The 9th U.S. Circuit Court of Appeals has issued a pivotal ruling, clarifying that the Ending Forced Arbitration for Sexual Assault and Sexual Harassment Act (EFAA) permits plaintiffs to bypass mandatory arbitration for sex-based harassment claims, even if the sexual nature of the alleged misconduct is only uncovered during an existing arbitration proceeding. This 2-1 decision, handed down on Thursday, November 28, 2024, marks a significant interpretation of a landmark piece of legislation designed to empower victims of sexual assault and harassment by allowing them to pursue their claims in court rather than through often-confidential and company-favored arbitration systems. The ruling emphasizes that a plaintiff’s right to judicial recourse under the EFAA is not automatically forfeited simply because other, non-sexual harassment claims were initially filed in arbitration, nor is it constrained by a strict timeline for alleging such claims.
Unpacking the Ding v. Structure Therapeutics Decision
The case, Ding v. Structure Therapeutics, Inc., centers on the experience of a former chief financial officer (CFO) for Structure Therapeutics, a California-based clinical drug development company. The plaintiff initially initiated an arbitration demand, asserting claims of discrimination based on her national origin and her status as a domestic violence victim. This initial filing did not include any allegations of sex-based harassment. However, as the discovery phase of the arbitration progressed over the course of a year, new evidence and records emerged that, according to the plaintiff, pointed to clear instances of sex-based discrimination and harassment.
Upon discovering this new evidence, the plaintiff filed a lawsuit in federal court, arguing that the EFAA rendered her pre-existing arbitration agreement with Structure Therapeutics invalid and unenforceable with respect to these newly identified sex-based claims. Structure Therapeutics, in response, moved to compel arbitration, presenting two primary arguments. First, the company contended that plaintiffs should not be allowed to invoke the EFAA if they had already initiated other claims in arbitration, suggesting a "one-and-done" election principle. Second, Structure Therapeutics argued that even if a later-discovered sexual harassment claim could potentially allow a plaintiff to proceed in court, the plaintiff in this specific case had been aware of the underlying facts related to the sexual harassment claim when she first filed for arbitration, and therefore, had effectively waived her rights under the EFAA.
The majority of the 9th Circuit Court of Appeals rejected Structure Therapeutics’ arguments. In its ruling, the court explicitly stated, "A plaintiff’s right under the EFAA to pursue her claims in court is not categorically foreclosed by the earlier filing of an arbitration demand with non-sexual harassment claims." The court underscored that "The plain text of the EFAA does not limit when a plaintiff may allege a sexual harassment claim or exercise her rights under the EFAA." The majority reasoned that at the time of her initial arbitration filing, the plaintiff was not alleging sex-based harassment and thus could not have triggered an election under the EFAA. Her decision to pursue harassment claims in federal court only occurred once the relevant evidence surfaced during discovery. To rule otherwise, the court concluded, would unfairly deprive individuals who uncover such claims during the discovery process of their statutory choice to bypass arbitration.
However, the majority also introduced an important caveat, clarifying that its decision does not create an open-ended right for plaintiffs to endlessly switch between forums. "This does not mean that a plaintiff may start in arbitration, bring a sexual harassment claim at any time, under any circumstances, and then pursue her claims in court," the court noted. Plaintiffs can still waive their EFAA rights under "ordinary waiver principles," such as when a court determines they have unduly delayed bringing an EFAA-covered claim through intentional acts or have explicitly chosen to pursue such claims within the arbitration framework. In the Ding case, the 9th Circuit also dismissed Structure Therapeutics’ argument regarding the plaintiff’s alleged prior knowledge of the facts, citing a lower court’s finding of no evidence supporting such awareness. Furthermore, the appellate court affirmed that the plaintiff had plausibly pled a sex-based hostile work environment claim, clearing the path for her case to proceed.
A dissenting opinion was filed by one judge, who argued that the EFAA’s text did not support the interpretation that a plaintiff could make more than one election regarding whether to proceed with arbitration or litigation. This dissent highlights the ongoing legal debates and differing interpretations of the EFAA’s scope and intent.
The Genesis of the EFAA: A Legislative Landmark
The Ending Forced Arbitration for Sexual Assault and Sexual Harassment Act (EFAA), signed into law by President Joe Biden in March 2022, represents a monumental shift in how workplace sexual misconduct claims are handled in the United States. Its passage followed years of fervent advocacy by victim rights groups, labor unions, and legal professionals, culminating in bipartisan support in Congress. The EFAA effectively invalidates pre-dispute arbitration agreements and class-action waivers in cases involving claims of sexual assault and sexual harassment, giving survivors the choice to pursue their claims in a court of law, regardless of any prior agreement to arbitrate.
