Ng vs. Pacific Premier Bank

Agreement to Arbitrate

Here, it is undisputed that Plaintiff executed four arbitration agreements during her employment, including the operative 2023 Mutual Arbitration Agreement (“MAA”) signed on February 8, 2023.

(Declaration of Allison Donaldson (“Donaldson Decl.”) ¶¶ 20-21, Exs. K-L, R.) The MAA covers virtually all disputes arising out of or relating to Plaintiff’s employment, except for specific exclusions such as sexual harassment or assault claims, workers’ compensation or unemployment matters, certain provisional remedies, and other claims expressly made non-arbitrable by law. (Id., Ex. L.) The MAA specifies the claims subject to arbitration and states that it is governed by the Federal Arbitration Act (the “FAA”). (Ibid.)

Defendant represents that on or about December 19, 2025, defense counsel emailed Plaintiff’s counsel requesting that Plaintiff stipulate to arbitration on the grounds that the First Amended Complaint failed to allege a valid sexual harassment claim and remained subject to the parties’ arbitration agreement. (Declaration of Briana Labriola ¶ 8, Ex. D.) However, Plaintiff refused to stipulate to arbitration. (Ibid.)

The FAA

The FAA states that written 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.” (9 U.S.C. § 2.) The United States Supreme Court has described this provision as reflecting both a “liberal federal policy favoring arbitration,” and the “fundamental principle that arbitration is a matter of contract.” (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339 (“Concepcion”).)

The FAA permits agreements to arbitrate to be invalidated by “generally applicable contract defenses, such as fraud, duress, or unconscionability.” (Concepcion, supra, 563 U.S. at p. 339.) When deciding whether a valid arbitration agreement exists, courts generally apply “ordinary state-law principles that govern the formation of contracts.” (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944.) “[T]he party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.” (Green Tree Fin. Corp. v. Randolph (2000) 531 U.S. 79, 91.)

On a motion to compel arbitration under the FAA, the court’s role is limited to deciding: “(1) whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute.” (Brennan v. Opus Bank (9th Cir. 2015) 796 F.3d 1125, 1130.) If these conditions are satisfied, the court is without discretion to deny the motion and must compel arbitration. (9 U.S.C. § 4; Dean Witter Reynolds, Inc. v. Byrd (1985) 470 U.S. 213, 218 [“By its terms, the [FAA] leaves no place for the exercise of discretion by a

district court, but instead mandates that district courts shall direct the parties to proceed to arbitration.”].)

Defendant has demonstrated the existence of a valid arbitration agreement that encompasses all of Plaintiff’s employment-related claims. Plaintiff does not dispute the agreement’s validity or scope but contends her claims fall outside its reach under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”).

The EFAA

The FAA was amended in 2022 to include what is known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. (See, Doe v. Second Street Corp. (2024) 105 Cal.App.5th 552, 564-565.) One of the goals of the EFAA is to protect the victims of sexual assault and/or sexual harassment from having to arbitrate their claims in what could be considered a less fair forum than the courts with a jury of their peers. (Id., at 565-566.)

The EFAA provides: “Notwithstanding any other provision of this title, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute jointaction 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 assault dispute or the sexual harassment dispute.” (9 U.S.C.A. § 402(a).)

The EFAA defines “sexual harassment dispute” to mean “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” (9 U.S.C., § 401(4).) California law protects against harassment because of sex, including sexual harassment, gender harassment, and harassment based on pregnancy. (Gov. Code, § 12940(j)(4)(C).)

The elements of a hostile environment sexual harassment claim are: (i) plaintiff belongs to a protected group; (ii) plaintiff was subject to unwelcome sexual harassment; (iii) the harassment complained of was based on sex; (iv) the harassment complained of was sufficiently pervasive so as to alter the conditions of employment and create an abusive working environment; and (v) respondeat superior. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 608.) Even “[a] single incident of severe harassment is sufficient to create a triable issue regarding the existence of a hostile work environment if the harassing conduct has unreasonably interfered with the plaintiff’s

work performance or created an intimidating, hostile, or offensive work environment.” (Gov. Code, § 12923(b).)

