A federal court has allowed an employee to move a dispute from arbitration to court after discovery uncovered evidence supporting a sex-based harassment claim.
In this case, an employee initially asserted claims based on national origin and her status as a domestic violence victim. During arbitration, she obtained internal communications and testimony that allegedly revealed sex-based stereotyping and bias. The Ninth Circuit concluded that, under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, an employee does not waive the right to pursue a covered sexual harassment claim in court merely by initiating arbitration before discovering the factual basis for that claim.
The decision creates uncertainty for employers because a dispute that begins in arbitration may move to court if later-discovered evidence supports a plausible sexual harassment claim.
The ruling also suggests that courts may interpret the EFAA broadly. These allegations did not involve sexual advances or sexually explicit conduct, but the court found that claims of sex-based stereotyping where management preferred a male executive, sidelined the employee, and credited criticism that she was “too aggressive” qualify as sexual harassment.
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