Employee Doesn’t Have to Cite EFAA to Avoid Arbitration

A California appellate court held that an explicit reference to the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) is not required to invoke the statute in a case involving claims of sexual harassment.

In 2012, Securitas Security Systems hired Francisco Quilala as a security employee. He was assigned to work at Oracle Park, where he was allegedly subjected to hostile and derogatory conduct by supervisors and coworkers based on his perceived sexual orientation, including intrusive questioning, mocking and reduction of his work hours.

After he formally complained, Quilala was terminated and sued Securitas and two employees. He alleged 22 causes of action including “sex, gender” and “sexual orientation harassment” under the Fair Employment and Housing Act.

The defendants moved to compel arbitration pursuant to an arbitration agreement Quilala signed as part of his onboarding. The agreement provided that any employment-related disputes would be governed by the Federal Arbitration Act (FAA).

Quilala objected, taking the position that the court needed to determine the agreement’s validity and enforceability, although he did not specifically raise the EFAA.

The trial court issued a tentative order denying the motion to compel arbitration based on the EFAA and held a hearing on the issue, allowing both sides to argue before adopting its tentative ruling.

The defendants appealed, but the court affirmed.

While the U.S. Supreme Court has held that doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, Congress enacted the EFAA as a “narrow but significant exception to that general rule,” the court said.

“The legislative history underscores Congress’s intent to restore access to the courts for victims of sexual harassment and assault,” the court wrote. “The House Judiciary Committee explained that, over time, ‘forced arbitration clauses have become virtually ubiquitous,’ often buried in employment contracts, and that such clauses have deprived ‘millions of Americans of their day in court.’”

Although the FAA reflects a strong federal policy favoring arbitration, “the EFAA creates a targeted exception to that policy where allegations of sexual harassment are at issue, reflecting Congress’s determination that such claims warrant resolution through the public court system rather than through private arbitration,” the court added.

The EFAA expressly provides that its applicability “shall be determined by a court, rather than an arbitrator,” and the trial court acted according to its obligation when raising the EFAA as a bar to arbitration in its tentative opinion. The defendants received an adequate opportunity to address the EFAA argument at the hearing before the trial court issued its final decision.

Further, Quilala alleged valid sexual harassment claims, triggering application of the EFAA, the court found.

“He asserts supervisors and coworkers questioned his sexual identity, a manager asked if he ‘suck[ed]’ certain individuals, and that same manager mocked him by saying Quilala’s perceived sexual orientation was ‘so embarrassing,’” the court said.

Once the court determined the EFAA applied, the question remained whether Quilala “elected” to pursue his claims in court.

“[W]e find the EFAA does not require an express invocation, and a plaintiff may elect to exercise the right to proceed in court by conduct that clearly indicates he or she wishes to do so,” the court wrote. “Holding otherwise would run counter to Congress’s intent in enacting the EFAA.”

The EFAA does not define “election,” but an election is commonly understood to mean a choice, the court said.

“Quilala opted to proceed in court by filing a complaint in the superior court and opposing defendants’ motion to compel arbitration,” the court explained. “That conduct was sufficient to constitute an ‘election’ under the statute. Nothing in the text, legislative history, or purpose of the EFAA demands more, and no conduct by Quilala evinces an intent to proceed via arbitration.”

Further, the statute’s plain language makes clear that the EFAA’s exemption from the FAA applies to the case, not individual claims, where a plaintiff alleges conduct constituting sexual harassment or sexual assault, removing the rest of Quilala’s claims from arbitration. Every published California decision on this issue has reached the same outcome, the court pointed out, as well as federal authorities.

As all of Quilala’s claims stemmed from the same employment relationship and his treatment by defendants, his entire case fell within the EFAA, the court said, affirming the denial of the defendants’ motion to compel arbitration. 

To read the opinion in Quilala v. Securitas Security Services USA, Inc., click .

Why it matters: The California appellate court was clear: a plaintiff does not need to explicitly cite the EFAA to fall under its protections, and filing a lawsuit demonstrates an election under the statute to avoid an arbitration agreement with an employer.