Zaklit v. Hankey Inv. Co.

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MAYRON ZAKLIT, Plaintiff and Respondent, v. HANKEY INVESTMENT COMPANY, LP, et al., Defendants and Appellants.

B314081

California Court of Appeals, Second District, Third Division

April 4, 2023

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County No 21STCV05216, Maureen Duffy-Lewis, Judge. Reversed with directions.

Molino &Berardino, The Molino Firm, Michelle Cooper, Benjamin John Carter, John C. Holmes and Ed Chung for Defendants and Appellants.

Winer Burritt &Scott, Kelli D. Burritt; Gusdorff Law and Janet Gusdorff for Plaintiff and Respondent.

EGERTON, J.

Hankey Investment Company, LP, Hankey Finance Company, Inc. Westlake Financial Services^[1] (Westlake), Christian Torrez Brian Renfro, and Kelechi Ogbunamiri (collectively, defendants) appeal from the trial court's order denying their petition to compel arbitration of Mayron Zaklit's sexual harassment complaint. We reverse.

FACTS AND PROCEDURAL BACKGROUND

1. The parties

Zaklit alleges Hankey Investment Company, LP, Hankey Finance Company, Inc., Hankey Group, and Westlake (collectively, the corporate defendants) collectively employed her,^[2]beginning in May 2017, as the manager of recruitment and retention and then as the manager of people and culture. The individual defendants, Torrez, Renfro, and Ogbunamiri allegedly were "employed by" the corporate defendants as "officers, directors, managing agents, managers, and/or supervisors."

Hankey Investment Company contractually provides human resources to the Hankey Group companies, including, Hankey Investment Company, LP, Hankey Finance Company, Inc., and Westlake. Westlake is a finance company that "specializes in the acquisition and servicing of prime to subprime automotive retail installment contracts from over 15,000 new and used car dealerships throughout the United States." Its employees deal with consumers and dealers in all 50 states. Hankey Investment Company is a commercial real estate developer and investor that underwrites, produces, and manages commercial real estate. Hankey Finance Company owns "vehicle portfolios used on interstate highways." It has no employees.

2. Zaklit's complaint

On February 9, 2021, Zaklit filed a sexual harassment and retaliation lawsuit against defendants. She alleged she was jointly employed by the corporate defendants and was supervised by the individual defendants. Zaklit alleged that, shortly after her employment began, and continuing through mid-January 2020, she was subjected to a hostile work environment, including by comments about women's appearance, including hers, accompanied by leering; belittling remarks about women's opinions, including hers; being impliedly told by the director of marketing during a meeting that she should shut her mouth; and other behavior.

In October 2019, the corporate defendants held an event for about 50 "company 'leaders'-director-level and up" at a hotel from Thursday through Saturday. Zaklit attended as part of the human resources team. Allegedly, at that event, Torrez approached Zaklit and asked her to have a threesome with another employee; Renfro asked her to go back to his room; and Ogbunamiri, after helping Zaklit carry items from the event to her room for safekeeping, sat down on the bed uninvited with his shoes off and would not leave right away.^[3] Zaklit told the vice president of human resources Tonia Douglas what had happened. She responded that she had seen what happened, but Zaklit looked to be" 'okay.' "

Zaklit alleged she dreaded going to work, her mental and physical health deteriorated, and she took disability leave in January 2020. She alleged she "had no choice but to resign from her employment due to Defendants' failure to provide a safe work environment for her to return to, and failure to protect [her] from being subjected to further harassment." Zaklit resigned on January 18, 2021.

Zaklit's complaint asserts four causes of action under the Fair Employment and Housing Act (Gov. Code, § 12940 et seq.; FEHA) for quid pro quo sexual harassment (against all defendants), hostile work environment based on gender, sex and sexual orientation (against all defendants), retaliation (against the corporate defendants), and failure to take reasonable steps to prevent discrimination, harassment, and retaliation (against the corporate defendants); intentional infliction of emotional distress (against all defendants); violation of the Ralph Act (Civ. Code, § 51.7) for intimidation and implied threat of violence (against Ogbunamiri and the corporate defendants); gender violence (Civ. Code, § 52.4) (against Ogbunamiri); battery (against Torrez and the corporate defendants), and constructive wrongful termination in violation of public policy (against the corporate defendants).

