California Appellate Court Rejects Legislative Attempt To Circumvent Federal Arbitration Act On Claims Involving The Ralph Act And Bane Act

by Jackson Lewis P.C.

In Saheli v. White Memorial Medical Center (B283217, Cal. Ct. App., March 14, 2018), the Court of Appeal for the Second Appellate District addressed for the first time whether restrictions on arbitration agreements contained in the Ralph Act and Bane Act are preempted under the Federal Arbitration Act (“FAA”).

“The Ralph Act broadly provides that all persons ‘have the right to be free from any violence, or intimidation by threat of violence, committed against their persons or property’ because of, among other things, the person’s race, religion, national origin, sex, sexual orientation, or position in a labor dispute.” The Bane Act, enacted 10 years after the Ralph Act, “was ‘intended to supplement the Ralph Civil Rights Act as an additional legislative effort to deter violence’” and “provides that if a person interferes, or attempts to interfere, by threats, intimidation, or coercion, with the exercise or enjoyment of the constitutional or statutory rights of ‘any individual or individuals,’” they may be “‘sue[d] for damages[.]’”

Those familiar with the Ralph Act and Bane Act know that they can provide a parallel remedy in harassment or discrimination cases in which the conduct alleged could also be construed as a “hate crime.”

After a careful analysis, which included an in-depth analysis of the California legislature’s hostility towards arbitration, the Court held that the Acts were preempted to the extent the enforceability of arbitration agreements were conditioned on special requirements not applicable to contracts generally.

In 2014, the Ralph Act and Bane Act were amended to limit the circumstances under which an individual could waive their rights under the Ralph Act or Bane Act, or waive their rights to bring such claims in a judicial forum. The amendments invalidated any agreements or waivers entered into on or after January 1, 2015 that did not meet certain requirements.

On June 7, 2016, plaintiff Gezel Saheli signed an arbitration agreement in connection with a medical residency program at White Memorial Medical Center. The agreement that did not meet the requirements set forth in the Ralph Act and Bane Act.  Less than a year later, Saheli filed a complaint that contained claims under the Ralph Act and Bane Act.  White Memorial Medical Center successful compelled all claims to arbitration with the exception of the Ralph Act and Bane Act claim, which the trial court denied because the arbitration agreement did not comply with the 2014 amendments to the Ralph Act and Bane Act.  White Memorial Medical Center appealed.

On Appeal, the Court addressed two primary issues: (1) whether the parties intended to incorporate state law that are potentially preempted by federal law; and (2) whether the Ralph Act and Bane Act are preempted, in part, by the FAA. As to the first issue, the arbitration agreement provided that the parties agreed not to arbitrate claims that are not arbitrable under “applicable state law.”  Plaintiff argued that this phrase meant “applicable state law notwithstanding any preemptive effect of federal law.”  The Court rejected this argument, finding that the ordinary meaning of the phrase “applicable state law” would not encompass preempted state law.  As to the second issue, the Court noted that the 2014 amendments “represent a hostility to arbitration and their purpose is primarily, if not exclusively, to discourage arbitration of Ralph Act and Bane Act claims.”  The Court remarked in a footnote that the legislative history suggested the amendments were specially tailored to attempt to avoid federal preemption under the FAA.  However, since the FAA preempts state rules discriminating against or disfavoring arbitration agreements, the Court held that 2014 amendments were preempted to the extent they created special requirements that were not applicable to contracts generally.  The Court ordered the trial court to reverse its order and send all claims to arbitration.

This decision is positive news for employers who have arbitration agreements or are deciding whether to compel arbitration of a Ralph Act and/or Bane Act claim. This decision makes clear employers will not need to revise their arbitration agreements in order to comply with the Ralph Act or Bane Act’s special requirements.  This decision also provides controlling authority for trial courts asked to rule on a motions to compel arbitration concerning the Ralph Act or Bane Act.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jackson Lewis P.C. | Attorney Advertising

Written by:

Jackson Lewis P.C.

Jackson Lewis P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.