Liu v. Miniso Depot CA, Inc. ( 2024 )

Filed 10/7/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
YONGTONG LIU, B338090
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 23STCV24321)
v.
MINISO DEPOT CA, INC., et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of Los
Angeles County, Bruce G. Iwasaki, Judge. Affirmed.
Innovative Legal Services, Edward S. Wells and Richard Q.
Liu for Defendants and Appellants.
Akopyan Law Firm and Ani M. Akopyan for Plaintiff and
Respondent.
_________________________
INTRODUCTION
The #MeToo movement highlighted concerns that
compelled arbitration of sexual harassment claims can
perpetuate unacceptable behavior and minimize its consequences
by diverting such claims from public court proceedings into a
private forum. In response, Congress enacted the Ending Forced
Arbitration of Sexual Assault and Sexual Harassment Act of 2021
(EFAA; 9 U.S.C. §§ 401-402). 1 As codified, the EFAA amended
the Federal Arbitration Act (FAA; § 1 et seq.), and was placed
within the FAA’s other provisions. Section 402, added by the
EFAA, states, “Notwithstanding any other provision of [the FAA],
at the election of the person alleging conduct constituting a
sexual harassment 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 harassment
dispute.” (§ 402(a).)
This matter requires that we determine whether the EFAA
exempts from arbitration all causes of action in a complaint that
asserts both sexual harassment and non-sexual harassment
claims, or whether a trial court may still compel arbitration of
the non-sexual harassment claims. Defendants Miniso Depot CA,
Inc., USA Miniso Depot, Inc., and Lin Li (collectively, Miniso)
appeal the trial court’s denial of their motion to compel
arbitration of certain claims asserted against them by former
Miniso employee and plaintiff Yongtong “Jade” Liu. Miniso
concedes that the EFAA exempts Liu’s claims alleging sexual
1 All unspecified statutory references are to title 9 of the
United States Code.
2
harassment from arbitration, but contends that the trial court
erred in failing to compel arbitration of Liu’s other employment-
related claims.
We agree with our colleagues in Division Three of this
appellate district, who recently concluded in Doe v. Second Street
Corp. (Sept. 30, 2024, B330281) ___ Cal.App.5th ___ [2024 WL
4350420] that the plain language of the EFAA exempts a
plaintiff’s entire case from arbitration where the plaintiff asserts
at least one sexual harassment claim subject to the act. Here, at
least one of Liu’s claims is subject to the EFAA, and thus the trial
court did not err in refusing to compel Liu to arbitrate any of her
claims.
FACTUAL AND PROCEDURAL BACKGROUND
A. Liu’s Lawsuit
Liu sued Miniso and unnamed Doe defendants on
October 5, 2023. Liu alleged that Li was the chief executive
officer of the Miniso entities. According to Liu, Miniso owns and
operates retail stores which sell “goods such as toys, collectables,
stationary, cosmetics, and household items.”
Liu alleged she was hired by Miniso in around April 2021
as a human resources administrator, and was paid an hourly
wage. In around January 2022, Miniso changed Liu’s job title
and, although her duties “remained generally the same,” she was
classified as exempt from various wage and hour requirements
imposed by the Labor Code, Industrial Welfare Commission
Wage Orders, and regulations. Liu alleged that Miniso
misclassified her as an exempt employee, and as a result
improperly failed to pay her for all the hours she worked, to pay
her the minimum wage, to pay the required rates for overtime,
3
and to provide her with appropriate rest and meal breaks and
with accurate wage statements.
Liu, who alleges she “identifies as lesbian and dresses in a
unisex non-gender specific style,” further asserted that during
her employment “[she] and others in her presence were subjected
to unwelcome, severe and pervasive sexual harassment, sex
discrimination and race discrimination, sexual orientation/gender
harassment and sexual harassment/gender discrimination.” Liu
alleged the following specific incidents and types of offensive
conduct: Li and others at Miniso commented on Liu’s appearance
during company meetings; Li twice suggested during meetings
that if Miniso’s products looked like Liu then no one would
purchase them; Li remarked that Liu was unattractive because
she was “ ‘too skinny’ ” (italics omitted) and that she needed to
eat more to have more curves; during meetings Li compared Liu’s
body with that of another female employee; Li would compare
other female employees with toys sold by Miniso; male managers
referred to female employees as “ ‘little girls’ ” (italics omitted);
“[i]n [her] presence, [d]efendants would refer to homosexuals as
‘creepy,’ and would comment that ‘a man should do what a man
should do, and a woman should do what a woman should do’ ”
(italics omitted); while discussing a product decorated with a
rainbow, Li looked at Liu and commented, “ ‘who would want to
buy that’ ” (italics omitted); and “[d]efendants . . . mockingly
refer[ed] to [Liu] as ‘Brother Jade’ ” (italics omitted).
