How the Ending Forced Arbitration Act Can Help Workers Harmed by Sexual Harassment and Other Illegal Conduct

March 3, 2024, represented the second anniversary of the passage of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA,) an act that represents arguably the most groundbreaking pieces of federal legislation to arise in the wake of the #metoo movement. The EFAA allows qualifying sexual harassment victims to bypass arbitration and continue litigating in court regardless of the arbitration agreements they previously signed with their employers. Persuading a judge that the EFAA applies to your case and permits you to defeat your employer's push for compulsory arbitration often can be a critical step on the path to holding accountable those responsible for the harassment you endured, and is one area among the many where having legal representation from a skilled New York sexual harassment lawyer can be vital to your success.

A recent sexual harassment case from here in Manhattan illustrates how broad the EFAA's application is, particularly in cases where the worker alleged claims that were related to, and independent of, sexual harassment.

The employee, I.M., was a talent acquisition head who worked for a fintech startup in Chelsea from 2021 to early 2023. Much of the misconduct that allegedly harmed the manager occurred outside the realm of sexual harassment. For example, according to her lawsuit, after she requested Family and Medical Leave Act (FMLA) leave to undergo breast cancer treatment in Texas, her supervisor failed to provide her with FMLA-compliant leave paperwork and actively discouraged her from taking FMLA leave.

The manager also allegedly endured "dozens if not hundreds of disparaging remarks" about her race and age. Her supervisor frequently called her "an old Asian woman" and "Korean woman." When the manager advocated for the business to adopt a menstruation leave policy, the supervisor pointedly asked the woman, who was in her late 40s, "Do you even still menstruate?"

The manager's lawsuit alleged claims of FMLA interference and retaliation as well as race/national origin discrimination, age discrimination, gender discrimination, and sexual harassment.

After the manager sued, the employer attempted to reroute the case from federal court to an arbitration tribunal based on the parties having a contractual agreement requiring the arbitration of all disputes related to the woman's employment with the company. The manager argued that she was entitled to maintain her court case and avoid arbitration based on the EFAA.

The Minimum Requirements

The first issue the court addressed related to what a worker needs to trigger the EFAA. The opinion noted that a worker must put forward a sexual harassment claim that properly alleges each element of an action for sexual harassment, with "properly" meaning that each component is "facially plausible."

The employer argued that the manager's allegations amounted to "nothing more than mere sporadic, insensitive comments." That approach failed because the employer essentially argued the wrong legal standard. Arguing that the allegations demonstrated nothing more than "sporadic insensitive comments" essentially posited that the alleged harassment was not sufficiently pervasive or severe. However, the severe-or-pervasive standard is the rule under federal law, but not the New York State Human Rights Law (NYSHRL) or the New York City Human Rights Law (NYCHRL.)

The NYCHRL requires that a worker merely allege that she was the target of “unwanted gender-based conduct” and prove that "she has been treated less well than other employees because of her gender." State law only demands that a worker show that "she was subjected to inferior terms, conditions or privileges of employment because of the individual’s membership in one or more of the protected categories."

In establishing this sort of NYCHRL claim, a worker must demonstrate that the mistreatment was the result of a "discriminatory animus." One way the worker can do this is with direct evidence, which can be satisfied with proof of "comments referring to employees by demeaning stereotypes that make clear that the employee in question is not truly welcome in the workplace."

The manager's allegations were enough to satisfy that unwelcome-in-the-workplace standard and clear the applicable legal hurdle.

Avoiding Arbitration of All Claims

That was crucial because of the way the EFAA works. If any of your claims are sufficient to satisfy the threshold regarding harassment, that triggers the EFAA and renders your arbitration agreement unenforceable in its entirety. That meant that this manager could avoid arbitration completely and litigate her entire case, both her sexual harassment claims and her causes of action that were unrelated to harassment.

Although the #metoo movement put a much-needed spotlight on workplace sexual harassment, it remains a far-too-common phenomenon. Sexual harassment can impair or even destroy a victim's job or entire career. If you've endured this type of mistreatment, don't think you must persevere in silence. The helpful New York sexual harassment attorneys at Phillips & Associates understand how daunting and intimidating taking action can be. Our knowledgeable team is here to fight for you and to be the powerful voice you deserve. Contact us online or at (866) 229-9441 today to set up a free and confidential consultation.

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