Arbitration Agreements Deemed Invalid for Sexual Harassment Claims Filed After New Law
In a significant ruling, a federal appellate court clarified that sexual harassment and similar claims cannot be forced into arbitration. The United States Court of Appeals for the Eighth Circuit affirmed that arbitration agreements cannot be enforced for claims of sexual harassment and assault filed after the enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. This decision came in the case of Famuyide v. Chipotle Mexican Grill, Inc., where the court upheld a district court’s refusal to compel arbitration based on this new federal law.
The case centers on Eniola Famuyide, who filed a lawsuit against Chipotle in April 2023, alleging sexual harassment and assault by a co-worker, as well as related claims under Minnesota law. Chipotle attempted to enforce an arbitration agreement that was part of Famuyide’s employment contract. However, the court determined that the dispute arose after March 3, 2022, the effective date of the federal law, allowing Famuyide to bypass the arbitration clause.
The ruling highlights the court’s interpretation of when a “dispute” arises under the statute. The court rejected Chipotle’s argument that the dispute began when the harassment and assault occurred in 2021, or when preliminary legal correspondence was exchanged in early 2022. Instead, the court found that no formal conflict or controversy existed between Famuyide and Chipotle before the Act’s effective date, making the arbitration agreement unenforceable.
This decision underscores the protection the Ending Forced Arbitration Act provides to survivors of sexual harassment and assault, ensuring that such claims can be pursued in court, rather than being forced into private arbitration, as long as the disputes arose after the law’s enactment. The Eighth Circuit’s ruling is a clear message that arbitration clauses will not be a barrier to seeking justice in these sensitive and significant cases.
If you have questions about sexual harassment, forced arbitration, or employment law generally, contact our team of experienced trial lawyers today.