Liu also alleged that Miniso asked her, in her position in
human resources, to participate in practices which she considered
to be illegal, including failing to pay female employees “equally or
comparably to male counterparts,” “hir[ing] only young Korean
employees,” and falsifying “immigration-related documents” to
4
facilitate Miniso hiring Chinese individuals who could not legally
work in the United States. Liu alleged she complained about
these practices to Li and others and refused to comply. Liu
alleged that after she refused to participate in various practices
she believed were illegal, she faced increased harassment and
discrimination.
Liu alleged, “As a result of the retaliation and working long
hours, for which she was not paid, and the demand that she
engage in conduct that she believed violated the law, in or around
May 2023, [her] health declined, she began to suffer severe
emotional distress, manifesting itself in migraines, anxiety, and
depression.” She alleged that her working conditions became
“intolerable” and that “[a]ny reasonable person would have felt
compelled to resign instead of continuing to work without pay,
while enduring sexual harassment, sexual orientation/gender
based discrimination and harassment, and being forced to violate
the law.” In June 2023, Liu informed Miniso she was resigning;
she alleges this constituted a constructive termination based on
her sex and sexual orientation/gender identity, and in retaliation
for her whistleblowing.
Based on these allegations, Liu asserted the following
claims: violation of various wage and hour requirements set forth
in the Labor Code and California Code of Regulations, title 8,
section 11040; sexual harassment in violation of the Fair
Employment and Housing Act (FEHA; Gov. Code, § 12900 et
seq.); sex discrimination in violation of the FEHA; sexual
orientation/gender identity harassment in violation of the FEHA;
sexual orientation/gender identity discrimination in violation of
the FEHA; retaliation for complaining about unlawful activities
in violation of Labor Code section 1102.5; retaliation for refusing
5
to participate in unlawful activities in violation of Labor Code
section 1102.5; constructive termination in violation of public
policy; and intentional infliction of emotional distress. Liu
sought compensatory damages, statutory penalties, punitive
damages, injunctive relief, and attorney’s fees.
B. Miniso’s Motion to Compel Arbitration
On January 31, 2024, Miniso filed a motion to compel
arbitration of all of Liu’s claims under the FAA. Miniso relied on
an arbitration agreement it claimed Liu had signed when she
accepted Miniso’s job offer. The agreement stated, in relevant
part: “To ensure the rapid and economical resolution of disputes
that may arise in connection with your employment with Miniso,
you and Miniso agree that any and all disputes, claims, or causes
of action, in law or equity, arising from or relating to your
employment, or the termination of your employment, will be
resolved, to the fullest extent permitted by law by final, binding,
and confidential arbitration in your county and state of
employment conducted by the Judicial Arbitration and Mediation
Services/Endispute, Inc. (‘JAMS’), or its successors, under the
then current rules of JAMS for employment disputes.” (Bold and
italics omitted.) The agreement also provided that “any dispute
relating to the interpretation, applicability, validity, or
enforceability of [the agreement] . . . shall be governed by the
[FAA].”
Miniso argued that, under the terms of the arbitration
agreement, “Liu must arbitrate her entire [c]omplaint, because it
consists solely of Labor Code counts, FEHA claims, and
employment and other torts, all of which ‘arise in connection with
[Liu’s] employment with Miniso.’ ” Miniso contended that the
EFAA did not apply because Liu’s allegations of sexual
6
harassment failed to state a claim for harassment and, thus, her
complaint effectively had no harassment claim. In particular,
Miniso argued that Liu’s complaint concerned “mere annoying,
offensive, and stray remarks,” which could not state a viable
harassment claim under the FEHA. (See Lyle v. Warner Brothers
Television Productions (2006) 38 Cal.4th 264, 283 [“Although
annoying or ‘merely offensive’ comments in the workplace are not
actionable, conduct that is severe or pervasive enough to create
an objectively hostile or abusive work environment is unlawful”].)
