Background
Dr. Ding Ding served as chief financial officer of Structure Therapeutics under an employment agreement requiring arbitration. After her termination, she initiated arbitration alleging national-origin discrimination and mistreatment tied to her status as a domestic-violence victim. Discovery later revealed evidence supporting a different theory: that workplace hostility and her removal were motivated by sex.
Ding withdrew from arbitration and sued in the Northern District of California. She invoked the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which allows a person alleging a covered dispute to invalidate a predispute arbitration agreement. Structure argued that Ding had already made an irrevocable election by starting arbitration.
The Court’s Holding
A divided Ninth Circuit affirmed the refusal to compel arbitration. The majority held that the EFAA provides a genuine choice once a sexual-harassment dispute exists and the claimant knows enough to make that choice. Ding’s earlier demand asserted different claims; the district court found no evidence that she knowingly withheld a plausible sex-harassment theory when she began arbitration. She therefore made the relevant EFAA election only when she filed in federal court after discovery exposed the sex-based evidence.
The panel also found Ding plausibly alleged a sex-based hostile work environment under California’s Fair Employment and Housing Act. That sufficed because the EFAA defines a covered sexual-harassment dispute by reference to applicable federal, tribal, or state law. The court did not require Ding to complete an arbitration chosen before she discovered the covered claim.
Judge Rawlinson dissented. She viewed the initial arbitration filing and substantial participation as an election that waived court litigation, drawing on cases holding that litigants can waive arbitration by substantially using a judicial forum. The majority rejected that symmetry on these facts and emphasized the statute’s remedial purpose and the timing of Ding’s knowledge.
Key Takeaways
- Starting arbitration does not necessarily waive EFAA rights for a sexual-harassment theory discovered later.
- The claimant’s knowledge when arbitration began is central; courts will examine whether a covered claim was deliberately withheld.
- A plausible California FEHA sexual-harassment claim can trigger the federal EFAA’s arbitration opt-out.
- Employers should expect arbitration discovery itself to reveal facts that permit a claimant to move the dispute into court.
- The divided decision signals continued disputes over what constitutes an EFAA election.
Why It Matters
The ruling materially changes strategy for California employment disputes. Employees are not always locked into arbitration merely because they filed there before learning facts that support sexual harassment, while employers cannot assume forum selection becomes permanent on day one.
Counsel should preserve evidence about when the claimant learned the facts underlying the covered claim. Pleading quality also matters: the court separately confirmed that the alleged conduct plausibly fit California hostile-work-environment law.
Read the full opinion (PDF) · Court docket