Saheli v. White Memorial Medical Center, 031418 CAAPP2, B283217

Docket Nº:B283217
Opinion Judge:BIGELOW, P.J.
Party Name:GEZEL SAHELI, Plaintiff and Respondent, v. WHITE MEMORIAL MEDICAL CENTER et al., Defendants and Appellants.
Attorney:Seyfarth Shaw LLP, Jeffrey A. Berman, Joan E. Smiles, Dana Peterson, and Kiran A. Seldon for Defendants and Appellants. Fred J. Hiestand, as Amicus Curiae on behalf of Defendants and Appellants. Fenton Law Group, LLP, Nicholas D. Jurkowitz and Alexandra de Rivera for Plaintiff and Respondent.
Judge Panel:I concur: HALL, J. RUBIN, J. - Concurring:
Case Date:March 14, 2018
Court:California Court of Appeals
 
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GEZEL SAHELI, Plaintiff and Respondent,

v.

WHITE MEMORIAL MEDICAL CENTER et al., Defendants and Appellants.

B283217

California Court of Appeals, Second District, Eighth Division

March 14, 2018

         APPEAL from an order of the Superior Court of Los Angeles County No. BC651265. Randolph M. Hammock, Judge. Reversed.

          Seyfarth Shaw LLP, Jeffrey A. Berman, Joan E. Smiles, Dana Peterson, and Kiran A. Seldon for Defendants and Appellants.

          Fred J. Hiestand, as Amicus Curiae on behalf of Defendants and Appellants.

          Fenton Law Group, LLP, Nicholas D. Jurkowitz and Alexandra de Rivera for Plaintiff and Respondent.

          BIGELOW, P.J.

         White Memorial Medical Center (White Memorial) and Juan Barrio, M.D. (together, Defendants) challenge the denial in part of their petition to compel arbitration of claims brought against them by Gezel Saheli, M.D. Although the trial court ordered Saheli to arbitrate the majority of her claims, it refused to compel arbitration of her claims brought pursuant to Civil Code sections 51.7 (Ralph Act) and 52.1 (Bane Act).1 The court reasoned that the parties' arbitration agreement failed to comply with special requirements for agreements to arbitrate such claims. Specifically, sections 51.7 and 52.1 prohibit the enforcement of agreements to arbitrate Ralph Act and Bane Act claims that are made as a condition of certain contracts or of providing or receiving goods or services. They also mandate that the party seeking to enforce an agreement to arbitrate such claims prove the other party knowingly and voluntarily agreed to arbitration. Defendants contend (1) the trial court erred in its interpretation of the parties' arbitration agreement and (2) the Ralph Act's and Bane Act's special requirements for arbitration agreements are preempted by the Federal Arbitration Act (FAA). We agree and reverse the trial court's order denying Defendants' petition to compel arbitration of Saheli's Ralph Act and Bane Act claims.

         FACTUAL AND PROCEDURAL BACKGROUND

         Complaint

         Saheli filed her initial complaint against Defendants on February 21, 2017. In the operative First Amended Complaint, Saheli alleges she is a native of Iran and completed medical training at Tehran University of Medical Sciences. After immigrating to the United States, she enrolled in a medical residency program at White Memorial. In July 2016, Saheli discovered and reported to White Memorial violations of the Health Insurance Portability and Accountability Act (HIPAA) by physicians who were sending confidential protected health information by unsecured and unauthorized means. Over the next few months, she also reported unsafe patient care and conditions. In September 2016, Saheli reported the violations to the Accreditation Council for Graduate Medical Education.

         Saheli alleges that, in response to such reports, Barrio commenced a “campaign of retaliation, harassment, and intimidation” against her, which included yelling at her and threatening to terminate her. According to Saheli, a substantial motivating factor for the yelling was the fact that she is female. In addition, Saheli alleges Barrio made several slurs concerning her Iranian nationality as well as sexual remarks about her and another resident. On March 2, 2017, Saheli was placed on a paid leave of absence pending termination.