“The factors that can be considered in evaluating the totality of the circumstances are: (1) the nature of the unwelcome sexual acts or works (generally, physical touching is more offensive than unwelcome verbal abuse); (2) the frequency of the offensive encounters; (3) the total number of days over which all of the offensive conduct occurs; and (4) the context in which the sexually harassing conduct occurred.” (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 610.)

“Sexually harassing conduct may be either ‘quid pro quo’ or ‘hostile work environment’ sexual harassment.” (2 Cal. Code Regs., tit. 2, § 11034(f).)

“Harassment” includes but is not limited to:

(A) Verbal harassment, e.g., epithets, derogatory comments or slurs on a basis enumerated in the [FEHA]; (B) Physical harassment, e.g., assault, impeding or blocking movement, or any physical interference with normal work or movement, when directed at an individual on a basis enumerated in the Act; (C) Visual forms of harassment, e.g., derogatory posters, cartoons, or drawings on a basis enumerated in the Act; or (D) Sexual favors, e.g., unwanted sexual advances, which condition an employment benefit upon an exchange of sexual favors. [See also section 11034(f)(1).]

(Cal. Code Regs., tit. 2, § 11019(b)(2)(A)-(D).)

“[T]he prohibition against sexual harassment includes protection from a broad range of conduct, ranging from expressly or impliedly conditioning employment benefits on submission to or tolerance of unwelcome sexual advances, to the creation of a work environment that is hostile or abusive on the basis of sex.” (Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 277; see also Liu, supra, 105 Cal.App.5th at pp. 796-797, review denied (Dec. 31, 2024), cert. denied (U.S., Oct. 6, 2025, No. 24-1215) 2025 WL 2823782 [sexual harassment based on comments about the plaintiff’s appearance as unattractive and “too skinny,” references to female employees as “little girls,” and that homosexuals were “creepy”]; Landucci v.

State Farm Ins. Co. (N.D. Cal. 2014) 65 F.Supp.3d 694, 704-705 [finding excessive micro-managing and criticisms to which plaintiff’s male co-workers were not subject to be harassment].) “[I]t

is the disparate treatment of an employee on the basis of sex—not the mere discussion of sex or use of vulgar language—that is the essence of a sexual harassment claim.” (Lyle v. Warner Brothers Television Productions, supra, 38 Cal.4th at p. 280.)

Applicable Pleading Standard

The Court must first determine whether the plaintiff alleges conduct constituting a sexual harassment dispute, so as to come within the EFAA and then decides whether the EFAA makes the arbitration agreement unenforceable as to the entirety of the pleading’s claims. (Ding v. Structure Therapeutics, Inc. (N.D. Cal. 2025) 765 F.Supp.3d 897, 899.)

Federal district courts have reached different results as to the appropriate standard. Some have held the EFAA applies only where the plaintiff's sexual harassment related claims are capable of withstanding a motion to dismiss under Federal Rules of Civil Procedure, rule 12(b)(6) (28 U.S.C.). (See, e.g., Yost v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 563, 577, 586 [requiring a plaintiff's claim to meet the federal “plausibility” standard articulated in Bell Atl. Corp. v. Twombly (2007) 550 U.S. 544, 570 and Ashcroft v. Iqbal (2009) 556 U.S. 662, 678 in order to avoid arbitration via the EFAA].)

A claim is plausible when the plaintiff pleads facts that allow the court to draw the reasonable inference that the defendant is liable. (Ashcroft v. Iqbal (2009) 556 U.S. 662, 678.) The complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” (Ibid.) A court disregards conclusory factual allegations and “draw[s] on its judicial experience and common sense” to determine whether a claim is plausible. (Id. at pp. 678-679; see also Bell Atlantic Corp. v.

Twombly (2007) 550 U.S. 544, 555 [holding “a plaintiff’s obligation . . . requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do”]; Moss v. U.S. Secret Service (9th Cir. 2009) 572 F.3d 962, 969 [citing Twombly and holding the nonconclusory “factual content,” and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief].)

