Judge: Yolanda Orozco, Case: 22STCV25018, Date: 2023-02-01 Tentative Ruling
Case Number: 22STCV25018 Hearing Date: February 1, 2023 Dept: 31
MOTION TO COMPEL ARBITRATION &
STAY/DISMISS ACTION
TENTATIVE RULING
The Motion to Compel Arbitration is CONTINUED to March 2, 2023.
The
parties are to submit supplemental briefs as to whether the Ending Forced
Arbitration of Sexual Assault and Sexual Harassment Act of 2021 applies to
Plaintiff’s first cause of action, harassment based on sexual orientation.
Background
On August 03, 2022, Plaintiff Ronald Rosas filed a
Complaint against Defendants Beachbody LLC and Bree Andrews for:
(1) Sexual Orientation and/or Racial Harassment;
(2) Retaliation in violation of Govt. Code § 12900 et seq.
(3) Failure to Prevent Harassment and Retaliation;
(4) Retaliation in Violation of Lab. Code § 1101.5;
(5) Wrongful Termination in Violation of Public Policy, and
(6) Intentional Infliction of Emotional Distress.
On December 09, 2022, Defendant Beachbody LLC filed this
instant Motion to Compel Arbitration.
On January 19, 2023, Plaintiff filed opposing papers.
Defendant filed a reply on January 25, 2022.
Legal Standard
Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute.¿ (Code Civ. Proc., § 1281.2; see also Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.)¿¿¿
A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court¿(1998) 62 Cal.App.4th 348, 356-57.)¿¿ ¿
“If a court of competent
jurisdiction . . . has ordered arbitration of a controversy which is an issue
involved in an action or proceeding pending before a court of this State, the
court in which such action or proceeding is pending shall, upon motion of a
party to such action or proceeding, stay the action or proceeding until an
arbitration is had in accordance with the order to arbitrate or until such
earlier time as the court specifies.” (Code Civ. Proc., § 1281.4.)¿
Request for Judicial Notice
The Court may
take judicial notice of records of any court of record of the United States.
(Evid. Code, § 452(d)(2).) However, the Court may only judicially notice the
existence of the record, not that its contents are the truth. (Sosinsky v.
Grant (1992) 6 Cal.App.4th 1548, 1565.)
Defendant requests the judicial
notice of the following:
1) The January 31, 2018
decision by the Honorable Gregory Keosian of this Court in Kelly Rigg v.
Beachbody LLC, et al., LASC Case No. BC675838, wherein Judge Keosian
granted Defendant’s Motion to Compel Arbitration. A true and correct copy of
this 2018 Order is attached hereto as Exhibit A.
The Court GRANTS Defendant’s request for Judicial Notice.
Evidentiary Objections
Plaintiff submitted
evidentiary objections to the Declaration of Liz Dellums filed in support of
this instant Motion:
Objections Nos. 1-24 are
OVERRULED.
Objection No. 25 is
SUSTAINED.
The Declaration of Liz Dellums appropriately lays the
foundation for the admissibility of Exhibits 1-5 through the business records
exception to the hearsay rule. (See Evid. Code, §
1271.)
“A trial judge has broad discretion in admitting business records under Evidence Code section 1271, and it has been held that the foundation requirements may be inferred from the circumstances. Indeed, it is presumed in the preparation of the records not only that the regular course of business is followed but that the books and papers of the business truly reflect the facts set forth in the records brought to court.” (People v. Dorsey (1974) 43 Cal.App.3d 953, 961.) “A qualified witness need not be the custodian, the person who created the record, or one with personal knowledge in order for a business record to be admissible under the hearsay exception.” (Unifund CCR, LLC v. Dear (2015) 243 Cal.App.4th Supp. 1, 8.)
Plaintiff also submitted
evidentiary objections to the Declaration of Jonathan Gelfand filed in support
of this instant Motion:
Objection No. 1 is OVERRULED.
Defendant submitted evidentiary objections to the Declaration of Plaintiff Ronald Rosas filed in opposition to this instant motion.
Objections 1-9 are OVERRULED.
Discussion
Defendant Beachbody LLC seeks an Order to Compel Plaintiff to arbitrate his claims and an Order either dismissing this action or staying all proceedings.
Existence of an Agreement¿¿
Defendant asserts that Plaintiff electronically signed a valid arbitration agreement (the “Agreement”) on or about September 14, 2016. (Dellums Decl. ¶ 17, Ex. 3.)
The instructions to the “Dispute Resolution Agreement” specify that arbitration is not a mandatory condition of employment and that an employee can opt out of arbitration by submitting a “Dispute Resolution Agreement Opt Out Form.” (Dellums Decl. ¶¶ 9,10, 12, Ex. 2.)