         Based on these allegations, Saheli asserts nine causes of action against Defendants: (1) retaliation in violation of Health and Safety Code section 1278.5; (2) violation of the Ralph Act (§ 51.7); (3) violation of the Bane Act (§ 52.1); (4) sexual harassment (§ 51.9); (5) retaliatory wrongful termination (Lab. Code, § 1102.5); (6) wrongful termination in violation of fundamental public policy; (7) gender discrimination and harassment under the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.); (8) national origin discrimination and harassment under the FEHA; and (9) retaliation under the FEHA.

         Petition to Compel Arbitration

         On April 3, 2017, Defendants filed a petition to compel Saheli to arbitrate all of her claims, relying on an arbitration agreement found in an employment/training agreement and employee handbook (Arbitration Agreement).[2] The Arbitration Agreement provides that it “shall be governed by the Federal Arbitration Act and the Arbitration Act of the state in which the Organization is located.” It further provides that “[a]rbitration pursuant to this [Arbitration Agreement] shall be the exclusive means to address any arbitrable dispute, and the parties mutually waive their right to a trial before a judge or jury in federal or state court in favor of arbitration under this [Arbitration Agreement]. Except as stated herein, the rights of the parties under this [Arbitration Agreement] shall be the same as those available to them in a court of competent jurisdiction. The decision of the arbitrator shall be final and binding on all parties.”

         “Arbitrable claims” under the Arbitration Agreement are defined as “those claims... that arise out of, or are related to, (i) a claim of employment discrimination...; (ii) a claim of wrongful or unlawful termination of employment, including claims of constructive discharge; (iii) a claim for wages or other compensation; (iv) a tort claim or any other claim in which punitive damages or emotional distress damages could be awarded that arose out of, or is related to, the employment relationship; (v) a claim that is related in any manner to the claims described in (i) through (iv) of this paragraph, whether based on a statu[t]e, public policy, or otherwise.” However, per the Arbitration Agreement's “carve-out” provision, “[c]laims for unemployment compensation, claims under the National Labor Relations Act, claims under PAGA [Private Attorney General Act], claims for workers' compensation benefits, and any claim that is non-arbitrable under applicable state or federal law are not arbitrable under this [Arbitration Agreement].”

         Saheli opposed Defendants' petition, arguing the Arbitration Agreement was unenforceable with respect to her Ralph Act and Bane Act claims because it failed to comply with certain requirements for arbitration agreements mandated by those acts. Defendants countered that such requirements are preempted by the FAA.

         The trial court granted the petition in part and compelled Saheli to arbitrate all her claims except those under the Ralph Act and Bane Act. The court found that, per the terms of the Arbitration Agreement, the parties agreed not to arbitrate claims that are not arbitrable under California law. It further determined that, pursuant to sections 51.7 and 52.1, the waiver of any forum or procedure under the Ralph Act and Bane Act is unenforceable unless expressly not made as a condition of entering into a contract for services. Because Defendants failed to show the parties expressly agreed the Arbitration Agreement was not a condition of entering into a contract for services, the court concluded the agreement is unenforceable with respect to the Ralph Act and Bane Act claims. The trial court declined to consider whether these requirements are preempted by the FAA. Although not asserted as a defense by Saheli, the court proceeded to find the Arbitration Agreement is not unconscionable. It then compelled arbitration of Saheli's non-Ralph Act and -Bane Act claims.

         Defendants appealed.

         STANDARD OF REVIEW

         Where, as here, the issues presented by a petition to compel arbitration involve only the interpretation of an arbitration agreement, and there are no factual disputes concerning the language of the agreement or its formation, a reviewing court determines the scope and enforceability of the agreement de novo. (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 684; Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1468-1469; Carlson v. Home Team Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 630.) Preemption is a question of law subject to de novo review. (Choate v. Celite Corp. (2013) 215 Cal.App.4th 1460, 1468-1469.)

         DISCUSSION

         I. The Parties Did Not Incorporate Preempted State Law into the Arbitration Agreement

         Defendants assert the trial court erred in implicitly interpreting the Arbitration Agreement as incorporating state law that is preempted by federal law. We agree.

         The FAA3 “requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms.” (Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 478 (Volt).) “Arbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit. Just as they may limit by contract the issues which they will arbitrate, [citation], so too may they specify...

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