At least one district court has adopted instead the standard articulated in Bell v. Hood (1946) 327 U.S. 678, asking whether the alleged claim is “ ‘wholly insubstantial and frivolous’ or ‘appears to be immaterial and made solely for the purpose of obtaining jurisdiction.’ ” (Diaz-Roa v. Hermes Law, P.C. (S.D.N.Y. 2024) 757 F.Supp.3d

498, 542 [Congress intended in passing the EFAA only that “the conduct must be actually alleged and with sufficient specificity that the court is able to determine the law is applicable and that there is a real and nonfrivolous reason to believe that the conduct violates that law against sexual harassment”].)

Although no published California decision has definitively adopted a pleading standard, courts have recognized that several federal courts apply the plausibility standard when determining whether a plaintiff has adequately alleged a sexual-harassment dispute within the meaning of the EFAA. (See Liu v. Miniso Depot CA, Inc. (2024) 105 Cal.App.5th 791, 801-802 (“Liu”).) In Quilala v. Securitas Security Services USA, Inc. (2025) 117 Cal.App.5th 75, the court applied the plausibility standard without discussing whether it was required. (Id. at pp. 86-87 [concluding, “the trial court correctly determined that [the plaintiff's] allegations stated a plausible claim of sexual harassment ... bringing the dispute within the scope of the EFAA”].)

Allegations in the FAC

Plaintiff has met her burden under either the “plausibility” or “nonfrivolous” pleading standard, as the FAC sufficiently alleges a claim for harassment based on sex.

Plaintiff alleges she was subject to harassment based on her sex and pregnancy. (FAC, ¶¶ 10-12.) Plaintiff alleges supervisors and senior executives made derogatory comments regarding pregnant women and working mothers, criticized her pregnancy-related absences and remote-work accommodations, monitored her attendance, and treated working fathers more favorably than working mothers. (Id., ¶¶ 13-24, 30, 34, 40, 44.) Plaintiff further alleges Defendant failed to investigate complaints regarding the alleged harassment, and that Plaintiff was terminated shortly after giving birth while on protected leave, whereas similarly situated male employees who received remote-work accommodations were not terminated. (Id., ¶¶ 16, 25- 36.) Plaintiff alleges the conduct created a hostile work environment based on her sex, pregnancy, and status as a working mother. (Id., ¶¶ 39-47.)

Although the allegations may ultimately prove insufficient to prevail on the merits, the FAC plausibly alleges conduct directed at Plaintiff because of her pregnancy and status as a working mother that, viewed collectively, could support a hostile-work-environment claim.

At this stage, the Court is not deciding whether Plaintiff will ultimately prevail on her FEHA harassment claim, but only whether

the FAC sufficiently alleges a sexual-harassment dispute within the meaning of the EFAA. The inquiry into whether a working environment is hostile or abusive enough to be actionable is contextspecific and often requires a nuanced assessment of the participants’ behavior and interactions that is difficult to undertake at the pleading stage. (See Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 283; see also Gov. Code, § 12923, subd. (e) [“Harassment cases are rarely appropriate for disposition on summary judgment ... [because] hostile working environment cases involve issues ‘not determinable on paper’ ”].)

Although several allegations involve workplace supervision and attendance monitoring that may ordinarily constitute personnelmanagement actions, the FAC alleges those actions were accompanied by repeated pregnancy- and motherhood-related comments by senior leadership, which sufficiently ties the alleged conduct to Plaintiff’s protected status at the pleading stage.

While Defendant argues the EFAA does not apply to FEHA hostile work environment claims premised on pregnancy, California law expressly recognizes harassment based on pregnancy as harassment “because of sex.” (Gov. Code, § 12940(j)(4)(C).) Because the EFAA applies to disputes relating to conduct alleged to constitute sexual harassment under applicable state law, Plaintiff’s pregnancy-based harassment allegations fall within the scope of the EFAA.

EFAA Applies to All Claims

Because Plaintiff has sufficiently alleged a sexual-harassment dispute within the meaning of the EFAA, the arbitration agreement is unenforceable as to the entire action, not merely the harassment claim. (See Liu, supra, 105 Cal.App.5th at pp. 802-807; Doe v. Second Street Corp. (2024) 105 Cal.App.5th 552, 559; Casey v. Superior Court (2025) 108 Cal.App.5th 575, 583; Quilala v. Securitas Security Services USA, Inc. (2025) 117 Cal.App.5th 75, 88- 89.)

Accordingly, the motion is DENIED.

Plaintiff to give notice.