C. Liu’s Opposition
Liu opposed Miniso’s motion to compel arbitration. As
relevant to this appeal, Liu contended that the EFAA permitted
her to opt out of the arbitration agreement. She argued there
was no requirement she had to state sufficient facts to support a
cognizable harassment claim in order to invoke the EFAA. She
further argued that she had stated a viable sexual harassment
claim under the FEHA.
D. Miniso’s Reply
Miniso filed a reply brief in which it reiterated its
argument that Liu had failed to allege sufficient facts to support
a sexual harassment claim under the FEHA. Miniso further
argued, in the alternative, that even if the EFAA applied to Liu’s
sexual harassment claims, the act did not apply to Liu’s other
claims and, as a result, the trial court was required to sever the
other claims and compel them to be arbitrated.
E. The Trial Court’s Ruling
On March 19, 2024, the trial court denied Miniso’s motion
to compel arbitration. Addressing Miniso’s argument that the
EFAA did not apply because Liu had not alleged sufficient facts
7
to support a sexual harassment claim under the FEHA, the court
stated, “there is no controlling authority that employs this
sufficiency of the pleadings standard. Further, and more
importantly, the [c]omplaint adequately states a claim for sexual
harassment.”
The court also rejected Miniso’s argument that, even if the
EFAA applied to Liu’s sexual harassment claim, the act did not
exempt Liu’s other claims from arbitration. The court relied on
two federal district court opinions, Johnson v. Everyrealm, Inc.
(S.D.N.Y. 2023) 657 F.Supp.3d 535, 561 and Turner v. Tesla, Inc.
(N.D.Cal. 2023) 686 F.Supp.3d 917, 925, which both held that
when a complaint includes a claim for sexual harassment to
which the EFAA applies the arbitration agreement is
unenforceable “with respect to [the plaintiff’s] entire case.”
(Ibid.)
DISCUSSION
Miniso challenges the denial of its motion to compel
arbitration. (See Code Civ. Proc., § 1294, subd. (a) [“[a]n order
dismissing or denying a petition to compel arbitration” is
appealable].) Abandoning some of the arguments it made before
the trial court, Miniso now concedes that the EFAA applies to
Liu’s claims for sexual harassment and for sexual
orientation/gender identity harassment. In accord with this
concession, we assume Liu alleged facts stating a legally
cognizable sexual harassment claim. 2
2 Federal district court decisions have interpreted the
EFAA to apply only where the plaintiff’s sexual harassment
related claims are capable of surviving a challenge at the
8
Miniso’s sole appellate contention is that the trial court
erred in concluding the parties’ arbitration agreement was
unenforceable as to all of Liu’s claims, and not just as to the two
harassment claims. In other words, Miniso contends the trial
court should have compelled Liu to arbitrate all of her claims
except for the two harassment claims. We disagree. Under the
EFAA, when a plaintiff’s lawsuit contains at least one claim that
fits within the scope of the act, the arbitration agreement is
unenforceable as to all claims asserted in the lawsuit. 3
pleading stage, because without such a procedural safeguard a
plaintiff could avoid complying with an otherwise valid
arbitration agreement by simply adding a baseless sexual
harassment claim. (See, e.g., Yost v. Everyrealm, Inc. (S.D.N.Y.
2023) 657 F.Supp.3d 563, 586 [allowing the EFAA to apply to
sexual harassment related claims that do not satisfy the federal
“plausibility” standard for a motion to dismiss “could destabilize
the FAA’s statutory scheme” because “[i]t would enable a plaintiff
to evade a binding arbitration agreement—as to wholly distinct
claims, and for the life of a litigation—by the expedient of adding
facially unsustainable and quickly dismissed claims of sexual
harassment”].) This appeal does not require us to opine on what
threshold, if any, a plaintiff’s sexual harassment related claims
must meet before the EFAA becomes applicable because there is
no dispute that Liu has adequately pleaded at least two sexual
harassment related claims.
