Background
Alan Waddell alleged that while working for HCSG at a Missouri nursing and rehabilitation facility, his supervisor, Ronald East, repeatedly sexually assaulted and harassed him. Waddell reported the conduct and was later terminated, ostensibly for missing scheduled shifts. HCSG subsequently rehired him at a different facility after promising that he would not have to see or communicate with East. During the online rehiring process, Waddell executed a general mutual arbitration agreement.
Waddell alleged that HCSG later required him to attend a company lunch where East would be present and threatened to terminate him if he refused. Waddell resigned and sued for defamation, tortious interference, wrongful discharge in violation of public policy, and violation of the Kansas Risk Management Act. The circuit court compelled arbitration and stayed the claims, then denied reconsideration. Waddell sought extraordinary relief, and the Court of Appeals issued a preliminary writ of mandamus.
The Court’s Holding
The Court of Appeals made the writ permanent, holding that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 made the arbitration agreement unenforceable as to Waddell’s case. Although Waddell did not plead standalone sexual-assault or sexual-harassment causes of action, his claims related to alleged sexual assault and harassment and the employer’s response. The EFAA applies to a “case” relating to such a dispute, the court explained, rather than only to claims formally labeled as sexual assault or harassment; it therefore invalidated arbitration for the entire case.
The court also held that the agreement was a predispute arbitration agreement. At the time of Waddell’s rehire and execution of the agreement, the parties were not adverse: HCSG had offered reemployment with assurances that Waddell would not have to interact with East, and Waddell had accepted. The relevant dispute arose only afterward, when HCSG allegedly broke that promise and insisted that Waddell attend an event involving East. The court ordered the circuit court to vacate its order compelling arbitration and staying the claims, deny the motion to compel, and proceed with the lawsuit.
Key Takeaways
- The EFAA can apply when pleaded claims relate to alleged sexual assault or harassment even if the complaint does not assert a claim formally labeled as sexual assault or sexual harassment.
- When the EFAA applies, a predispute arbitration agreement is unenforceable as to the entire case, not merely the individual claims most directly tied to the alleged misconduct.
- A dispute does not arise merely because misconduct occurred or an employee reported it; the timing inquiry asks when the parties became adverse or registered opposing positions.
Why It Matters
The decision gives Missouri courts a practical framework for determining both the substantive reach and timing requirement of the EFAA. Employers cannot avoid the statute simply because an employee’s causes of action sound in retaliation, wrongful discharge, interference, or defamation when the case is grounded in alleged sexual assault or harassment.
The ruling also distinguishes a general arbitration agreement signed after alleged misconduct from a genuine postdispute agreement negotiated to resolve a known, existing controversy. The parties remain free to enter a new agreement specifically submitting the pending claims to arbitration or mediation.