An employee who files an arbitration demand on claims unrelated to sexual harassment is not necessarily barred from later proceeding in court under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). In Ding v. Structure Therapeutics, Inc., the Ninth Circuit held that an employee who discovers a plausible sex-based harassment claim during arbitration may invoke the EFAA and proceed in court.

Dr. Ding, the company’s former Chief Financial Officer, filed a demand for arbitration with JAMS alleging discrimination, retaliation, and harassment based on national origin and her status as a victim of domestic violence. Discovery later uncovered evidence supporting a sex-based theory. That evidence included the Chief Executive Officer’s email describing an “ideal phenotype” for the CFO position using two men as examples, the board’s gender diversity objective in the search, and the CEO’s reliance on complaints from male bankers that Dr. Ding was “too aggressive” and “lectured” them. She withdrew from arbitration and sued under the Fair Employment and Housing Act for sex discrimination and a sex-based hostile work environment.

The Ninth Circuit affirmed the denial of the employer’s motion to compel arbitration. Section 402 of the EFAA applies “at the election of the person alleging conduct constituting a sexual harassment dispute.” Because Dr. Ding was not alleging conduct constituting a sexual harassment dispute when she filed her arbitration demand, that filing did not trigger an EFAA election. Her election occurred when she later filed suit asserting the newly discovered sex-based harassment claim.

The Ninth Circuit made clear, however, that EFAA rights remain subject to ordinary waiver principles. A plaintiff who knows the facts supporting a sexual harassment claim and intentionally delays asserting it, or chooses to arbitrate that claim, may waive the right to invoke the statute later. The waiver defense failed on this record because the district court found no evidence that Dr. Ding knew she had a plausible sex-based harassment claim when she initiated arbitration, and the Ninth Circuit found no clear error in that factual finding.

The court also held that a sex-based hostile work environment claim under the FEHA may qualify as a “sexual harassment dispute” under the EFAA even absent sexual advances or explicitly sexual conduct. Harassment because of sex need not be motivated by sexual desire. Drawing all reasonable inferences in Dr. Ding’s favor, including allegations stating that Dr. Ding had been sidelined in her job duties, had suffered gendered criticism for her assertiveness, had been treated poorly following domestic violence injuries, and the timing of termination shortly thereafter, plausibly stated that claim.

Because the EFAA invalidates a predispute arbitration agreement with respect to a “case” that relates to a sexual harassment dispute, the entire action will now proceed in court. Nevertheless, Ding does not allow a plaintiff to leave arbitration merely by later attaching a harassment label to an existing dispute. Rather, the court preserved ordinary waiver principles which might serve to bar such and maneuver, and assumed, without deciding, that the EFAA requires a plausibly pleaded sexual harassment claim.

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