EFAA covers claims that emerge during an arbitration proceeding, 9th Circuit says

The 9th U.S. Circuit Court of Appeals ruled that the Ending Forced Arbitration for Sexual Assault and Sexual Harassment Act (EFAA) allows a plaintiff to escape an arbitration agreement even when the sexual‑harassment claim emerges only after arbitration proceedings have begun. In a 2‑1 decision, the court sided with the former chief financial officer of Structure Therapeutics, a California‑based clinical drug‑development firm, who had originally filed an arbitration demand alleging discrimination based on national origin and domestic‑violence victim status. During a year‑long arbitration, discovery produced evidence that the plaintiff’s dismissal also involved sex‑based discrimination, prompting her to file a federal lawsuit, Ding v. Structure Therapeutics, Inc., asserting that the EFAA invalidated the arbitration clause. Structure argued that the plaintiff’s earlier arbitration filing barred her from invoking the EFAA and that she had known the relevant facts at the time, thereby waiving her rights. The majority rejected both arguments, holding that the plain text of the EFAA does not prevent a plaintiff from later asserting a sexual‑harassment claim and that the plaintiff could not have triggered an EFAA election when she first filed for arbitration because she was not yet alleging sex‑based misconduct.

The court’s opinion clarified that the EFAA’s protection is not automatically lost by the timing of an arbitration demand, but it is still subject to ordinary waiver principles. A plaintiff may forfeit the right to proceed in court if she unduly delays the claim, acts intentionally to sidestep the statute, or otherwise elects to keep the dispute in arbitration. The Ninth Circuit emphasized that the lower court had found no evidence the plaintiff possessed knowledge of the sexual‑harassment facts when she filed the arbitration demand, undermining Structure’s waiver theory. Moreover, the majority stressed that the decision does not create a blanket rule allowing any plaintiff to start arbitration, later add a sexual‑harassment claim, and then shift to court; each case will be evaluated on whether the plaintiff’s conduct amounts to a waiver under established principles. A lone dissenting judge warned that the EFAA’s language does not grant a plaintiff multiple elections regarding arbitration, suggesting a more restrictive reading of the statute.

The ruling joins a growing body of federal decisions interpreting the EFAA’s reach since Congress enacted the law in 2022. Recent appellate opinions have addressed when the law applies—such as the 8th Circuit’s 2024 decision that the EFAA protects claims filed after the law’s effective date regardless of when the alleged conduct occurred, and the 6th Circuit’s February ruling that the act bars mandatory arbitration for an entire case, not just the assault or harassment components. Lower‑court cases have also produced mixed outcomes: an Oregon judge in late 2025 extended EFAA coverage to victims of sexual assault discrimination even when the employer did not cause the assault, while a New York magistrate earlier this month denied a Salesforce employee’s EFAA claim, finding her allegations did not rise to sexual assault or harassment. Structure’s spokesperson indicated the company is reviewing the appellate ruling and determining next steps, underscoring that the decision will likely influence how employers draft arbitration agreements and how plaintiffs approach discovery‑driven claims under the EFAA.

⚡ Effects Interpreter