Bloomberg Law
"A federal appeals court’s rejection of Chipotle Mexican Grill Inc.'s attempt to force a former worker’s sexual harassment and assault claims into arbitration under a landmark 2022 law because of timing sets the stage for more showdowns as judges further assess the statute’s reach.
A three-judge panel of the US Court of Appeals for the Eighth Circuit ruled Aug. 5 that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act covers the former worker’s workplace assault claim against the restaurant chain—even though the alleged misconduct occurred before the law took effect.
The Eighth Circuit has become the first federal appeals court to consider if a worker’s sexual harassment lawsuit, filed after law’s enactment, can bypass arbitration under the EFAA.
The decision in the worker’s favor could open the door to more new lawsuits regarding alleged workplace sexual harassment and assault that took place prior to the EFAA’s March 3, 2022 effective date, employment law attorneys told Bloomberg Law.
They said the Eighth Circuit ruling, affirming a lower court’s decision, could be used to persuade judges outside that circuit to embrace the panel’s interpretation of the statute’s applicability to “any dispute or claim that arises or accrues on or after the date of enactment of this act” —a line that contains terms undefined in the statute.
“Plaintiff counsel will cite this as precedent in future cases. I have no doubt,” said Michael Palmer, New York managing partner at Sanford Heisler Sharp LLP. “This is a fair and reasonable interpretation of what is a rather ambiguous provision in the law.”
In holding that the ex-worker’s claim actually arose for EFAA purposes when she served the legal complaint, initially filed in Minnesota state court, the panel rejected the argument that the start date for the claim should have been at the time of misconduct or when her lawyer informed Chipotle in February 2022 letters that she was considering suing.
“Congress could have said a dispute arises for purposes of this Act when the underlying facts actually occur. It left it ambiguous, so the court looked at the definition of ‘dispute’ as defined by Black’s Law Dictionary,” Palmer said.
While the ruling provides fodder to some workers to keep such cases outside of arbitration, court rulings “will ultimately vary” based on the facts presented, said Anne-Marie Welch of Clark Hill PLC."
This article was originally posted on Bloomberg Law.
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