The 9th U.S. Circuit Court of Appeals has delivered a significant ruling reinforcing the scope of the Ending Forced Arbitration for Sexual Assault and Sexual Harassment Act (EFAA), establishing that plaintiffs can opt out of arbitration for sex-based harassment claims, even if they initially initiated arbitration with other allegations. This landmark decision, handed down in a 2-1 split, sides with a former chief financial officer (CFO) of Structure Therapeutics, a clinical drug development company, who sought to bring sex-based discrimination claims in federal court after discovering evidence of such misconduct during a year-long arbitration process concerning national origin and domestic violence victim status discrimination.
The case, Ding v. Structure Therapeutics, Inc., hinged on the interpretation of the EFAA, a law enacted in 2022 to empower individuals who have experienced sexual assault or sexual harassment by invalidating pre-dispute arbitration agreements that would force them into private arbitration rather than allowing them to pursue their claims in court. Structure Therapeutics had moved to compel arbitration, contending that the plaintiff’s initial filing of claims in arbitration precluded her from later electing to pursue sex-based claims in court under the EFAA. The company further argued that even if the EFAA allowed for such a shift, the plaintiff had waived her rights by being aware of the underlying facts of the alleged sexual misconduct when she first initiated arbitration.
Key Ruling: EFAA Protections Extend Beyond Initial Arbitration Filing
The majority opinion from the 9th Circuit firmly rejected Structure Therapeutics’ arguments. The court stated that "A plaintiff’s right under the EFAA to pursue her claims in court is not categorically foreclosed by the earlier filing of an arbitration demand with non-sexual harassment claims." The ruling emphasized the "plain text of the EFAA," which does not impose limitations on when a plaintiff can allege sexual harassment or exercise their rights under the act.
The appellate court reasoned that the plaintiff did not allege sex-based harassment at the time she filed her initial arbitration demand. Therefore, she could not have triggered an election under the EFAA at that stage. Her decision to pursue these claims in federal court, after the nature of the misconduct became apparent through discovery, was deemed a valid exercise of her EFAA rights. The majority cautioned that requiring individuals to forfeit their EFAA protections simply because they discover sex-based misconduct during the course of arbitration would effectively strip them of their chosen forum and undermine the intent of the law.
However, the court also clarified that this ruling does not grant plaintiffs carte blanche to indefinitely delay bringing EFAA-covered claims or to arbitrarily switch forums. The decision noted that EFAA rights can still be waived under "ordinary waiver principles." This includes situations where a court finds that a plaintiff has unduly delayed bringing a claim through intentional actions or has voluntarily decided to pursue such claims within an arbitration proceeding.
Factual Background and Discovery of Sex-Based Misconduct
The dispute originated when the former CFO of Structure Therapeutics initiated arbitration proceedings. Her initial claims focused on allegations that her termination constituted unlawful discrimination based on her national origin and her status as a victim of domestic violence. Over the course of approximately one year, as the arbitration process progressed and evidence was exchanged, documents emerged that the plaintiff presented as compelling evidence of sex-based discrimination and harassment. This pivotal discovery prompted her to file a lawsuit in federal court, asserting that the EFAA invalidated her arbitration agreement with Structure Therapeutics, rendering its enforcement invalid.
Structure Therapeutics’ motion to compel arbitration was based on two primary arguments: first, that the plaintiff’s act of filing other claims in arbitration disqualified her from later invoking the EFAA; and second, that she had prior knowledge of the facts underlying the sexual harassment claim and therefore had waived her right to litigate it in court. The lower court had previously found no evidence that the plaintiff possessed such knowledge, a finding that the 9th Circuit upheld.
Dissenting Opinion and Legal Nuances
A dissenting judge on the 9th Circuit panel, however, expressed a different interpretation of the EFAA’s text. The dissenting opinion argued that the law’s language did not grant the plaintiff the right to make more than one election regarding her choice of forum for arbitration-eligible claims. This divergence highlights the ongoing legal complexities surrounding the application of the EFAA and its interplay with existing arbitration agreements and procedural rules.
Structure Therapeutics’ Response and Next Steps
A spokesperson for Structure Therapeutics acknowledged the court’s ruling, stating in an email, "We are analyzing the court’s ruling, which we just received, and determining next steps." This indicates that the company is reviewing the decision and may consider further legal action, such as seeking a rehearing or an appeal to the Supreme Court.
