The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), which amended the Federal Arbitration Act (FAA), was signed into law on March 3, 2022, by President Joe Biden. This pivotal legislation allows individuals with sexual assault or harassment claims to pursue their cases in court, even if they had previously agreed to arbitration. It also permits these individuals to initiate class or collective actions, regardless of any prior waivers.
Under the EFAA, the decision on the enforceability of arbitration provisions and waivers is made by the claimant or their representative, enabling them to reject such agreements. Significantly, the authority to evaluate the validity of arbitration agreements related to these claims lies with the court, not an arbitrator, which includes determining the applicability of the Act itself.
Casey v. Superior Court (D.R. Horton Inc.): A Closer Look
Recently, the California First District Court of Appeal provided further clarification in Casey v. Superior Court (D.R. Horton Inc.), confirming that California employers cannot avoid litigation by attempting to circumvent the protections established under the EFAA.
In Casey, the Petitioner, Kristin Casey, filed a lawsuit against her former employer, D.R. Horton, Inc., and employee Kris Hansen, alleging sexual harassment, discrimination based on gender or sex, retaliation, and failure to prevent discrimination and harassment. D.R. Horton sought to compel arbitration, but Casey opposed, referencing the EFAA, which makes arbitration agreements unenforceable in sexual harassment cases.
D.R. Horton argued the EFAA did not apply because the parties had agreed to apply California law. Although the trial court granted D.R. Horton’s motion to compel arbitration, Casey filed a petition for a writ of mandate.
The Court’s Ruling and Its Implications
On de novo review, the California First District Court of Appeal ruled that the EFAA applied to D.R. Horton because of the company’s involvement in interstate commerce. The Court held that Casey could invoke the EFAA’s protections because:
- The EFAA applies when a company sufficiently engages in interstate commerce.
- The EFAA preempts state law, allowing an employer like D.R. Horton to compel arbitration.
The Court reached its decision after Casey provided evidence that D.R. Horton operated in 33 states, employed tradesmen across several states, and communicated with buyers in other states as part of her job.
Why the EFAA Supersedes State Law
The Court also concluded that conflict preemption existed because the EFAA broadly prohibits enforcing arbitration agreements in sexual harassment cases, while the California Arbitration Act (CAA) generally endorses the enforceability of arbitration agreements. According to the Court, D.R. Horton’s attempt to enforce arbitration in Casey’s sexual harassment case by using a choice-of-law provision would conflict with Congress’s objectives in establishing the EFAA.
Your Rights if You’ve Experienced Sexual Harassment
If you have experienced sexual harassment in the workplace, know that you are not alone.
At TONG LAW, our experienced sexual harassment attorneys will fight for your rights. Contact us today for a confidential consultation and let us help you navigate your legal options.
