On October 24, 2024, the California Court of Appeal upheld a trial court’s ruling in Liu v. Miniso Depot CA, Inc., et al., affirming that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFAA”) exempts a plaintiff’s entire case from arbitration if the plaintiff includes at least one claim of sexual harassment covered by the Act. The court’s decision underscores the broad scope of the EFAA, which renders arbitration agreements unenforceable in cases involving sexual harassment disputes under both state and federal law.
The case involved plaintiff Yongtong Liu, who was employed by Miniso Depot as a human resources administrator. Liu alleged that during her employment, she was subjected to severe harassment and discrimination based on her sexual orientation and gender, including derogatory comments about her appearance and body. Additionally, Liu claimed that Miniso required her to participate in illegal practices regarding hiring, pay, and immigration. After resigning in June 2023, Liu filed a lawsuit in October 2023 against Miniso, asserting claims for wage violations, sexual harassment, discrimination under the Fair Employment and Housing Act (“FEHA”), retaliation, and emotional distress. Miniso sought to compel arbitration based on an agreement Liu signed upon hiring, but Liu opposed the motion, arguing that the EFAA exempted her entire case from arbitration because it included sexual harassment claims.
The trial court sided with Liu, ruling that once a plaintiff asserts a sexual harassment claim subject to the EFAA, the arbitration agreement cannot be enforced for the entire case. Miniso appealed, arguing that the trial court erred by applying the EFAA to the entirety of Liu’s claims. Miniso contended that only the sexual harassment claims should be exempt from arbitration, and the rest of the claims should proceed in arbitration. However, the California Court of Appeal disagreed, affirming the trial court’s decision. The Court held that under the clear language of the EFAA, if a lawsuit includes any claim that falls under its scope, the arbitration agreement is unenforceable for all claims, not just the sexual harassment allegations.
The Court’s ruling aligns with the legislative intent behind the EFAA and provides clarity on how arbitration agreements should be handled in cases involving sexual harassment. By choosing the term “case” instead of “claim,” the EFAA allows plaintiffs to be exempt from forced arbitration for all claims in their lawsuit, as long as one claim is sexual harassment-related. This decision also prevents the inefficiency of having related claims litigated in separate forums, a point emphasized by the Court in its ruling. Other recent cases, such as Doe v. Second Street Corp. (2024) and federal decisions in Johnson v. Everyrealm, Inc. (2023) and Turner v. Tesla, Inc. (2023), have reached similar conclusions, further cementing the interpretation that the EFAA applies to the entire case when a sexual harassment claim is involved.