3 Liu contends that Miniso has forfeited its argument that
the court should have compelled arbitration of Liu’s non-sexual
harassment claims because it did not assert the argument until
its reply brief in the trial court. We decline to find a forfeiture
because, as Miniso points out, the trial court addressed that
argument on the merits. Liu relies on JRS Products, Inc. v.
Matsushita Electric Corp. of America (2004) 115 Cal.App.4th 168,
9
A. Standard of Review
In deciding a motion to compel arbitration, “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.” (Engalla v.
Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.)
Where, as is the case here, “ ‘the trial court’s denial of a
petition to arbitrate presents a pure question of law, we review
the order de novo.’ ” (Mendez v. Mid-Wilshire Health Care Center
(2013) 220 Cal.App.4th 534, 541; see Kader v. Southern
California Medical Center, Inc. (2024) 99 Cal.App.5th 214, 221
[“We review statutory interpretation issues de novo”].) In
addition, “[i]t is the ruling, and not the reason for the ruling, that
is reviewed on appeal.” (Muller v. Fresno Community Hospital &
Medical Center (2009) 172 Cal.App.4th 887, 906-907.)
but the court there recognized that “a Court of Appeal is at
liberty to reject a waiver claim and consider the issue on the
merits” (id. at p. 179), and that a waiver will likely be found on
appeal when “the opposing party did not have an opportunity to
argue [the issue] and the trial court did not have an opportunity
to consider [it]” (id. at p. 178). The trial court here had an
opportunity to consider the issue and did in fact address it. In
addition, although Liu was unable to address the issue in her
trial court opposition brief, our review is de novo and she has had
a full opportunity to present her arguments on appeal. Mendoza
v. Trans Valley Transport (2022) 75 Cal.App.5th 748, cited by
Liu, is distinguishable because there the respondent lost the
opportunity to present evidence in the trial court (id. at pp. 769-
770), which is not a concern here with regard to the legal issue
presented by Miniso.
10
B. The FAA and EFAA
The parties’ arbitration agreement provides that
“interpretation, applicability, validity, or enforceability” of the
agreement is governed by the FAA. As neither party disputes
that the FAA governs, we apply the FAA to their dispute.
(Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th
1110, 1115 [FAA procedural rules govern where the parties have
expressly agreed that the FAA applies]; see Cronus Investments,
Inc. v. Concierge Services (2005) 35 Cal.4th 376, 394 [“parties to
an arbitration agreement [may] expressly designate that any
arbitration proceeding should move forward under the FAA’s
procedural provisions rather than under state procedural law”].)
As relevant here, the FAA provides, “A written provision in
. . . a contract evidencing a transaction involving commerce to
settle by arbitration a controversy thereafter arising out of such
contract or transaction, or the refusal to perform the whole or any
part thereof, . . . shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation
of any contract or as otherwise provided in chapter 4.” (§ 2.)
Chapter 4 of the FAA, referenced in section 2, was added by
the EFAA, which became effective on March 3, 2022. It consists
of sections 401 and 402. Section 402 provides, in relevant part,
“Notwithstanding any other provision of this title, at the election
of the person alleging conduct constituting a sexual harassment
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 harassment dispute.” (§ 402(a).) As relevant
here, section 401 defines “ ‘predispute arbitration agreement’ ” as
“any agreement to arbitrate a dispute that had not yet arisen at
11
the time of the making of the agreement.” (§ 401(1).) In addition,
it defines “ ‘sexual harassment dispute’ ” as “a dispute relating to
conduct that is alleged to constitute sexual harassment under
applicable Federal, Tribal, or State law.” (§ 401(4).) 4
Under section 402, the applicability of the EFAA is
governed by federal law and is to be decided by a court, as
opposed to an arbitrator. (§ 402(b).)
C. The EFAA Makes the Parties’ Arbitration Agreement
Unenforceable as to Liu’s Entire Case
In interpreting both state and federal statutes, “our
primary task is to determine the lawmaker’s intent.” (Wells
Fargo Bank v. Superior Court (1991) 53 Cal.3d 1082, 1095.) “We
consider first the words of a statute, as the most reliable
indicator of legislative intent. [Citation.] ‘ “ ‘Words must be
construed in context, and statutes must be harmonized, both
internally and with each other, to the extent possible.’ [Citation.]
