Kader v. S. Cal. Med. Ctr., Inc.

317 Cal.Rptr.3d 682

Omar KADER, Plaintiff and Respondent,

v.SOUTHERN CALIFORNIA MEDICAL CENTER, INC., et al., Defendants and Appellants.

B326830

Court of Appeal, Second District, Division 5.

Filed January 29, 2024

APPEAL from an order of the Superior Court of Los Angeles County, Daniel Murphy, Judge. Affirmed. (Los Angeles County Super. Ct. No. 22STCV17630)

Quinn Emanuel Urquhart & Sullivan, Michael E. Williams, Dylan C. Bonfigli and Marie M. Hayrapetian, Los Angeles, for Defendants and Appellants.

The Law Offices of Vincent Miller, Vincent Miller and Nick Sage, Sherman Oaks, for Plaintiff and Respondent.

MOOR, J.

An employee signed an arbitration agreement with his employer in the regular course of his employment, without disclosing that he was being subjected to sexual harassment and assault. Congress subsequently enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the Act; 9 U.S.C. §§ 401, 402), which invalidates predispute arbitration agreements in certain circumstances. Following the effective date of the Act, the employee sued the employer and other defendants for claims arising from the alleged sexual conduct. The defendants filed a motion to compel arbitration, which the trial court denied based on the Act. On appeal, the defendants contend the Act does not invalidate the arbitration agreement in this case because the alleged sexual conduct constituted a "dispute," which preexisted the parties’ arbitration agreement and the effective date of the Act. We conclude the date that a dispute has arisen for purposes of the Act depends on the unique facts of each case, but a dispute does not arise merely from the fact of injury. For a dispute to arise, a party must first assert a right, claim, or demand. There is no evidence of a disagreement or controversy in this case until after the date of the arbitration agreement and the effective date of the Act, when the employee filed charges with the Department of Fair Employment and Housing (DFEH) in May 2022.¹ Therefore, the predispute arbitration agreement is invalid, and the order denying the motion to compel arbitration is affirmed.

FACTUAL AND PROCEDURAL HISTORY

Southern California Medical Center, Inc., is a community clinic that provides care to low income and medically uninsured patients. The Center’s chief medical officer is physician Mohammad Rasekhi. In July 2016, the Center hired plaintiff and respondent Omar Kader to serve as the chief financial officer. Approximately 18 months later, Kader became the chief operating officer. In May 2018, Kader signed his first arbitration agreement, which is not at issue in this case.

Kader has alleged that in July 2018, Rasekhi said Kader had a pretty face, was a good-looking man, and his slacks were nice and tight. Rasekhi asked if Kader watched porn and talked about guys playing with each other at the gym steam room. He stared at Kader’s buttocks while wetting his lips with his tongue.

On November 18, 2018, Rasekhi allegedly forced Kader to perform oral sex, and on April 17, 2019, forced him to touch Rasekhi’s genitals and perform oral sex. Rasekhi threatened to fire Kader if he revealed the incidents to anyone. Kader kept the incidents to himself out of shame and fear of losing his job.

On June 25, 2019, Kader signed a new arbitration agreement agreeing to arbitrate "employment disputes" with the Center, the human resources provider Modern HR, Inc., or any of their respective employees or officers. The parties agreed that any arbitration would be governed by the Federal Arbitration Act (FAA; 9 U.S.C., §§ 1-16). The agreement provided that if Kader filed a lawsuit containing claims that were subject to arbitration and claims that were not subject to arbitration, the arbitrable claims would be resolved before the nonarbitrable claims.

Eight subsequent incidents of sexual harassment and sexual assault allegedly took place between September 2019 and February 28, 2022. Kader alleged that in July 2021, the Center’s chief executive officer Sheila Busheri began making false statements about Kader to justify retaliating against him.

The Act became effective on March 3, 2022. Kader alleged Rasekhi opened Kader’s blazer on March 16, 2022, and pinched his nipple while wetting his lips with his tongue.

In May 2022, Kader filed a complaint with the DFEH and requested an immediate right-to-sue notice. DFEH closed the complaint and issued a right-to-sue notice on May 27, 2022.

