by The Eighth Circuit Court of Appeals (Eighth Circuit) recently issued a decision interpreting when a ‘dispute’ regarding sexual harassment or assault ‘arises’ for purposes of applying the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA). The EFAA is a federal law that gives employees the option of initiating claims of workplace sexual assault or harassment through a lawsuit instead of enforcing an arbitration agreement made with the employer. The EFAA only applies to disputes or claims that arise on or after March 3, 2022.
At issue in the case of Famuyide v. Chipotle Mexican Grill, Inc., (8th Cir., August 5, 2024) was the question of when the dispute involving sexual assault and subsequent harassment arose. The alleged sexual assault occurred in 2021. The parties exchanged correspondence about the issue of the assault and subsequent harassment during February and March 2022. In July 2022, the employee sued the employer. The employer tried to dismiss the suit and enforce an existing arbitration clause with the employee. The employer claimed that the EFAA did not apply since the assault and first contact with the employee’s counsel occurred before March 3, 2022. The employer appealed the decision of the Minnesota federal district court that, for purposes of the EFAA, the dispute arose in July 2022.
On appeal, the Eighth Circuit decided that the employee could choose to go through the court, rather than an arbitration process, to resolve her claims. It defined ‘dispute’ under the EFAA as occurring when the lawsuit was filed. The appellate court characterized the correspondence with plaintiff’s counsel prior to the filing of the suit as discussing the investigation of the employee’s claims. It noted that there was no firm demand for payment to the employee until the suit was filed.
The terms ‘dispute’ and ‘arise’ are not defined under the EFAA. The Eighth Circuit’s holding points to how this Circuit, with jurisdiction over federal cases brought in Arkansas, Iowa, Minnesota, Nebraska, North Dakota, and South Dakota, defines the terms. Federal courts outside the Eighth Circuit may interpret the terms differently. Employers should consult their local counsel with any questions on the enforcement of arbitration clauses in employee claims involving sexual assault or sexual harassment.