The EFAA: A Landmark Law and Its Evolving Interpretation
The passage of the EFAA in 2022 by Congress marked a significant victory for advocacy groups and individuals seeking to hold employers accountable for sexual assault and sexual harassment without the barrier of mandatory arbitration. The law’s enactment followed years of public outcry and legislative efforts aimed at addressing the power imbalance often inherent in pre-dispute arbitration clauses, which can silence victims and shield perpetrators and their employers.
Since its inception, federal courts have been tasked with clarifying the EFAA’s application in a variety of contexts. These cases have grappled with fundamental questions regarding retroactivity, the scope of covered claims, and the circumstances under which plaintiffs can avail themselves of the law’s protections.
Precedent-Setting Decisions and Emerging Interpretations
The 9th Circuit’s decision in Ding v. Structure Therapeutics, Inc. adds another layer to the growing body of case law surrounding the EFAA. It aligns with a general trend of courts broadly interpreting the law to protect victims’ rights to access the judicial system.
For instance, the 8th U.S. Circuit Court of Appeals, in a 2024 ruling, sided with a Chipotle employee who alleged sexual assault. The court clarified that the EFAA’s protections apply to the date a claim is filed, not necessarily the date the alleged conduct occurred, thereby extending relief even for incidents that predated the law’s enactment.
Similarly, the 6th U.S. Circuit Court of Appeals held in February that the EFAA’s prohibition against mandatory arbitration extends to an entire case, not just the specific claims directly involving sexual assault or harassment. This interpretation ensures that related claims, such as retaliation or other forms of discrimination stemming from the original harassment, can also be pursued in court.
Further expanding the EFAA’s reach, an Oregon federal judge in late 2025 determined that the law can apply to plaintiffs who allege discrimination based on their status as victims of sexual assault, even if the assault itself was not caused or enabled by the employer. This ruling underscores the legislative intent to protect individuals from the consequences of sexual violence, regardless of the direct employer link to the assault.
Challenges and Setbacks in EFAA Litigation
Despite these favorable rulings, the application of the EFAA is not without its challenges. Not all legal challenges have resulted in victories for plaintiffs. Earlier this month, a New York federal magistrate judge ruled in favor of Salesforce in an EFAA dispute, determining that a former employee had not plausibly alleged conduct covered by the law. The judge found that claims of less favorable treatment compared to male colleagues and accusations of false performance issues did not rise to the level of sexual assault or harassment as defined by the EFAA. This decision highlights the critical importance of how plaintiffs frame their allegations and the specific nature of the misconduct described.
Broader Implications for the Workplace and Legal Landscape
The 9th Circuit’s ruling in Ding v. Structure Therapeutics, Inc. is likely to have significant implications for how employers and employees navigate workplace disputes involving allegations of sexual misconduct. It reinforces the idea that the EFAA provides a vital avenue for justice, particularly for individuals who may not immediately recognize the sex-based nature of the harassment they have experienced.
Key Implications:
- Enhanced Worker Protections: The decision strengthens the ability of individuals to bring sex-based harassment claims into the public court system, offering greater transparency and potentially more robust remedies than private arbitration.
- Discovery as a Catalyst: It validates the crucial role of the discovery process in uncovering evidence of misconduct. Employees who initiate legal proceedings for other reasons may now have a clearer path to pursue sex-based claims if such evidence emerges.
- Employer Strategy Reassessment: Companies may need to re-evaluate their arbitration agreements and internal dispute resolution processes, ensuring compliance with the EFAA and anticipating that sex-based claims may bypass mandatory arbitration.
- Legal Certainty: While nuances remain, the ruling contributes to greater legal certainty regarding the EFAA’s application, providing guidance for both plaintiffs and defendants in future cases.
The ongoing litigation surrounding the EFAA reflects a dynamic legal landscape where courts are actively shaping the boundaries and application of this critical consumer and worker protection law. As more cases proceed through the federal courts, a clearer understanding of the EFAA’s full impact on workplace dispute resolution will continue to emerge. The 9th Circuit’s decision is a significant step in ensuring that victims of sexual assault and sexual harassment have a fair opportunity to seek justice.
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