The Ending Forced Arbitration for Sexual Assault and Sexual Harassment Act, or EFAA, permits plaintiffs to avoid arbitrating sex-based harassment claims even if a plaintiff only discovers that alleged misconduct was of a sexual nature via an arbitration proceeding, the 9th U.S. Circuit Court of Appeals held Thursday.
In a 2-1 decision, the court sided with the former chief financial officer for California-based Structure Therapeutics, a clinical drug development company. The plaintiff initially filed an arbitration demand over claims that her dismissal constituted discrimination on the basis of national origin and her status as a domestic violence victim. As discovery progressed over the course of a year, however, records emerged that the plaintiff put forth as evidence of sex-based discrimination.
A lawsuit followed, Ding v. Structure Therapeutics, Inc., in which the plaintiff argued that the EFAA invalidated her arbitration agreement with the company and rendered enforcement of the agreement invalid.
Structure moved to compel arbitration, arguing that plaintiffs may not elect to bring claims under the EFAA if they have first filed other claims in arbitration. The company also alleged that, even if a later-discovered sexual harassment claim could allow a plaintiff to proceed, the plaintiff had been aware of the relevant facts underlying that claim when she filed for arbitration and therefore waived her rights.
The majority of the 9th Circuit sided with the former CFO.
“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,” it said. “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 court noted that the plaintiff was not alleging sex-based harassment at the time of her arbitration filing and therefore could not have triggered an election under the EFAA. She did so only when she chose to pursue her harassment claims in a federal court. To hold otherwise, the majority continued, would deprive individuals who uncover such claims during discovery of their choice.
But the majority also held that its decision “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.” Plaintiffs can waive their EFAA rights under “ordinary waiver principles,” including where a court finds that they either unduly delay bringing an EFAA-covered claim through intentional acts or decide to pursue such claims in arbitration.
The 9th Circuit rejected Structure’s argument that the plaintiff waived her right to proceed in court due to her knowledge of the relevant underlying facts because a lower court had already found no evidence that the plaintiff had such knowledge. Finally, the court held that the plaintiff had plausibly pled a sex-based hostile work environment claim.
A lone judge issued a dissenting opinion, stating that the EFAA’s text did not entitle the plaintiff to pursue more than one election of whether to proceed with arbitration.
“We are analyzing the court's ruling, which we just received, and determining next steps,” a Structure spokesperson said in an email.
Congress passed the EFAA in 2022 following years of efforts from advocacy groups. The law invalidated arbitration agreements that prevent parties from filing lawsuits in court alleging sexual assault or sexual harassment. Since the law’s passage, federal courts have had to settle a range of questions regarding its applicability.
For example, the 8th Circuit issued a 2024 decision in favor of a Chipotle employee who brought her lawsuit against the company over allegations of sexual assault that occured prior to law’s effective date. The court clarified that the EFAA’s protections apply to the date that such claims are filed, rather than when the alleged conduct occurs.
Elsewhere, the 6th Circuit held in February that the law’s protections barring mandatory arbitration apply to a plaintiff’s entire case, not just those related to assault or harassment. And in late 2025, an Oregon federal judge determined that the EFAA can apply to plaintiffs who allege discrimination on the basis of their status as victims of sexual assault, even if the assault is not caused nor enabled by the employer.
But not all EFAA-related decisions have ended in plaintiffs’ favor. Earlier this month, a New York federal magistrate judge sided with Salesforce in an EFAA dispute, holding that a former employee did not plausibly allege conduct that was covered by the law. The plaintiff’s claim that she was treated less favorably than male colleagues and accused of false performance issues, among other allegations, did not amount to sexual assault or harassment, the judge held.
