Dive Brief:

• Chipotle can’t force a sexual assault claim into arbitration, the 8th U.S. Circuit Court of Appeals held Monday. The ruling upheld a Minnesota district court’s decision to deny Chipotle a motion to compel arbitration in the case of an employee who alleged she was sexually assaulted by a co-worker (Famuyide v. Chipotle Mexican Grill, Inc.). 
• The employee who brought the case filed her lawsuit on April 20, 2023, alleging sexual assault, among other claims. Chipotle attempted to move the case to arbitration because the events occurred before the Ending Forced Arbitration and Sexual Harassment Act’s effective date, but the court ruled in the worker’s favor, tying the dispute to the date of the worker’s first legal claim in July 2022.
• The case represents an application of the relatively new law, which was passed in 2021 and took effect March 3, 2022.

Dive Insight:

Because the act states that it “shall apply with respect to any dispute or claim that arises or accrues on or after the date of enactment,” referring to March 3, 2022, the case hinged on whether the worker’s dispute with Chipotle occurred before or after this date.

In its motion to compel arbitration, Chipotle argued that the dispute dates to “when the underlying conduct occurred,” or November 2021, when the worker alleged a co-worker sexually assaulted her in a workplace restroom.

The appeals court disagreed. “At that point … [the plaintiff] had not asserted any right, claim, or demand against Chipotle, and Chipotle had not registered disagreement with any position of [the plaintiff’s],” the 8th Circuit found. “There was no conflict or controversy between company and employee as of November 23, 2021, and no ‘dispute’ between the parties that could have been submitted to arbitration at that time.”

Chipotle also argued that the dispute could have arisen February 2022, when the worker’s counsel submitted letters informing the company it was investigating claims, asking that it preserve relevant information and provide a copy of the worker’s personnel file, and asking if Chipotle was interested in discussing a potential out-of-court resolution.

Similarly, however, the court found “this sort of exploratory letter from counsel does not establish a dispute or inevitably lead to one.”

The company finally asked to rely on a March 1, 2022, letter from the worker’s counsel, but the court denied this piece of evidence as it was not submitted for the district court’s consideration.

The 8th Circuit found that the dispute arose July 26, 2022, when the worker first filed a complaint in Minnesota state court; she voluntarily dismissed that filing and participated in an unsuccessful mediation before filing the federal action in April 2023. 

The case adds to a growing set of interpretations of the Ending Forced Arbitration for Sexual Assault and Sexual Harassment Act. In a June 2023 blog post, law firm Squire Patton Boggs explored some other early interpretations, including how the courts should approach cases involving multiple types of claims (both arbitrable and nonarbitrable) and how courts should approach cases involving “implausible” sexual harassment or sexual assault claims.

In a statement to HR Dive, Gretchen Carlson and Julie Roginsky, co-founders of Lift Our Voices and advocates who helped work for the passage of the Ending Forced Arbitration for Sexual Assault and Sexual Harassment Act, welcomed the 8th Circuit’s decision.

“The law we fought so tirelessly to pass is clear that survivors of sexual misconduct are free to speak about their experiences, and we are thrilled that the 8th Circuit agrees,” they said. “The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act has allowed survivors to have a voice, and no corporation should be allowed to diminish these protections to cover up their toxic workplace culture.”

Chipotle did not respond to a request for comment by press time.