The arbitration agreement is titled
“DISPUTE RESOLUTION AGREEMENT” and states in relevant part:
“This Agreement is
governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. and both parties
agree that it evidences a transaction involving commerce. . . . Except as it
otherwise provides, this Agreement is intended to apply to the resolution of
disputes that otherwise would be resolved 'in a court of law or before a forum
other than arbitration. Therefore, this Agreement requires that 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 but not as to the enforceability, revocability or
validity of the Agreement or any portion of the Agreement.
Except as it provides otherwise, this Agreement also applies, without limitation, to disputes with any entity or individual arising out of or related to . . . employment relationship or the termination of that relationship (including post-employment defamation or retaliation) . . . retaliation, discrimination, and harassment . . . s, and all other federal or state legal claims (including without limitation torts) arising out of or relating to Employee's employment or the termination or engagement of employment.”
(Dellums Decl. Ex. 3.)
The Court finds that because the agreement states the Federal Arbitration Act (FAA) governs the agreement, the FAA controls the enforcement of the Agreement. (See Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346 [“It follows that when an agreement provides that its ‘enforcement’ shall be governed by the FAA, the FAA governs a party's motion to compel arbitration.”].)
Plaintiff does not dispute the existence of the Agreement but asserts that he does not recall signing the Agreement, clicking on the “Agreed” button to the Agreement, and asserts that he believes that an electronic signature would be where Plaintiff types or draws his name. (Rosas Decl. ¶ 4.) Plaintiff asserts that had he been made aware of the existence of the Agreement he would not have signed it. (Id. ¶ 6.)
Plaintiff’s Electronic Signature
The Uniform Electronic Transactions Act provides that an electronic signature has the same legal effect as a handwritten signature and the legal effect of an electronic signature may not be denied simply because of its electronic form. (Code Civ. Proc., §§ 1633.1, 1633.7.)
“Civil Code section 1633.9 addresses how a proponent of an electronic signature may authenticate the signature—that is, show the signature is, in fact, the signature of the person the proponent claims it is. The statute states: “(a) An electronic record or 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.” Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 843 [italics original].)
In its moving papers, Defendant includes the Declaration of Liz Dellums, Senior Vice President of Defendant’s human resource department, who attests to the security procedures at the time Plaintiff signed the Agreement. Defendant asserts that each employee, including Plaintiff, was provided with a unique email/username account. (Dellums Decl. ¶ 2.) Each employee created his or her own private password to access Defendant’s email and company system and each employee was notified that they must maintain the confidentiality of the private passwords. (Id. ¶ 3.) Defendant did not have access to or knowledge of any private passwords, including Plaintiffs’. (Id.)
Defendant uses “Learning Management Systems” (“LMS”) for training and maintaining various personnel records. (Dellums Decl. ¶ 6.) To access LMS, employees use their unique company email/username and private password combination. (Id. ¶ 5.) On August 12, 2016, Defendant’s human resource department (aka “Beachbody’s People Department) emailed all employees, including Plaintiff a new “Beachbody Employee Guide.” (Id. ¶¶ 6, 7, Ex. 1.)
The email stated:
“When you joined Beachbody, you
may remember acknowledging the Employee Field Guide to Success and
signing the Arbitration Agreement, which were combined. It’s time again for you
to read and acknowledge the updated versions.”
The email included a link that
states “Please click HERE to review the new Beachbody Employee Guide and
update Dispute Resolution Agreement (formerly known as the Arbitration
Agreement, which are now separate documents.” (Id.)
“After you have reviewed
the documents, you will need to take two steps by August 26, 2016:
1. Electronically sign
the acknowledgment of the Beachbody Employee Guide, and
2. Electronically sign the agreement for the Dispute Resolution Agreement (or submit the Dispute Resolution Agreement Opt Out Form)”
(Dellums Decl. ¶ 9, Ex. 1 [italics original].
Clicking on the link led employees to the “Training material” page which had direct links to Defendant’s (1) Employee Guide August 2016; (2) Employee Guide Acknowledgment; and (3) Dispute Resolution Agreement.” (Dellums Decl. ¶ 12.) Employees could only access the link if they signed in through their unique Beachbody email/username and private password. (Id. ¶ 11.)
Defendants have access to LMS activity reports for each of its employees, including Plaintiff. (Dellums Decl. ¶ 15.) Defendants determined that Plaintiff electronically signed the Agreement via LMS on September 14, 2016. (Id.) In order for Plaintiff to have completed the LMS activity, he would have had to log in with his unique email/username and private password combination, opened each document, and clicked through each page. (Dellums Decl. ¶ 16.) At the end of the arbitration agreement, there is an “Agreed” button with the following immediately above the button:
“By clicking 'Agreed' below, (a) I agree to the above Dispute Resolution Agreement and (b) I agree to use an electronic signature to demonstrate that agreement. I am fully aware that this electronic signature is as legally binding as an ink signature.”
