In 2022, Congress amended the Federal Arbitration Act (FAA) by passing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) (9 U.S.C. §§ 401- 402). In general terms, the EFAA renders arbitration agreements unenforceable at the plaintiff’s election in sexual assault and sexual harassment cases that arise or accrue on or after March 3, 2022, the EFAA’s effective date.

In October 2021, the Second Street Corporation dba The Huntley Hotel hired Jane Doe’s (fictitiously named plaintiff) co-worker Rivani as its food and beverage director. During Rivani’s training, plaintiff’s manager told Rivani that Jackson had sexually assaulted Jane Doe and should not be scheduled with her unless it was absolutely necessary.

The following month, Rivani called Jane Doe into his office and asked for details of the assault. Jane Doe said she did not feel comfortable describing it, but Rivani said he would schedule Doe and Jackson together unless she did. After Jane Doe described the assault, Rivani told her it was her fault.

The following day, Rivani scheduled Doe and Jackson to work on the same shift, and after that, Doe and Jackson were regularly scheduled to work together. Jane Doe began throwing up before nearly every shift. In February 2022, Raman told Doe’s general manager that Doe and Jackson had a consensual sexual relationship.

In April 2022, Jane Doe ran into Jackson when she arrived for her shift. She ran up to the stairwell and tried to access the roof, but the exit code to the roof access door had been changed. Doe was relieved because she had thoughts of jumping off the roof. When she came down the stairs, Rivani saw that she was crying and asked, “Is this work related?” Rivani then “looked her up and down and . . . walked away.”

In early May 2022, when Rivani saw Jane Doe, he loudly asked another employee, “[W]hat [is] the new code to the roof?” Doe began to have another panic attack and called in sick.

Several days later, Jane Doe reported to her medical provider that she was suicidal, and she was placed on an involuntary psychiatric hold pursuant to Welfare and Institutions Code section 5150. On the advice of her doctors, plaintiff has not returned to work since May 10, 2022.

Jane Doe filed the present case against Second Street Corporation dba The Huntley Hotel and two of its supervisors in 2023. The operative complaint alleges a pattern of sexual harassment and discrimination both before and after the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act’s effective date, as well as a variety of wage-and-hour violations.

Defendants moved to compel arbitration, citing an arbitration provision in the hotel’s employee handbook. The trial court denied the motion to compel, concluding that the EFAA rendered the arbitration provision unenforceable as to all of plaintiff’s claims. The trial court also granted plaintiff leave to file a first amended complaint adding additional claims, including a claim for constructive wrongful termination.

The California Court of Appeal affirmed the trial court in the published case of Doe v Second Street Corporation -B330281 (Sept 2024).

The hotel contends that where, as here, a plaintiff alleges sexually harassing conduct that occurred both before and after the EFAA’s effective date, the case should be sent to arbitration if the plaintiff’s claims accrued, or the “crux” of the alleged wrongful conduct occurred, before the EFAA’s effective date.

The parties agreed that no California case has addressed when a sexual harassment claim “accrues” under the EFAA where, as here, a plaintiff alleges sexually harassing conduct

“By its terms, the EFAA applies “with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act” i.e., March 3, 2022. Courts have interpreted this occurring both before and after the EFAA’s enactment.

“We affirm the trial court’s order in its entirety. We conclude that the trial court properly found that under the EFAA’s plain language, (1) plaintiff’s sexual harassment claims alleging continuing violations both before and after the EFAA’s effective date are exempt from mandatory arbitration, and (2) plaintiff’s other causes of action are also exempt from mandatory arbitration under the EFAA because they are part of the same “case.” Accordingly, the trial court properly denied defendants’ motion to compel arbitration.”

“We further conclude that the trial court did not abuse its discretion by permitting plaintiff to file a first amended complaint.”

Court Decides When Ending Forced Arbitration of Sexual Assault Act Applies