Before the EFAA, it was common practice for employers to include mandatory arbitration clauses in employment contracts. These clauses often required employees to waive their right to sue in court and instead resolve disputes, including serious allegations of sexual harassment or assault, through private arbitration. Critics argued that forced arbitration created a system heavily skewed in favor of employers. Arbitration proceedings are typically confidential, limiting public scrutiny and preventing patterns of misconduct from coming to light. This secrecy often protected perpetrators and enabled a culture of silence, hindering accountability and systemic change. Furthermore, arbitrators are often selected from a pool approved by the company, raising concerns about impartiality. The financial burden of arbitration fees could also be prohibitive for individual plaintiffs.
The #MeToo movement, which gained significant traction in 2017, played a crucial role in raising public awareness about the pervasive nature of sexual harassment and assault in workplaces across various industries. The movement brought to light numerous instances where forced arbitration clauses had silenced victims and allowed powerful individuals and companies to evade public accountability. High-profile cases, coupled with compelling testimonies from survivors, fueled the legislative push for the EFAA. Advocates argued that providing victims with the choice of a public forum—a court of law—would not only offer greater transparency and accountability but also empower survivors to seek justice on their own terms, free from the constraints of private, often opaque, arbitration.
The Broader Landscape of Forced Arbitration and its Impact
Forced arbitration has been a contentious issue in American employment law for decades. Its proponents argue that arbitration offers a faster, less expensive, and more efficient alternative to traditional litigation, benefiting both employers and employees by avoiding lengthy court battles. However, extensive research and numerous studies have consistently highlighted the disadvantages for employees, particularly in cases involving discrimination, harassment, and wage theft.
A 2015 study by the Economic Policy Institute (EPI) estimated that over half of non-union private-sector employees in the U.S. (53.9%) were subject to mandatory arbitration clauses in 2018, a significant increase from 24.1% in 1992. For larger firms, the prevalence was even higher, with 65.1% of employees in workplaces with 1,000 or more employees being subject to mandatory arbitration. The EPI also found that these clauses disproportionately affected women and racial minorities, groups often more vulnerable to workplace discrimination and harassment.
The impact of forced arbitration extends beyond simply changing the venue of a dispute. Data from the Equal Employment Opportunity Commission (EEOC) consistently shows a high volume of sexual harassment charges filed annually. For instance, in fiscal year 2023, the EEOC received 7,929 charges of sexual harassment. Prior to the EFAA, a significant portion of these claims would have been shunted into arbitration, where outcomes are generally confidential and the public cannot access details of the proceedings or the remedies awarded. The EFAA aims to change this, allowing these sensitive and often emotionally scarring cases to be heard in open court, fostering public discourse and potentially contributing to a more transparent understanding of workplace misconduct.
Navigating the EFAA: Precedent and Interpretation
Since its enactment, federal courts across the country have been tasked with interpreting and applying the EFAA to a variety of factual scenarios, leading to a developing body of jurisprudence. The 9th Circuit’s ruling in Ding v. Structure Therapeutics, Inc. is the latest in a series of decisions that collectively clarify the scope and limitations of this critical law.
- Retroactive Application (8th Circuit): In a 2024 decision, the 8th Circuit Court of Appeals sided with a Chipotle employee, holding that the EFAA’s protections apply to claims filed after the law’s effective date, even if the alleged sexual assault occurred before the EFAA was enacted. This ruling in favor of the plaintiff clarified that the EFAA’s applicability hinges on the date the claim is filed, not the date of the alleged conduct, significantly broadening its reach to cover past incidents that had not yet entered the legal system.
- Case-Wide Protection (6th Circuit): In February, the 6th Circuit Court of Appeals ruled that the EFAA’s bar against mandatory arbitration applies to a plaintiff’s entire case, not just the specific claims related to sexual assault or harassment. This means if a complaint includes both EFAA-covered claims and other related claims (e.g., retaliation, other forms of discrimination), the entire case can proceed in court, preventing employers from carving out non-EFAA claims for arbitration. This decision prevents a "splitting" of claims that could complicate litigation and potentially disadvantage plaintiffs.
- Victim Status Discrimination (Oregon Federal Court): In late 2025, an Oregon federal judge determined that the EFAA can apply to plaintiffs who allege discrimination based on their status as victims of sexual assault, even if the assault itself was not caused or enabled by the employer. This interpretation expands the EFAA’s protective umbrella to cover situations where an employer might discriminate against an employee because they are a survivor of sexual assault, regardless of whether the workplace was the site of the assault.
