California Court of Appeal Holds that Arbitration Agreement is Unenforceable as to All Claims Where Plaintiff Alleges Sexual Assault or Harassment
In Liu v. Miniso Depot CA, Inc., No. B338090, the California Court of Appeal, Second Appellate District held that the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFA Act”), 9 U.S.C. ยง 401-402, prohibits arbitration of all causes of action in a complaint that asserts both sexual harassment and non-sexual harassment claims. The EFA Act restricts employers from requiring employees to arbitrate disputes related to either sexual assault or sexual harassment and amends the Federal Arbitration Act (“FAA”) to allow such claims to proceed in court on both an individual and class-wide basis.
Liu filed a complaint against Miniso Depot in which she alleged two categories of claims. In the first category are claims that typically fall within the EFA Act: she alleged that Miniso Depot created a hostile work environment for her and other women and discriminated against her and other women on the basis of their gender and sexual orientation. In the second category are claims that usually do not fall within the EFA Act: she alleged that Miniso Depot misclassified her as an exempt employee and violated numerous wage and hour requirements; retaliated against her for whistleblowing in violation of Labor Code section 1102.5; and constructively discharged her. Miniso Depot filed a motion to compel arbitration of Liu’s non-sexual harassment claims. The California Court of Appeal held that under the EFA Act, when a plaintiff’s lawsuit contains at least one claim that fits within the scope of the act, the arbitration agreement is unenforceable as to all claims asserted by the plaintiff.
This case may necessitate changes to existing arbitration agreements and affect litigation strategy in future matters. Please contact our Employment Law Group for further information and guidance.
Melissa A. Meister is Senior Counsel at Hunt, Ortmann, Palffy, Nieves, Darling & Mah, Inc. Ms. Meister is an experienced trial and appellate attorney who has tried cases and argued appeals in state and federal courts across the country. She specializes in labor and employment counseling and litigation, and also handles business and construction litigation matters.
