signed the Arbitration Agreement) as follows. (LePage Decl., ¶ 6.) Prior to the start of their employment with Defendant, prospective employees were electronically provided with a number of onboarding documents, including the Employee Handbook and an arbitration agreement. (LePage Decl., ¶ 6.) The onboarding process was conducted using an online website, which was initiated when Defendant sent each prospective employee an email to the personal email address identified on the prospective employee’s application. (LePage Decl., ¶ 7.)

The email contained a unique hyperlink that directed the prospective employee to Defendant’s onboarding site, which expired several days after receipt of the email. (Ibid.) Prospective employees then logged into the website using their full legal name and the last four digits of their Social Security numbers. (LePage Decl., ¶ 8.) Once logged in, the prospective employee was presented with a screen (1) requiring the employee to consent to electronically completion of the onboarding documents, and (2) informing the employee that their “click” was a stand-in for their written signature. (LePage Decl., ¶ 9.) Prospective employees were required to consent to the e-signature agreement described above in order to proceed with the onboarding documents. (Ibid.) Thereafter, the prospective employee was presented with a screen to view specific onboarding documents, including the Arbitration Agreement. (LePage Decl., ¶ 10.) To sign the Arbitration Agreement and have the employee’s signature recorded and date-stamped, a prospective employee must have viewed the document, closed the pop-up window, and clicked the separate link to sign the agreement. (Ibid.)

Thus, the court finds that Defendant has shown that, in order for Plaintiff’s electronic signature to appear on the Arbitration Agreement, Plaintiff would have had to complete the procedure set forth above, including by opening the unique hyperlink to access the onboarding site and logging on with unique information. The court therefore finds that Defendant has met its burden of producing prima facie evidence of the existence of an agreement to arbitrate. (Iyere, supra, 87 Cal.App.5th at p. 755; Bannister, supra, 64 Cal.App.5th at p. 545.)

The court further finds that the Arbitration Agreement encompasses the claims alleged in the Complaint because (1) it extends to claims “arising out of or relating to [Plaintiff’s] employment or termination of employment” with Defendant, and (2) Plaintiff’s causes of action arise out of the sexual harassment committed against her while working for Defendant. (LePage Decl., Ex. 1, Arbitration Agreement, p. 1; Compl., ¶¶ 13, 36, 57, 79, 98, 112-113.)

Thus, the court finds that there exists an agreement to arbitrate this controversy between Plaintiff and Defendant.

3. Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (9 U.S.C. §§ 401, 402) (the “EFAA”), enacted on March 3, 2022, “voids predispute arbitration clauses in cases . . . involving sexual harassment allegations.” (Murrey v. Superior Court (2023) 87 Cal.App.5th 1223, 1230.) Under the EFAA, “at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute . . . , 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 court finds that Plaintiff has met her burden to show that the Arbitration Agreement is a predispute arbitration agreement relating to a sexual harassment dispute and is therefore invalid and unenforceable under the EFAA. (9 U.S.C., § 402, subd. (a).)

As a threshold matter, the parties do not appear to dispute that Plaintiff has alleged, in support of each cause of action, claims constituting sexual harassment. The court finds that this action constitutes a case “relat[ing] to the sexual assault dispute or the sexual harassment dispute” within the scope of the EFAA. (Compl., ¶¶ 13, 36, 57, 79, 98-99, 113-114; (9 U.S.C., § 402, subd. (a).) Instead, Defendant has argued, and Plaintiff has disputed, that the EFAA does not apply to Plaintiff’s claims because they “accrued prior to the enactment of the act.” (Mot., p. 9:22-24.) The court disagrees.

The parties agree that the EFAA applies “‘with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act.’” (Kader v. Southern California Medical Center, Inc. (2024) 99 Cal.App.5th 214, 222 [quoting statutory note Pub.L. No. 117-90, § 3].)

Thus, the EFAA applies to any sexual harassment dispute or claim arising or accruing after the March 3, 2022. (Id. at pp. 219 [“The [EFAA] became effective on March 3, 2022], 222.) Defendant contends that, because the conduct underlying the sexual harassment dispute occurred until August 2021, Plaintiff’s claims fall outside of the scope of the EFAA. (Compl., ¶¶ 12-13; Mot., p. 9:22-24; Reply, p. 2:12-15 [“All alleged conduct occurred prior to the act’s effective date of March 3, 2022”].) However, that is not the correct standard by which to determine the date of a sexual harassment dispute under this statute; while “the date that a dispute has arisen for purposes of the [EFAA] depends on the unique facts of each case,” “a dispute does not arise merely from the fact of injury.” (Kader, supra, 99 Cal.App.5th at p. 217.) Instead, “[a] dispute arises when one party asserts a right, claim, or demand, and the other side expresses disagreement or takes an adversarial posture. [Citation.] In other words, ‘[a] dispute cannot arise until both sides have expressed their disagreement, either through words or actions.’” (Id. at pp. 222-223 [internal citation omitted].) This is further supported by the EFAA’s defining of a sexual assault dispute to mean “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable” law. (9 U.S.C., § 401, subd. (4) [emphasis added]; Kader, supra, 99 Cal.App.5th at p. 223-224.)