Interpretations that lead to absurd results or render words
surplusage are to be avoided. [Citation.]” [Citation.]’ [Citation.]”
(Tuolumne Jobs & Small Business Alliance v. Superior Court
(2014) 59 Cal.4th 1029, 1037.) “[W]hen ‘the statute’s language is
4 Section 402(a) contains parallel provisions regarding a
“sexual assault dispute” which section 401(3) defines as “a
dispute involving a nonconsensual sexual act or sexual contact,
as such terms are defined in section 2246 of title 18 [of the United
States Code] or similar applicable Tribal or State law, including
when the victim lacks capacity to consent.” As Liu does not
contend that her case related to any “ ‘sexual assault dispute’ ”
within the meaning of section 401(3), we confine our discussion to
those provisions of the EFAA relating to a “ ‘sexual harassment
dispute’ ” under section 401(4).
12
plain, “the sole function of the courts” ’—at least where the
disposition required by the text is not absurd—‘ “is to enforce it
according to its terms.” ’ [Citation.]” (Hartford Underwriters Ins.
Co. v. Union Planters Bank, N. A. (2000) 530 U.S. 1, 6 [120 S.Ct.
1942, 147 L.Ed.2d 1].) However, “[t]o the extent statutory
language is ambiguous or open to more than one reasonable
interpretation, we may turn to legislative history for guidance.”
(Tuolumne Jobs & Small Business Alliance, at p. 1040.)
Miniso contends that the EFAA’s language is clear and
gives a plaintiff such as Liu the option to invalidate an
arbitration agreement only with respect to claims alleging sexual
harassment as defined in section 401(4). According to Miniso,
where an action contains one or more sexual harassment claims
and one or more other claims, the court must compel arbitration
of any non-sexual harassment claim(s). We agree with Miniso
that the language of the EFAA is clear but come to the opposite
conclusion as to the meaning of the statutory language.
As relevant here, section 402(a) provides, “at the election of
the person alleging conduct constituting a sexual harassment
dispute,” here Liu, “no predispute arbitration agreement . . . shall
be valid or enforceable with respect to a case which is filed under
. . . [s]tate law and relates to . . . the sexual harassment dispute.”
(§ 402(a), italics added.) For purposes of resolving this appeal,
the key word in section 402(a) is “case.” The common meaning of
the word, in the context of litigation, is an action or suit. (See
Merriam-Webster, https://www.merriam-
webster.com/dictionary/case [defining “case” in part as “a suit or
action in law or equity”], as of Oct. 3, 2024; Black’s Law
Dictionary (12th ed. 2024) [defining “case” in part as “[a] civil or
criminal proceeding, action, suit, or controversy at law or in
13
equity”].) This accords with federal practice, with which
Congress is familiar, in which a plaintiff commences a case, that
is to say a civil action or proceeding, by filing a complaint. (See
Fed. Rules Civ. Proc., rules 1, 3.) Under the EFAA, if a plaintiff’s
action “relates to . . . the sexual harassment dispute,” then, at the
plaintiff’s election, the arbitration agreement is not valid or
enforceable “with respect to” the entire case/action. (§ 402(a).)
Miniso’s interpretation is flawed because one cannot
reasonably interpret section 402(a) as invalidating an arbitration
agreement only with respect to certain claims within a case. The
term Congress chose—“case”—is different from the term “claim.”
(See Black’s Law Dictionary, supra, [defining “claim” in part as,
“[a] demand for money, property, or a legal remedy to which one
asserts a right”; further defining “claim” as, “[a]n interest or
remedy recognized at law; the means by which a person can
obtain a privilege, possession, or enjoyment of a right or thing”];
see also Fed. Rules Civ. Proc., rules 8 [describing what a plaintiff
must plead as to individual claims for relief within a complaint],
12(b)(6) [procedure for a defendant to move to dismiss a claim
upon which relief cannot be granted], 18 [permitting joinder of
multiple claims against an opposing party].) If Congress had
intended the result Miniso seeks, it would have used the term
“claim” instead of “case” (saying something like no arbitration
agreement “shall be valid or enforceable with respect to a case
claim which is filed under Federal, Tribal, or State law and
relates to the . . . sexual harassment dispute”), or alternatively
stated that the arbitration provision would be unenforceable
“only to that portion of the case related to the sexual harassment
dispute.” Congress did not use such language, and we “lack the
power to rewrite a statute to make it conform to a ‘ “ ‘ “presumed
14
intention” ’ ” ’ which is not expressed in the statute itself.
