About two months ago I posted on LinkedIn about a case before the Eighth Circuit Court of Appeals dealing with when The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) applies.
The EFAA basically says that employers no longer can force claims of sexual harassment/assault into arbitration. Simple enough, right?🤷🏻♂️ No way! One of the major issues that courts are addressing is determining when the EFAA applies to specific claims. Does it only apply to claims where the conduct giving rise to the claim happened after the law was enacted? Does it apply if the conduct giving rise to the claim happened before the law was enacted but the lawsuit is filed after the law was enacted?
Well, the Eighth Circuit finally gave us some guidance.
In Famuyide v. Chipotle Mexican Grill, Inc., the Eighth Circuit Court of Appeals held that Chipotle can’t arbitrate Famuyide’s claims that she was raped by a co-worker on the job, rejecting Chipotle’s arguments that the date of the alleged incident pushed her claims outside the bounds of a law shielding sex misconduct claims from arbitration. The court’s opinion is attached to my LinkedIn post.
Essentially, the court held that a formal dispute hadn’t yet kicked off when the incident occurred.
Famuyide claims that a coworker sexually assaulted her in November 2021. She says she reported the assault to her supervisor but ultimately, her employer, Chipotle, never investigated. In July 2022, Famuyide sued Chipotle and Chipotle moved to compel arbitration.
Famuyide said “not so fast,” taking the position that the EFAA, effective March 3, 2022, invalidated her arbitration agreement. The district court agreed with Famuyide, denying arbitration and ruling that the dispute arose when Famuyide filed her lawsuit, which was after the EFAA’s effective date.
The Eight Circuit agreed with Famuyide.
“At that point, … Famuyide had not asserted any right, claim, or demand against Chipotle, and Chipotle had not registered disagreement with any position of Famuyide’s,” the court said.
The ruling is the first federal appellate decision on this very important issue, whether a lawsuit filed after the EFAA’s effective date, that is based on conduct that happened before that effective date, can dodge arbitration.
This decision impacts employers nationwide.
It will be interesting to see what other courts of appeal decide.
Stay tuned!