3. Litigation over defendants' petition to compel arbitration

On March 21, 2021, defendants' counsel asked Zaklit's counsel whether she would stipulate to arbitrate the matter before the AAA as provided for in a dispute resolution agreement she had signed.^[4] Counsel agreed a provision in the agreement excluding the right to punitive damages or injunctive relief should be severed from it, and said defendants would ask the court to do so. Zaklit's counsel declined to stipulate. On March 26, 2021, defendants filed a joint petition to compel arbitration.

As part of their petition, defendants provided the trial court with three different arbitration agreements Zaklit had signed. On March 24, 2017, Zaklit submitted a signed employment application to "Westlake Financial Services" that included her agreement to "submit to binding arbitration all disputes and claims arising out of submission of this application," and acknowledged that, if hired, all disputes that "might arise out of [her] employment with Westlake Financial Services . . . will be submitted to binding arbitration."

That same day Zaklit also signed a separate "Applicant's Statement and Agreement" that acknowledged, among other things, Zaklit's and "the [c]ompany['s]" agreement to submit any disputes between them to binding arbitration.

On May 20, 2017, Zaklit electronically signed the same agreement. On that same day, Zaklit and "Alexa Soto - Corporate Recruiter," as the Company representative, electronically signed a two-page "Employer-Employee Dispute Resolution Agreement" (DRA). The DRA states it is a "[m]utual [a]greement to [a]rbitrate" between the "undersigned employee" -Zaklit-and Westlake Services, Inc. d/b/a Westlake Financial Services, "including any and all subsidiary companies including but not limited to Wilshire Consumer Credit, Westlake Flooring, Western Funding, hereinafter ('Company')."

The agreement includes nine numbered and separately-headed paragraphs. We need not describe them all here. The first paragraph states Zaklit

"agrees to submit to binding arbitration before a neutral arbitrator all disputes and claims arising out of submission of my employment application or any and all disputes that may arise out of or already exist related to my employment or relationship with Employer,^[5] whether during or after that employment, including, but not limited to . . . claims for discrimination . . . and claims for violation of any federal, state or other governmental constitution, statute, ordinance or regulation.

I understand that this Agreement to Arbitrate applies to claims that pre-exist or may pre-exist the date of the Agreement."

The middle of the paragraph states, in bold face type, "I understand and acknowledge that I am waiving my right to a jury trial." The paragraph states the Federal Arbitration Act (FAA) will govern the arbitration, as well as section 1280 et seq. of the California Code of Civil Procedure, to the extent it "is not contradictory to or preempted by federal law."

The third paragraph governing "Arbitration Procedure" states the arbitration will be conducted by "an impartial arbitrator experienced in employment law selected from either" JAMS, ARS, or AAA, "at the election of the Company in accordance with the applicable entity's then-current employment arbitration rules (except as otherwise provided in this agreement)." The Company is to pay the Arbitrator's fees and arbitration expenses. The sixth paragraph provides for the arbitrator to decide any "issue or dispute concerning the formation, applicability, interpretation or enforceability" of the agreement.

Defendants' reply brief included evidence showing that, on May 18, 2017, "Onboarding

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" sent Zaklit a "Welcome" email signed by "Human Resources Department[,] Westlake Financial Services," instructing Zaklit to complete "New Hire paperwork online" before coming to orientation. On May 20, 2017, Alexa Soto, an HR employee at the time, electronically sent Zaklit "New Hire" documents to sign electronically through a "docusign portal." Soto's reply email was listed as "asoto6@westlakefinancial.com." The Applicant's Statement and DRA were among those documents. Zaklit electronically signed them and the other new-hire documents on May 20, 2017.

In their petition, defendants argued the DRA delegated to the arbitrator any question relating to the DRA's enforceability. They nonetheless asked the court to sever the clause limiting punitive damages and injunctive relief from the DRA, but asserted that if the court determined the DRA was unenforceable, defendants "aver that the arbitration agreements contained in the Application, and Applicant's Statement are enforceable."^[6]Defendants also argued the nonsignatory defendants could enforce the arbitration agreements because the complaint alleged they were acting as Westlake's agents.

Zaklit opposed the motion, arguing defendants' motion to compel concerned an arbitration agreement betw...