Arbitration is a private legal process where disputes between employees and employers are resolved by a neutral third party, rather than through a public court trial. Many employers include arbitration agreements in their employment contracts, which forces employees to settle workplace disputes through arbitration instead of filing a lawsuit. Employers favor forced arbitration because it is typically faster, less expensive, and more private than going to court. However, forced arbitration can also be disadvantageous to employees, as it often limits their ability to present evidence, appeal decisions, or hold employers publicly accountable.
When it comes to workplace sexual harassment, employees now have stronger legal protections. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) made a significant change by allowing employees to opt out of arbitration agreements for sexual harassment claims. This federal law ensures that victims of workplace harassment are not forced into private arbitration proceedings that tend to favor employers.
A recent California appellate court decision in Casey v. Superior Court reinforces this protection by ruling that employers cannot enforce arbitration clauses—even if an employment contract includes a California choice-of-law provision—to bypass the EFAA. This case serves as an important example of how courts are applying the EFAA to protect employees’ rights.
The Standard Before and After the EFAA: What Changed?
Before the EFAA, arbitration agreements were broadly enforceable, even in cases of workplace sexual harassment. Employees who had signed arbitration agreements were often forced to resolve their claims in private arbitration, which tends to favor employers by limiting transparency, reducing damages awards, and restricting an employee’s ability to appeal an unfair outcome.
The EFAA, which became effective in March 2022, changed this by giving employees the right to opt out of arbitration agreements for claims related to sexual harassment or sexual assault. Under this law:
- Employees can now elect to have their sexual harassment claims heard in court, regardless of whether they signed an arbitration agreement.
- Employers cannot require arbitration for sexual harassment claims based on pre-dispute agreements.
- The law applies retroactively to claims that arose after March 3, 2022, even if the arbitration agreement was signed before that date.
The Casey decision clarifies that employers cannot contract around the EFAA by using California law as a workaround. If a claim involves sexual harassment, the arbitration agreement is invalid, and employees must have access to the courts.
Forced Arbitration Case Summary: Casey v. Superior Court
Background
Kristin Casey, a real estate agent at D.R. Horton, Inc., filed a lawsuit against her former employer and a coworker, Kris Hansen, alleging sexual harassment and related claims under the California Fair Employment and Housing Act (FEHA). Her claims arose from a hostile work environment created by Hansen’s unwanted sexual remarks, which caused her to suffer severe emotional distress, ultimately leading to her resignation.
D.R. Horton sought to enforce an arbitration agreement Casey had signed in 2017, which required disputes to be resolved through JAMS arbitration and included a California choice-of-law provision. The trial court ruled in favor of D.R. Horton, compelling arbitration and reasoning that the EFAA did not apply because the employment contract specified California law.
The Appellate Court’s Ruling
Casey petitioned for a writ of mandate to overturn the trial court’s decision. The California Court of Appeal ruled in her favor, finding that:
- The EFAA applies to all sexual harassment disputes, preempting California arbitration law. The court rejected the argument that a choice-of-law provision could override federal law.
- Employers cannot force arbitration of sexual harassment claims, even if an employee signed an arbitration agreement before the EFAA’s enactment. The key issue is when the claim arose, not when the agreement was signed.
- If a case involves a sexual harassment claim, all claims in the lawsuit—including wage-and-hour claims—can be heard in court. The EFAA applies to an entire case, not just individual claims.
As a result, the appellate court vacated the lower court’s order, allowing Casey to proceed with her lawsuit in court rather than arbitration.
What Can California Employees Take Away from This Case about Forced Arbitration?
The Casey decision is a significant win for employees who experience sexual harassment in the workplace. Here’s what California workers should take away from this ruling:
- You Cannot Be Forced to Arbitrate Sexual Harassment Claims
- If you experience workplace sexual harassment, you have the right to take your case to court—even if you signed an arbitration agreement.
- Your employer cannot use an arbitration clause to silence you or keep the case out of the public eye.
- Your Entire Case May Be Heard in Court
- If you bring a lawsuit that includes sexual harassment claims, all your claims—including wage and hour violations—may be exempt from arbitration. This can be a critical factor in ensuring full recovery for all workplace violations.
- Employers Cannot Work Around Federal Law
- Some employers may attempt to argue that California law allows them to enforce arbitration agreements. The Casey ruling makes it clear: federal law preempts state law in sexual harassment cases.
- If your employer tries to force you into arbitration, consult an employment attorney immediately.
FREQUENTLY ASKED QUESTIONS
Can My Employer Force Me to Arbitrate a Sexual Harassment Claim in California?
No. Under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), employees cannot be forced into arbitration for sexual harassment claims, even if they previously signed an arbitration agreement.
Does the EFAA Apply to Arbitration Agreements Signed Before 2022?
Yes. The EFAA applies retroactively to all claims that arose after March 3, 2022, regardless of when the arbitration agreement was signed.
What Did the Casey v. Superior Court Decision Change about Forced Arbitration?
The Casey decision reinforced that California employees cannot be forced into arbitration for sexual harassment cases, even if their employment contract has a California choice-of-law clause.
What Happens If My Employer Tries to Enforce an Arbitration Clause Anyway?
If your employer attempts to force arbitration for a sexual harassment claim, consult an employment attorney immediately. Courts have ruled that such arbitration agreements are unenforceable under the EFAA.
Can I Sue My Employer for Sexual Harassment Even If I Signed an Arbitration Agreement?
Yes. If your claim involves sexual harassment or sexual assault, you have the right to take your case to court instead of arbitration.
Do I Need a Lawyer to Fight a Forced Arbitration Clause?
While not required, having an experienced employment lawyer can help you challenge an invalid arbitration agreement and pursue your case in court.
Can My Entire Lawsuit Be Heard in Court If I Include a Sexual Harassment Claim?
Yes. If your lawsuit includes a sexual harassment claim, other claims (such as wage and hour violations) may also be exempt from arbitration and heard in court.
Does California Law Protect Me from Retaliation If I Report Sexual Harassment?
Yes. Under California’s Fair Employment and Housing Act (FEHA) and federal law, employers cannot retaliate against employees who report sexual harassment or file a lawsuit.
How Can an Employment Lawyer Help Me with My Sexual Harassment Case?
An experienced employment attorney can:
- Challenge an arbitration agreement if your employer tries to enforce one.
- File a lawsuit on your behalf to seek damages.
- Negotiate a settlement to compensate you for emotional distress, lost wages, and other damages.
- Ensure your employer follows California employment laws and does not retaliate against you.
Conclusion
The Casey ruling reinforces the protections provided by the EFAA and serves as an important reminder that California employees have the right to take their sexual harassment claims to court. This decision prevents employers from using arbitration agreements to shield themselves from accountability and ensures that employees can pursue justice in a fair and transparent legal forum.
If you believe you are being forced into arbitration for a sexual harassment claim, or if you need guidance on your rights in the workplace, consider speaking with an experienced employment lawyer to protect yourself and your legal rights.
Contact the Ruggles Law Firm at 916-758-8058 to Evaluate Your Potential Lawsuit
Matt Ruggles has a thorough understanding of California employment laws and decades of practical experience litigating employment law claims in California state and federal courts. Using all of his knowledge and experience, Matt and his team can quickly evaluate your potential claim and give you realistic advice on what you can expect if you sue your former employer.
Contact the Ruggles Law Firm at 916-758-8058 for a free, no obligation consultation.
Blog posts are not legal advice and are for information purposes only. Contact the Ruggles Law Firm for consideration of your individual circumstances.
