Continuing Violations Trigger EFAA’s Ban On Arbitration

Employment Law

Sexual harassment claims alleging continuing violations triggered the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), rendering an arbitration agreement in an employee handbook unenforceable, according to a California appellate court.

In February 2023, Jane Doe filed suit against The Huntley Hotel and two supervisors. She alleged that she worked as a server at the hotel’s restaurant from 2016 to 2022. In October 2019, she was attacked and sexually assaulted outside of work by a coworker, Ryan Jackson.

Doe reported the assault to her supervisor and asked not to be scheduled to work with Jackson.

In October 2021, a new supervisor was hired and told the situation. He called Doe into his office and asked for details of the assault. When she objected, he said he would schedule her and Jackson to work together unless she did.

After Doe described the assault, the supervisor told her it was her fault. The next day, he scheduled Doe and Jackson to work on the same shift and, after that, they were regularly scheduled to work together.

Doe began throwing up before nearly every shift and having panic attacks. She stopped working and filed her lawsuit, asserting 11 causes of action including sexual harassment and hostile work environment and failure to prevent discrimination, harassment and retaliation, among others.

The defendants filed a motion to compel arbitration. They argued that Doe signed a document in 2016 acknowledging that she had received and was bound by the terms of the employee handbook, which included a provision relating to mandatory, binding arbitration of any employment-related dispute.

Doe objected. She told the court that from late June 2019 through May 2022, she repeatedly asked the defendants to separate her from Jackson, who continued to make sexual overtures to her, but that, instead, the defendants forced her to relive the traumatic experience, blamed her for it and required her to have frequent contact with Jackson.

Her sexual harassment claim accrued on May 13, 2022, the day she was constructively discharged, she contended—after the EFAA’s effective date of March 3, 2022.

The trial court denied the motion to compel arbitration, and the defendants appealed.

Affirming the denial, the appellate panel rejected the defendants’ position that the “crux” of the alleged wrongful conduct occurred before the EFAA’s effective date.

While the hotel tried to argue that a national split of authority existed on the question of when a sexual harassment claim “accrues” under the EFAA where a plaintiff alleged sexually harassing conduct occurring both before and after the statute’s enactment, the court disagreed.

Each case the defendants relied upon involved sexual harassment or sexual assault that occurred before the EFAA’s enactment, the court said.

In contrast, several federal courts—in Illinois, New York, Texas and the Second U.S. Circuit Court of Appeals—have held that, where a plaintiff alleges sexual harassment both before and after the EFAA’s adoption, the action accrues on the date of the last alleged act.

“We agree with the federal authorities … that the EFAA applies where a plaintiff alleges a course of sexually harassing conduct that occurs both before and after the EFAA’s enactment,” the court wrote. “As many of those cases note, the U.S. Supreme Court has said that where sexual discrimination or harassment claims involve repeated conduct, ‘[t]he ‘unlawful employment practice’ … cannot be said to occur on any particular day. It occurs over a series of days or perhaps years and, in direct contrast to discrete acts, a single act of harassment may not be actionable on its own.’”

Against this backdrop, Congress passed the EFAA, importing the meaning of “accrue” developed by federal and state courts over many years in the context of sexual harassment claims—“that is, that a sexual harassment claim asserting a continuing violation ‘accrues’ on the date of the last act constituting such violation, even if the conduct could have been actionable earlier,” the court explained.

By enacting the EFAA, Congress contracted arbitrability rather than expanding it, the court added, meaning that a “heavy presumption” of arbitrability is not appropriate.

Applying this understanding to the case, the court said Doe’s original and first amended complaint “unquestionably” alleged violations both before and after the EFAA’s effective date, rendering the arbitration provision unenforceable.

Further, the statue precluded arbitration of Doe’s other claims.

“By its plain language … the statute applies to the entire case, not merely to the sexual assault or sexual harassment claims alleged as a part of the case,” the court wrote. “It is significant, moreover, that the statute does not require that the pendant claims arise out of the sexual assault or sexual harassment dispute; it is enough that the case relates to the sexual assault or sexual harassment claims.”

Doe’s case clearly “relates to” the sexual harassment dispute, because all of the causes of action are asserted by the same plaintiff, against the same defendants, and arise out of her employment by the hotel, the court said.

To read the opinion in Doe v. Second Street Corp., click here.

Why it matters:

The decision was the first in California to address when a sexual harassment claim “accrues” under the EFAA where a plaintiff alleged sexually harassing conduct occurring both before and after the statute’s enactment. The appellate panel was clear that the statute applies when the alleged course of conduct occurs both before and after the EFAA’s enactment. The court also emphasized that the statute applies to an entire case, not merely to the sexual assault or sexual harassment claims alleged as part of the case.

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