(Dellums Decl. ¶ 16.)
After clicking “Agree”, a prompt appears that states, “Thank you for completing the Dispute Resolution Agreement. Please click the Exit button below to close this page.” (Dellums Decl. ¶ 16.) Defendant asserts that the Transcript Report for Plaintiff’s account shows that he reviewed the Employee Guide and Dispute Resolution Agreement and pushed the “Agreed” button on September 14, 2016. (Dellums Decl. ¶ 17, Ex. 3.) Plaintiff does not assert that he submitted the Opt Out form in order to opt out of arbitration.
“[A] 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 security precautions.”(Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 545; see also Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1062 [find a declaration detailing the defendant’s security precautions regarding transmission and use of the applicant’s unique username and password, as well as the steps the applicant would have to take to place their name on the signature line in the employment agreement and arbitration agreement were sufficient to authenticate the electronic signature.”]
Courts have found that clicking a box indicating assent to a contract’s terms is sufficient to bind the party to a contract. (See Lee v. Ticketmaster L.L.C. (9th Cir. 2020) 817 Fed.Appx. 393, 394; In re Holl (9th Cir. 2019) 925 F.3d 1076, 1084; (Tanis v. Southwest Airlines, Co. (S.D.Cal. Mar. 11, 2019, No. 18-CV-2333-BAS-BGS) 2019 WL 1111240, at pp. *5–7 [finding that a checkbox was a properly authenticated electronic signature when accessed with a unique user name and password]; Klein v. Delbert Services Corp. (N.D.Cal. Apr. 1, 2015, No. 15-cv-432-MEJ) 2015 WL 1503427, at p. *5 [finding that a checkbox was a valid electronic signature].) Plaintiff has not cited any authority holding otherwise.
“‘[O]ne who accepts or signs an instrument, which on its face is
a contract, is deemed to assent to all its terms, and cannot escape liability
on the ground that he [or she] has not read it.”’(Ramos v. Westlake Services
LLC (2015) 242 Cal.App.4th 674, 686, [internal quotes omitted].) The fact
that Plaintiff does not recall signing the agreement is insufficient to rebut
Defendant’s compelling evidence that he did sign the Agreement whether or not
he read the content as he was instructed to do. “[A] person with capacity of
reading and understanding an instrument signs it, he may not, in the absence of
fraud, imposition or excusable neglect, avoid its terms on the ground he failed
to read it before signing it.” (Bauer v. Jackson (1971) 15 Cal.App.3d
358, 370.)
Here, there is no indication
that Plaintiff does not speak English or did not understand the terms of the Agreement.
The Court finds that Plaintiff had the capacity to enter into a contract and
any failure to read or learn the terms of the Agreement is due to Plaintiff’s own
actions and not due to any malfeasance by Defendant.
LMS training that required Plaintiff to take two actions: (1) sign the acknowledgment of the Beachbody Employee Guide, and (2) electronically sign the Arbitration Agreement (or submit the Dispute Resolution Agreement Opt Out Form).
Based on the foregoing, Court finds that Defendant by the preponderance of the evidence has produced sufficient evidence to find that an arbitration agreement exists between the parties that compel Plaintiff to arbitrate his claims. The Court further finds that Plaintiff has failed to present sufficient evidence to rebut Defendant’s evidence.
Arbitrability of
Plaintiff’s Harassment based on Sexual Orientation Claim
On March 03, 2022, President Biden signed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” (Pub. L. No. 117-90, 136 Stat. 26) The Act provides 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 assault dispute or the sexual harassment dispute.” (Id. at § 402(a).) Sexual Harassment Dispute is defined to mean “conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” (Id. at § 401(4).) The Act applies to “any dispute or claim that arises on or after the date of enactment of this Act.” (Id. at § 3.)
In Bostock v. Clayton County, Georgia (2020), the United States Supreme Court found that although “homosexuality and transgender status are distinct concepts from sex”, Title VII prohibits all forms of discrimination because of sex “however they may manifest themselves or whatever other labels might attach to them.” (Bostock v. Clayton County, Georgia (2020) 140 S.Ct. 1731, 1746-1747.) It may be that Plaintiff’s harassment claim based on sexual orientation cannot be compelled to arbitration due to the Act.
Because
the parties have not fully briefed the Act and its possible application here, the
Court continues the hearing to
allow the parties to submit supplemental briefs as to whether the Ending Forced
Arbitration of Sexual Assault and Sexual Harassment Act of 2021 applies to
Plaintiff’s first cause of action for harassment based on sexual orientation.
Conclusion
The Motion to Compel Arbitration is CONTINUED to March 2, 2023. The parties are to submit supplemental briefs as to whether the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 applies to Plaintiff’s first cause of action, harassment based on sexual orientation. The supplemental briefs must be filed by February 24, 2023.
Moving party to give notice.