[Citation.]” (Chinese Theatres, LLC v. County of Los Angeles
(2020) 59 Cal.App.5th 484, 492.)
Thus, under the EFAA, Liu may not be compelled to
arbitrate any of her claims because the “case” she filed under
state law (her superior court lawsuit) “relates to . . . the sexual
harassment dispute” in that her complaint contains claims
premised on conduct that is alleged to constitute sexual
harassment under state law.
Recognizing the difficulties posed by the statute’s use of the
word “case,” Miniso instead points to the definition of “ ‘sexual
harassment dispute’ ” set forth in section 401(4). Miniso
contends that only sexual harassment claims fit within the
definition of “ ‘sexual harassment dispute,’ ” and that the EFAA
thus can only apply to sexual harassment claims. This approach
ignores other operative provisions of the EFAA. Under the
language of section 402(a), a plaintiff who “alleg[es] conduct
constituting a sexual harassment dispute” can elect to render an
arbitration agreement invalid or unenforceable “with respect to”
the plaintiff’s “case,” and not just the “sexual harassment
dispute.”5
5 Miniso’s interpretation is also flawed to the extent it
equates a “ ‘sexual harassment dispute’ ” as defined in section
401(4) with a sexual harassment claim. Under section 401(4),
“ ‘sexual harassment dispute’ means a dispute relating to conduct
that is alleged to constitute sexual harassment under applicable
Federal, Tribal, or State law.” This is broader than merely
claims alleging sexual harassment. For example, cases have
recognized that a claim alleging retaliation for complaining about
15
Miniso similarly argues that the EFAA applies only to
“disputes” and “claims” because section 3 of the act provides the
EFAA “shall apply with respect to any dispute or claim that
arises or accrues on or after [March 3, 2022].” (Pub. L. No. 117-
90, § 3, 136 Stat. 26, 28 (Mar. 3, 2022).) 6 Section 3 governs the
EFAA’s temporal effectiveness, and does not dictate what claims
fall within the definition of “ ‘sexual harassment dispute’ ”
(§ 401(4)), much less the effect under section 402(a) when a
plaintiff’s case relates to a “sexual harassment dispute.”
Our interpretation of section 402(a)’s plain language does
not yield an absurd result. (Hartford Underwriters Ins. Co. v.
Union Planters Bank, N. A., supra, 530 U.S. at p. 6; Tuolumne
Jobs & Small Business Alliance v. Superior Court, supra, 59
Cal.4th at p. 1037.) Allowing a plaintiff “alleging conduct
constituting a sexual harassment dispute” (§ 402(a)) to opt out of
arbitration for their entire case avoids the potential for
inefficiency in having separate proceedings in court and an
arbitration forum, and the related additional burden placed on
the parties of having to litigate claims in both a court proceeding
and an arbitration. In addition, having a clear-cut rule that can
be easily applied allows courts to avoid making the sometimes-
difficult determination, particularly at the pleading stage,
whether a given claim sufficiently overlaps with allegations of
sexual harassment.
sexual harassment is a “ ‘sexual harassment dispute.’ ” (See, e.g.,
Johnson v. Everyrealm, Inc., supra, 657 F.Supp.3d at p. 559.)
6 Section 3 of the EFAA was not codified in the United
States Code.
