Sexual Harassment Claims Against Starbucks Must Be Arbitrated, Court Holds

In Walters v. Starbucks Corp. et al, 2022 WL 3684901 (S.D.N.Y. Aug. 25, 2022), the court held that the plaintiff’s sexual harassment claim was subject to mandatory arbitration.

The court explained:

Walters argues that federal law prohibits, rather than requires, the enforcement of the Arbitration Agreement. Under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, Pub. L. No. 117–90, 136 Stat. 26 (codified at 9 U.S.C. §§ 401, 402) (“EFASASHA”), a plaintiff “alleging conduct constituting a sexual harassment or a sexual assault dispute” may elect to render invalid and unenforceable an arbitration provision applicable to their case. 9 U.S.C. § 402(a).2 The applicability of this provision must be determined “by a court, rather than an arbitrator.” 9 U.S.C. § 402(b). EFASASHA only applies, however, to a “dispute or claim that arises or accrues on or after the date of enactment of this act.” EFASASHA § 3, 136 Stat. 28. EFASASHA was signed into law on March 3, 2022. Pub. L. 117–90.

Walters’s claims in this lawsuit are not covered by EFASASHA because each claim arose or accrued before March 3, 2022. Each of Walters’s claims accrued at the time she experienced discrimination, harassment, or retaliation, and at the latest by December of 2021, when she left her job.

The court further held that New York Civil Practice Law and Rules § 7515, which prohibits mandatory arbitration agreements for unlawful discrimination claims as a matter of New York State law, did not apply where, as here, the Federal Arbitration Act required enforcement of the parties’ arbitration agreement (and, therefore, CPLR 7515 was “inconsistent with federal law”).

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