Thus, although the conduct constituting sexual harassment was alleged to have taken place beginning in 2020, and presumably concluding in 2021 upon Plaintiff’s constructive termination, those dates do not constitute the accrual of a sexual harassment dispute under the EFAA as the parties contend. (Compl., ¶¶ 12-13.) Defendant did not present other argument or authority establishing that the sexual harassment dispute that is the basis of Plaintiff’s Complaint arose at any other time before March 3, 2022, instead contending that, because the sexual harassment occurred before that date, Plaintiff may not elect to invalidate the Arbitration Agreement under the EFAA. However, it appears to the court that the earliest date on which the sexual harassment dispute had arisen was January 18, 2024, i.e., the date on which Plaintiff filed charges against Defendant with the Civil Rights Department.[1] (Compl., Ex. A, p. 1 [stating “Date Filed: January 18, 2024”]; Kader, supra, 99 Cal.App.5th at p. 224 [finding there was no assertion of right, claim, or demand prior to filing charges with the Department of Fair Employment and Housing].) Thus, the sexual harassment dispute appeared to arise no earlier than January 18, 2024, i.e., after the date of enactment of the EFAA. (Kader, supra, 99 Cal.App.5th at p. 219, 222.)

Thus, the court finds that (1) the parties have not established that the sexual harassment dispute arose earlier than January 18, 2024, i.e., the date on which Plaintiff lodged her administrative complaint; (2) the parties executed the Arbitration Agreement before that date, on November 21, 2019; and (3) the sexual harassment dispute arose after the date that the EFAA was enacted (March 3, 2022) and therefore invalidates the predispute agreement to arbitrate the sexual harassment dispute set forth in the parties’ Arbitration Agreement. (Compl., Ex. A; LePage Decl., Ex. 1, Arbitration Agreement, p. 2; Kader, supra, 99 Cal.App.5th at p. 224 [“[t]he trial court properly concluded that the [EFAA] applies, because the arbitration agreement was executed before the dispute arose between the parties”]; 9 U.S.C., § 402, subd. (a).)

For the reasons set forth above, the court finds that the Arbitration Agreement is invalid and unenforceable and therefore denies Defendant’s motion. (9 U.S.C., § 402, subd. (a).) In light of this finding, the court does not reach Plaintiff’s arguments regarding the alleged unconscionability of the Arbitration Agreement.

The court denies defendant BevMo! Inc.’s motion to compel arbitration and stay or dismiss proceedings.

The court orders that the stay of this case issued in the court’s May 10, 2024 minute order is lifted.

[1] As set forth above, Defendant did not point to any other allegations in the Complaint or evidence establishing that a dispute over the alleged sexual harassment arose before this date. Further, while the court notes that Plaintiff has alleged that she complained to Defendant’s manager, Amber Edward, Defendant did not argue that such complaints constitute an assertion of a right, claim, or demand. (Compl., ¶ 12, subds. (u), (z), (ee).) Moreover, even if the court were to construe those complaints to be a right, claim, or demand, it does not appear that Defendant “expresse[d] disagreement or t[ook] an adversarial posture” because Plaintiff has alleged that the manager “seemed to understand Plaintiff’s perspective,” assured Plaintiff that she would report the harasser to Human Resources, and informed Plaintiff that she reported the conduct, suggesting that Defendant did not dispute the harassing conduct or disagree that nonmoving defendant Jimenez was harassing Plaintiff. (Compl., ¶ 13, subds. (v), (z), (cc); Kader, supra, 99 Cal.App.5th at pp. 222-223, 224 [the plaintiff alleged that one of his harassers threatened to fire him if he told anyone, implying that the harasser-defendant did not dispute the conduct].) Similarly, Plaintiff alleged that, when she lodged a formal complaint requesting to be transferred, Defendant transferred her to a different location, again suggesting that Defendant did not take an adversarial posture as it related to her complaint. (Compl., ¶ 13, subds. (jj), (kk).) Finally, while the Complaint alleges that manager Amber Edward yelled at Plaintiff and micromanaged her in retaliation for making complaints, that allegation does not suggest that Defendant, by engaging in such acts, was expressing disagreement with her complaints or taking an adversarial posture. (Compl., ¶ 13, subd. (dd).)

rachel edward ; Plaintiff, vs. bevmo! inc. , et al.; Defendants.	Case No.:	24STCV04861

	Hearing Date:	August 5, 2024

	Time:	10:00 a.m.

	[tentative] Order RE: defendant’s motion to compel arbitration and stay or dismiss proceedings