Background
Dr. Ding Ding served as chief financial officer of Structure Therapeutics USA, Inc. Her employment agreement required arbitration of employment disputes. Ding alleged that CEO Dr. Raymond Stevens immediately sidelined her, diminished her responsibilities, adopted male bankers’ criticism that she was “too aggressive,” questioned her ability to remain CFO after she suffered domestic violence, and recommended her termination. Structure terminated her in March 2022.
Ding initially demanded JAMS arbitration, asserting discrimination, retaliation, and harassment based on national origin and her status as a domestic-violence victim. During discovery, she obtained evidence including Stevens’s email describing two men as examples of his ideal CFO “phenotype,” the board’s gender-diversity objective in recruiting her, and Stevens’s reliance on male bankers’ complaints. Ding withdrew from arbitration and sued in California court, adding sex-based claims. After removal, the district court concluded that she had properly elected to proceed in court under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 and denied the defendants’ motion to compel arbitration.
The Court’s Holding
The Ninth Circuit affirmed. It held that filing non-sexual-harassment claims in arbitration does not categorically foreclose a later EFAA election when the plaintiff discovers during arbitration a basis for a covered sexual-harassment claim. Because the district court found that Ding did not know her alleged workplace mistreatment was sex-based until discovery produced additional evidence, her initial arbitration demand was not an EFAA election. Nor had she waived her EFAA rights through the intentional relinquishment of a known right.
The court also held that Ding plausibly alleged a sex-based hostile-work-environment claim under California’s Fair Employment and Housing Act. Sexual harassment under California law can include nonsexual conduct that creates a hostile environment because of sex. Ding’s allegations of sustained sidelining, gendered criticism, belittling treatment after domestic violence, exclusion from meetings, and termination plausibly met that standard. Because the EFAA renders an arbitration agreement unenforceable with respect to the entire “case” relating to a sexual-harassment dispute, Ding could litigate all her claims in court. The panel did not decide whether her New York claims independently qualified under the EFAA.
Key Takeaways
- A plaintiff who discovers a plausible sexual-harassment claim while arbitrating other claims may invoke the EFAA and elect to proceed in court.
- An earlier arbitration demand does not waive EFAA rights unless ordinary waiver principles show an intentional relinquishment of a known right.
- A sex-based hostile work environment may constitute sexual harassment under California law even when the alleged conduct is not sexual in nature.
- Once the EFAA applies, the predispute arbitration agreement is unenforceable as to the entire related case, not merely the sexual-harassment claim.
Why It Matters
The decision clarifies that employees do not necessarily lose the EFAA’s protection by beginning arbitration before discovering facts supporting a sexual-harassment claim. Courts must examine when the employee learned of the potential claim and whether the employee knowingly relinquished the right to proceed in court.
Judge Rawlinson dissented, reasoning that Ding made a binding election by initiating arbitration and substantially litigating there for more than a year. The majority instead treated Ding’s federal-court filing as her first EFAA election because she was not yet alleging—and did not know she had—a sexual-harassment dispute when she initiated arbitration.