Jon Davler, Inc. v. Arch Ins. Co., 229 Cal. App. 4th 1025 (2014)
After one of the owners of Jon Davler, Inc. (Christina Yang) found a used sanitary napkin in the women’s bathroom and blood around the toilet seat, she started yelling at the employees that they were “dirty” and demanded to know which of them was on her menstrual period. When the employees denied they were on their menstrual cycle, Yang instructed another female employee (against her will) “to take each of the employees into the bathroom, one by one, and check their panties to see who was on their menstrual period, by requiring each to pull down her pants and underwear for an inspection.” Not surprisingly, the employees brought suit against Jon Davler and Yang for sexual harassment, invasion of privacy and false imprisonment. Jon Davler tendered the action to its insurer, Arch Insurance, which denied coverage based on an employment-related practices exclusion, which triggered this insurance coverage lawsuit by Jon Davler against Arch. The trial court sustained Arch’s demurrer to the complaint, and the Court of Appeal affirmed dismissal of the action, holding that the employment practices exclusion applied. See also Baek v. Continental Cas. Co., 230 Cal. App. 4th 356 (2014) (massage therapist’s alleged sexual assault against client was not covered under massage therapy center’s comprehensive general liability insurance policy).