California Court Expands Tools for Invalidating Arbitration Agreements

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A recent ruling by a California appeals court clarified the implications of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), stating that it not only prohibits the arbitration of sexual harassment claims but also extends this prohibition to all claims brought in the same case. This decision grants employees in California an important avenue to avoid arbitration altogether, which could impact employers across the country as the interpretation of the EFAA evolves through litigation.

The EFAA, enacted in 2022, invalidates pre-dispute arbitration agreements for sexual harassment and sexual assault claims, allowing plaintiffs to choose how to proceed. In the case of Doe v. Second Street Corp, the plaintiff filed claims against her former employer for sexual harassment, constructive discharge, and various wage violations. The employer argued that the claims should go to arbitration, but the court ruled that all claims were exempt due to the nature of the case and the timing of the last act of harassment, which occurred after the EFAA took effect.

Employers in California face new challenges as a result of this ruling. They must reassess their arbitration agreements, ensuring they comply with the court’s interpretation of the EFAA, and continue to enforce robust policies against harassment to minimize disputes. It is recommended that employers stay informed about ongoing litigation surrounding the EFAA, as the law’s application could evolve further, affecting how claims are handled in the future.

If you have any questions regarding this recent ruling, please contact us at info@mnklawyers.com .

 

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