- Defining "Sexual Harassment" (New York Federal Court): However, not all EFAA-related decisions have favored plaintiffs. Earlier this month, a New York federal magistrate judge sided with Salesforce in an EFAA dispute. The judge held that a former employee’s claims of gender-based discrimination—such as being treated less favorably than male colleagues and being accused of false performance issues—did not plausibly amount to sexual assault or harassment as defined by the EFAA. This ruling underscores that while the EFAA broadens access to courts, it still requires plaintiffs to meet the legal threshold for "sexual assault" or "sexual harassment" to invoke its protections, preventing its misapplication to general gender discrimination claims.
The 9th Circuit’s Ding decision adds another crucial layer to this evolving legal landscape, specifically addressing the timing and discovery of sexual harassment claims within an ongoing dispute. It acknowledges the dynamic nature of litigation and discovery, recognizing that not all facts are known at the outset of a legal process.
Implications for Employees and Employers
The 9th Circuit’s decision carries significant implications for both employees and employers.
For employees and survivors of sexual harassment, this ruling provides enhanced flexibility and protection. It reassures individuals that they are not locked into an arbitration process if evidence of sexual harassment emerges unexpectedly during discovery. This could encourage more individuals to come forward, knowing they have a clear path to court, even if their initial claims were framed differently. The decision empowers plaintiffs to adapt their legal strategy as new information comes to light, without fearing immediate forfeiture of their EFAA rights. This can be particularly impactful in cases where victims may initially be hesitant to label experiences as "sexual harassment" or where the full scope of misconduct is not immediately apparent.
For employers, the decision necessitates a careful review of their arbitration agreements and dispute resolution policies. Companies can no longer assume that an initial arbitration filing for non-sexual harassment claims will preclude a plaintiff from later invoking the EFAA for related sexual harassment allegations. This could potentially lead to an increase in cases shifting from arbitration to public courts, particularly in situations where employers resist comprehensive discovery in arbitration, inadvertently revealing evidence that triggers EFAA protections. The ruling reinforces the need for employers to thoroughly investigate all workplace complaints, regardless of their initial categorization, and to be prepared for the possibility that disputes may ultimately proceed in public forums. It also highlights the importance of fostering workplace environments where employees feel safe reporting all forms of harassment from the outset, potentially reducing the likelihood of such claims emerging later in discovery.
Legal Analysis and Future Outlook
The 9th Circuit’s ruling is grounded in the principle of statutory interpretation, focusing on the "plain text" of the EFAA. By emphasizing that the law does not limit when a plaintiff may allege a sexual harassment claim, the court underscores Congress’s intent to prioritize victim choice over rigid procedural constraints. The carve-out for "ordinary waiver principles" provides a necessary safeguard against potential abuse of the system, preventing plaintiffs from intentionally delaying claims or using the EFAA as a tactical maneuver without legitimate grounds. However, the high bar for proving such waiver—requiring intentional acts or an explicit choice to pursue EFAA-covered claims in arbitration—ensures that the default remains in favor of the plaintiff’s right to judicial recourse.
This decision from a prominent circuit court will likely influence how district courts within the 9th Circuit (which includes California, a state known for its progressive employment laws) handle similar EFAA disputes. It may also serve as persuasive authority for other circuit courts grappling with similar interpretative questions, further solidifying the EFAA’s broad application.
The ongoing judicial interpretation of the EFAA reflects the complex realities of workplace misconduct and the legal mechanisms designed to address it. As more cases test the boundaries of the EFAA, courts will continue to refine its application, offering clearer guidance to employees and employers alike. The overall trend, as demonstrated by the majority of these circuit court decisions, leans towards a broad interpretation that favors victims’ access to justice and transparency, aligning with the spirit of the EFAA. The legal landscape for workplace sexual harassment and assault claims is undeniably shifting, moving away from the shadows of forced arbitration and towards greater public accountability and judicial oversight.
A spokesperson for Structure Therapeutics, when contacted, stated, "We are analyzing the court’s ruling, which we just received, and determining next steps." This indicates that the company may consider further legal avenues, such as seeking an en banc review by the full 9th Circuit or potentially appealing to the U.S. Supreme Court, although such steps are often challenging and reserved for cases with significant legal splits among circuits. Nevertheless, for now, the path forward for plaintiffs in the 9th Circuit who uncover sexual harassment claims during discovery appears clearer and more aligned with the overarching goals of the EFAA.