16
Our interpretation of the EFAA, and specifically section
402(a), accords with the only appellate decision published to date
on this issue, Doe v. Second Street Corp., where the court held,
“By its plain language . . . the [EFAA] applies to the entire case,
not merely to the sexual assault or sexual harassment claims
alleged as a part of the case.” (Doe v. Second Street Corp., supra,___ Cal.App.5th at p. ___ [2024 WL 4350420 at p. *13].) The Doe
court adopted the “well-reasoned analysis” undertaken by the
federal district court in Johnson v. Everyrealm, Inc., supra, 657
F.Supp.3d 535. (Doe v. Second Street Corp., at p. ___ [2024 WL
4350420 at p. *13].) In Johnson, the court concluded, based on
common dictionary definitions, the word “ ‘[c]ase’ . . . captures the
legal proceeding as an undivided whole,” and held, “[w]ith th[is]
ordinary meaning of ‘case’ in mind, the text of [section] 402(a)
makes clear that its invalidation of an arbitration agreement
extends to the entirety of the case relating to the sexual
harassment dispute, not merely the discrete claims in that case
that themselves either allege such harassment or relate to a
sexual harassment dispute . . . .” (Johnson v. Everyrealm, Inc., at
p. 559.) The two other published federal district court decisions
on this issue have followed Johnson. (See Turner v. Tesla, Inc.,
supra, 686 F.Supp.3d at pp. 925, 927 [finding Johnson v.
Everyrealm to be persuasive in holding the EFAA permitted the
plaintiff to invalidate her arbitration agreement with her former
employer as to all claims asserted in her lawsuit, including a
claim under Lab. Code, § 6310 for retaliation for reporting a
workplace injury]; Delo v. Paul Taylor Dance Foundation, Inc.
17
(S.D.N.Y. 2023) 685 F.Supp.3d 173, 180-181 [finding Johnson v.
Everyrealm persuasive and following it].) 7
One federal magistrate judge has published a contrary
decision. In Mera v. SA Hospitality Group, Inc. (S.D.N.Y. 2023)
675 F.Supp.3d 442, the court ruled that under the EFAA the
parties’ arbitration agreement was unenforceable with respect to
the plaintiff’s hostile work environment claims, but not with
respect to the plaintiff’s wage and hour claims, which were
“unrelated” to the hostile work environment claims and “[we]re
pled as to a broad group of individuals in addition to [the
p]laintiff.” (Id. at p. 447.) The court held, “under the EFAA, an
arbitration agreement executed by an individual alleging conduct
constituting a sexual harassment dispute is unenforceable only to
the extent that the case filed by such individual ‘relates to’ the
sexual harassment dispute,” and reasoned, “[t]o hold otherwise
would permit a plaintiff to elude a binding arbitration agreement
with respect to wholly unrelated claims affecting a broad group of
individuals having nothing to do with the particular sexual
harassment affecting the plaintiff alone.” (Ibid.) The court also
concluded that, under KPMG LLP v. Cocchi (2011) 565 U.S. 18,
22 [132 S.Ct. 23, 181 L.Ed.2d 323], the wage and hour claims had
to be arbitrated because they “d[id] not relate in any way to the
sexual harassment dispute.” (Mera v. SA Hospitality Group, Inc.,
at p. 448.)
7 Aside from United States Supreme Court opinions,
federal cases are not binding on us, although they can have
persuasive value. (Metalclad Corp. v. Ventana Environmental
Organizational Partnership (2003) 109 Cal.App.4th 1705, 1714-
1715.)
18
To the extent Mera held that, under the EFAA, only those
claims in a plaintiff’s case that related to the plaintiff’s “sexual
harassment dispute” were exempt from arbitration, we find the
decision unpersuasive based on the plain language of section
402(a). In interpreting section 402(a) to invalidate an arbitration
agreement “only to the extent that the case . . . ‘relates to’ the
sexual harassment dispute” (Mera v. SA Hospitality Group, LLC,
supra, 675 F.Supp.3d at p. 447), the Mera court in effect added
“to the extent” to the statutory language, which contravenes the
rules of statutory construction. (See Chinese Theatres, LLC v.
County of Los Angeles, supra, 59 Cal.App.5th at p. 492.)
Furthermore, as is discussed below, we conclude that the rule
announced in KPMG LLP v. Cocchi does not alter or override the
plain language of the EFAA. 8
Given our resolution of this appeal based on the plain
language of the EFAA, we have no grounds to consider the
legislative history of the act. (N.L.R.B. v. SW General, Inc. (2017)
580 U.S. 288, 305 [137 S.Ct. 929, 197 L.Ed.263] [there is no need
to consider legislative history where a statute’s “text is clear”];
Tuolumne Jobs & Small Business Alliance v. Superior Court,
supra, 59 Cal.4th at p. 1040 [courts will consider legislative
8 The Mera case is also factually distinguishable to the
extent the plaintiff there sought to assert claims on behalf of a
class or otherwise sought relief on behalf of others. In this case
Liu asserts only claims on her own behalf. As we are not
presented with the question what impact the EFAA has on claims
asserted on behalf of a class or other representative claims, we
express no opinion on that issue.
