The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act
The New Jersey Arbitration Act and Federal Arbitration Act generally require enforcement of agreements to arbitrate disputes. This extends to the enforcement of arbitration agreements in employment contracts.
However, in response to the #MeToo Movement, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The EFAA provided:
Notwithstanding any other provision of this title, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.
The Appellate Division Explores the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act
The Appellate Division of the Superior Court of New Jersey examined whether non-sexual harassment claims need to be separated from sexual harassment claims and sent to arbitration under the EFAA in the consolidated case of McDermott v. Guaranteed Rate, Inc., and Geraldine Rivera-Santana v. CIF Shipping, LLC.
Megan McDermott and Geraldine Rivera-Santana both signed arbitration agreements with their employers. Over time, both alleged that they experienced severe sexual harassment and left their jobs, either by being terminated or allegedly being “constructively discharged” – i.e., the harassment was so severe and/or pervasive that it left them with no choice but to quit.
After their employment ended, they both filed lawsuits in the Superior Court of New Jersey alleging sexual harassment in violation of New Jersey’s Law Against Discrimination. However, they both pled additional counts in their complaints. McDermott additionally included counts for sexual harassment and gender discrimination in violation of the New Jersey Law Against Discrimination. She also included counts for failure to pay wages due at termination, breach of contract, commercial misappropriation of her likeness, unfair competition and tortious interference with prospective contractual relations, all of which she maintained were based on the course of conduct which was the basis for her sexual harassment and gender discrimination claims.
Rivera-Santana initially alleged discrimination, hostile work environment and wrongful termination on the basis of pregnancy, retaliation and pregnancy discrimination. She amended her lawsuit to include claims for sexual harassment, gender discrimination and hostile work environment because of her gender.
In both cases the employers moved to dismiss all of the claims other than sexual harassment and have them sent to arbitration based on the arbitration agreements they signed. They also alleged that much or all of the alleged harassment was beyond the statute of limitations and should be dismissed.
In both cases, the trial court judges dismissed all of the claims which weren’t for sexual harassment so that they could be heard by an arbitrator, and allowed the sexual harassment claims to proceed in the Superior Court. They denied the argument that the claims were time-barred based on the continuing violation doctrine.
The Appellate Division’s Decision
The parties appealed the decision to the Appellate Division of the Superior Court. The Appellate Division made quick work of the statute of limitations defense. It agreed with the trial court judges that the continuing violation doctrine barred dismissal. The court explained the purpose and application of the continuing violation doctrine:
hostile environment claims are different in kind from discrete acts because their very nature involves repeated conduct. In a hostile work environment case, the unlawful employment practice therefore cannot be said to occur on any particular day since it occurs over a series of days or perhaps years and, in direct contrast to discrete acts, a single act of harassment may not be actionable on its own…. if a plaintiff has alleged a pattern or series of acts, any one of which may not be actionable as a discrete act, but when viewed cumulatively constitute a hostile work environment, then their cause of action would have accrued on the date on which the last act occurred, notwithstanding that some of the component acts of the hostile work environment have fallen outside the statutory time period.
Thus, since they both alleged continuing violations, their cases could proceed through discovery to determine if the evidence supported their allegations.
The question of whether the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 was a more difficult analysis since it was a case of first impression in New Jersey courts. However, the Appellate Division was able to look to the Federal Courts which had applied the EFAA. It found that the majority of courts which had addressed the matter found that when a lawsuit for sexual harassment also contained other claims as well, they should not be separated out and sent to arbitration. Rather, they should all remain in court and heard together.
The Appellate Division explained that the EFAA itself stated that “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.
The court found that the word “case” meant that it referred to the whole lawsuit. If Congress had meant that only the sexual harassment claims could stay in court it would have said so because “case” meant all the “claims” brought together in the matter.
It went on to reject the argument that to be “related” the claims must be “inexorably intertwined.” Rather, employees could satisfy the “related to” requirement when “…all of plaintiffs’ causes of action relate to their employment relationship, which, according to both, was animated by sexual harassment.”
Thus, the Appellate Division remanded the cases to the Superior Court for all claims within the lawsuit to be tried there together, not just the sexual harassment claims.
The Takeaway
If a lawsuit is filed in which the complaint contains counts for sexual harassment and claims which are not for sexual harassment but relate to an employment environment allegedly tainted by sexual harassment, those matters will all be heard in court if the employee/plaintiff so chooses, even if the parties had an arbitration agreement.
Contact Us
Our New Jersey employment attorneys represent employees and employers in all aspects of New Jersey employment law, including disputes about claims of sexual harassment and other forms of discrimination. Call us at (973) 890-0004 or fill out the contact form on this page. We can help.