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As employers know, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFAA”) was intended to do precisely what its name states – prevent the forced arbitration of claims for sexual assault and sexual harassment. 

As the courts have continued to address the EFAA, they have struggled with at least two separate issues: (1) whether the statute extends to claims of sex-based harassment rather than sexual harassment, and (2) whether other claims beyond sexual assault or harassment claims must still be arbitrated.

In other words, on the latter issue, do all claims remain in court, or do only the assault and harassment claims remain in court while the other claims proceed to arbitration?

Earlier this month, the U.S. Supreme Court had an opportunity to step in and answer that question in Liu v. Miniso Depot CA, Inc. 105 Cal. App.5th 791 (2024), a California Court of Appeal decision. 

The Supreme Court denied certiorari, leaving the courts to continue to struggle with this issue. 

Liu demonstrates not only how significant this issue is, but how important it will be for the Supreme Court to resolve the question at some point.

In Liu, the plaintiff began her employment for Miniso Depot as a Human Resources Administrator in 2021. She signed an offer letter that included an agreement to arbitrate any employment-related disputes through JAMS.

In October 2023, Liu filed a multi-claim lawsuit against Miniso Depot, including a sexual harassment claim. Also included in Liu’s complaint were various wage-hour claims, as well as claims for sex/sexual orientation/sexual identity discrimination, race discrimination, whistleblower retaliation and intentional infliction of emotional distress – claims that otherwise would appear to be subject to arbitration. 

Miniso Depot moved to compel the arbitration agreement.

In opposing Miniso Depot’s motion to compel, Liu argued that none of her claims were subject to the Federal Arbitration Act (“FAA”) because her complaint included sexual harassment claims. 

The trial court agreed, holding that otherwise arbitrable claims unrelated to the sexual harassment claims also were not subject to arbitration.

On appeal, the California Court of Appeal affirmed, concluding that the EFAA exempts a plaintiff’s entire case from arbitration when at least one sexual harassment claim subject to the Act is alleged. 

The Court of Appeal found that the EFAA’s language invalidating arbitration agreements “with respect to a case” relating to a sexual harassment dispute was not limited to discrete sexual assault or harassment claims. After considering the definitions of “case” and “claim,” and reviewing the use of the term “claim” in the Federal Rules of Civil Procedure, the Court of Appeal held that Congress deliberately used the word “case” rather than “claim” in drafting the EFAA. 

The California Supreme Court denied Miniso Depot’s petition for review on December 31, 2024. And, again, the U.S. Supreme Court denied certiorari on October 6, 2025.

While the Supreme Court’s denial of certiorari suggests that the courts will continue to struggle with this issue, perhaps with inconsistent results, the California Court of Appeal’s decision in Liu provides some helpful language for employers, at least in California. 

The Court of Appeal noted that the EFAA has been interpreted only to apply when sexual assault or harassment claims can survive the pleading stage. That provides employers with options when faced with deficient allegations of sexual assault or harassment. At the very least, it would seem to undermine any efforts by plaintiffs to escape arbitration of otherwise arbitrable claims simply by asserting baseless sexual assault or harassment claims. 

Not unimportantly, the Court of Appeal also expressed no opinion on the impact of the EFAA on claims asserted on behalf of a class, potentially preserving an employer’s ability to arbitrate collective/class action disputes despite allegations of sexual assault or harassment.

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