That same day, Kader filed a complaint against the Center, Rasekhi, Busheri, six of the Center's board members, Modern HR, and two additional entities. He alleged causes of action for sexual harassment, discrimination on the basis of race, national origin and/or sex, failure to prevent discrimination and harassment, retaliation, intentional infliction of emotional distress, negligence, sexual battery, and defamation.

It is unclear from the complaint whether Kader complained about Rasekhi’s conduct to anyone other than Rasekhi. Kader alleged he felt that he could not report Rasekhi’s conduct to the Center or its related entities without suffering retaliation. Kader also alleged, however, that he reported Rasekhi’s inappropriate conduct to the Center and a related entity, and he objected to the defendants’ racism and discriminatory hiring practices. In response to Kader’s reports and complaints, the Center and the other entities retaliated against him through a demotion, a pay cut, and retraction of a bonus. In addition, Busheri began making false statements in July 2021 in retaliation against Kader for resisting Rasekhi’s conduct and objecting to discrimination.

The Center, Rasekhi, Busheri, and the six board members (collectively the Center defendants) filed a motion to compel arbitration. They argued that the Act did not apply because: (1) Kader’s claims accrued prior to the effective date of the Act, and (2) the arbitration agreement was signed after the conduct giving rise to sexual harassment or sexual assault took place.

In support of the motion, they submitted Busheri’s declaration stating that Kader never made any complaint to her about Rasekhi’s conduct during his employment. She was not aware of any complaints Kader made to Modern HR about any of the Center’s officials or employees. In fact, during the time of the alleged incidents, Kader sent text messages to Busheri expressing support of Rasekhi.²

Kader opposed the motion brought by the Center defendants. He argued that the Act covered disputes or claims arising or accruing after March 3, 2022, and under the continuing violation doctrine, his causes of action accrued after March 3, 2022. He also argued that the arbitration agreement was contrary to public policy, unconscionable, and there was a possibility of conflicting rulings resulting from litigation with third parties.

Kader submitted his own declaration in support of the opposition. He stated that when he refused to work with Rasekhi, travel alone with him, or be behind closed doors with him, Rasekhi and Busheri began to retaliate against him. He stated that the defendants were aware of the allegations against Rasekhi based on the complaints of several other employees.

The trial court initially granted the motion, finding that each alleged sexual assault was independently actionable, and therefore, all but one claim accrued prior to the Act. The court stayed litigation on claims that arose after March 2, 2022, pending arbitration on the claims that arose before March 2, 2022.

Kader petitioned this appellate court for a writ of mandate, which this court granted. This court ordered the trial court to reconsider the order granting the motion to compel arbitration or show cause why a peremptory writ should not issue. After a hearing on February 10, 2023, the trial court vacated its prior order and denied the motion to compel arbitration. The Center defendants filed a timely notice of appeal from the February 2023 order.

DISCUSSION

The Center defendants contend that the Act does not invalidate the arbitration agreement in this case for two reasons. First, it is not a "predispute" arbitration agreement because the conduct began before the agreement was signed. Second, the Act does not apply because Kader’s claims accrued before the effective date of the Act. We disagree with these contentions.

Standard of Review

[1, 2] "California statutes create a ‘summary proceeding’ for resolving petitions or motions to compel arbitration. [Citation.] ‘The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.’ [Citation.]" (Chambers v. Crown Asset Management LLC (2021) 71 Cal.App.5th 583, 590, 286 Cal.Rptr.3d 535, fn. omitted.)

[3] " ‘There is no uniform standard of review for evaluating an order denying a motion to compel arbitration. [Citation.] If the court’s order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court’s denial rests solely on a decision of law, then a de novo standard of review is employed. [Citations.]’ [Citation.]" (Carlson v. Home Team Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 630, 191 Cal.Rptr.3d 29.)

We review statutory interpretation issues de novo. (State Farm Mut, Auto. Ins. Co. v. Department of Motor Vehicles (1997) 53 Cal.App.4th 1076, 1081, 62 Cal.Rptr.2d 178.) "The objective of statutory interpretation is to ascertain and effectuate legislative intent. To accomplish that objective, courts must look first to the words of the statute, giving effect to their plain meaning. If those...