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history “[t]o the extent statutory language is ambiguous or open
to more than one reasonable interpretation”].) 9
D. The United States Supreme Court Opinions in Dean
Witter Reynolds Inc. v. Byrd and KPMG LLP v. Cocchi
Do Not Compel a Different Result
In arguing the claims in Liu’s complaint should be split
between arbitration and court, Miniso relies on two United States
Supreme Court cases, Dean Witter Reynolds Inc. v. Byrd (1985)
470 U.S. 213 [109 S.Ct. 1238, 84 L.Ed.2d 158) and KPMG LLP v.
Cocchi, supra, 565 U.S. 18. Those cases stand for the proposition
that under the FAA “if a dispute presents multiple claims, some
arbitrable and some not, the former must be sent to arbitration
even if this will lead to piecemeal litigation.” (KPMG LLP v.
Cocchi, at p. 19, citing Dean Witter Reynolds Inc. v. Byrd, at
p. 217.) However, this proposition is inapplicable here because,
under the plain language of section 402(a), when a plaintiff
“alleg[es] conduct constituting a sexual harassment dispute” then
the plaintiff can opt their entire “case” out of arbitration. In
9 Miniso points out that Liu’s brief erroneously cited
legislative history for the federal Speak Out Act (see 168 Cong.
Rec. H8518 (Nov. 16, 2022)), legislation which is separate from
the EFAA and governs the enforceability of certain nondisclosure
and non-disparagement agreements. Liu later filed a notice of
errata acknowledging her brief quoted and relied upon
statements by legislators from the debate on the Speak Out Act,
and indicating the mistake was unintentional. We nevertheless
find it troubling that Liu’s brief not only attributed legislators’
comments on the Speak Out Act to the EFAA, but on one occasion
used brackets to replace what would have been a clear reference
to the Speak Out Act so that it read as an express reference to
“[t]he EFAA.”
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other words, when the EFAA applies there are no arbitrable
claims left.
Notably, both Dean Witter and KPMG relied upon the
FAA’s purpose to enforce the contractual rights and expectations
of parties to an arbitration agreement, as expressed in section 2,
which at the time provided that such an agreement “ ‘ “shall be
valid, irrevocable, and enforceable, save upon such grounds as
exist at law or in equity for the revocation of any contract.” ’ ”
(KPMG LLP v. Cocchi, supra, 565 U.S. at pp. 21-22; Dean Witter
Reynolds Inc. v. Byrd, supra, 470 U.S. at p. 218.) However, the
EFAA amended this section to state expressly that the EFAA,
i.e., chapter 4 of the FAA, provides its own rule; thus, section 2
now states that arbitration agreements “shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract or as otherwise
provided in chapter 4.” (Italics added.)
Lastly, we note that Miniso mischaracterizes the trial
court’s ruling as based on the so-called “ ‘doctrine of
intertwining,’ ” which the Supreme Court rejected in Dean Witter.
(Dean Witter Reynolds Inc. v. Byrd, supra, 470 U.S. at pp. 216-
217, 218, fn. omitted [rejecting rule that, “When arbitrable and
nonarbitrable claims arise out of the same transaction, and are
sufficiently intertwined factually and legally, the district court
. . . may in its discretion deny arbitration as to the arbitrable
claims and try all the claims together in federal court”].) The
trial court did not employ any type of “intertwining” analysis in
refusing to compel arbitration of any of Liu’s claims, and instead
based its ruling on its interpretation of the EFAA, an
interpretation we also adopt.
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DISPOSITION
We affirm the trial court’s order denying Miniso’s motion to
compel arbitration. Liu is awarded her costs on appeal.
CERTIFIED FOR PUBLICATION
WEINGART, J.
We concur:
ROTHSCHILD, P. J.
KLINE, J. *
* Retired Presiding Justice of the Court of Appeal, First
Appellate District, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
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