The U.S. District Court for the Southern District of New York recently held that, as a matter of first impression, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) does not invalidate a binding arbitration agreement if the plaintiff fails to plead a plausible sexual harassment claim.

See: Yost v. Everyrelam, Inc. 2023 WL 2224450 (S.D.N.Y. Feb. 24, 2023).

The EFAA has been in force since March 3, 2022. It defines a “sexual harassment dispute” as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal or State law”. And it renders pre-dispute arbitration agreements unenforceable with respect to a case filed that relates to a sexual harassment dispute. The purpose of the EFAA is to empower sexual harassment claimants to pursue their claims in a court as opposed to before an arbitrator.

In this case, the employee sued alleging a multitude of different causes of action including pay discrimination, sexual harassment under state and local human rights laws, retaliation and intentional infliction of emotional distress.

When a number of the defendants moved to compel arbitration of these claims, the plaintiff asserted that the arbitration agreements she had signed were unenforceable because of the EFAA.

However, the District Court found that the sexual harassment claims were implausibly pled and therefore should be dismissed under Federal Rule of Civil Procedure 12(b)(6). Although the plaintiff did plead that words were spoken in her presence about the sexual activities and orientation of co-workers, none of this had anything to do with the plaintiff’s own gender or sex. The Court found that this was a requirement to state a plausible claim, and that the mere fact that the comments may be crude, inappropriate or uncivil was not enough to allow the claim to stand.

With the sexual harassment claim thus gone, the Court found that the balance of claims were not barred from arbitration under the EFAA.

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