Summary
The Sixth Circuit addressed whether the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) applies to sexual harassment claims that accrued before the statute's enactment but were filed afterward. Interpreting the statute's application note, the court concluded that EFAA governs claims that accrue after March 3, 2022, as well as disputes that arise after that date. Consequently, the court reversed the district court's order compelling arbitration and remanded the case for further proceedings consistent with this interpretation.
Topics
Practice areas
Questions Presented
- Whether the parties entered a valid and enforceable agreement to arbitrate under Michigan contract law.
- Whether Memmer's statutory employment claims fell within the scope of the arbitration agreement.
- Whether the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act applies when the underlying claims accrued before March 3, 2022, but the parties' dispute may have arisen after that date.
- Whether the case should be remanded for the district court to determine when the parties' dispute arose and to address other unresolved EFAA issues in the first instance.
Holdings
- The parties entered a valid and enforceable agreement to arbitrate. UWM produced sufficient evidence of Memmer's acceptance, and Memmer's declaration expressing that she did not recall signing and did not understand the agreement did not create a genuine factual dispute or establish a contract defense.
- Memmer's Title VII, FLSA, ADA, ELCRA, and PWDCRA claims fell within the agreement's coverage of any discrimination or other statutory claims arising out of her employment.
- The EFAA applies when either the relevant claim accrues on or after March 3, 2022, or the parties' dispute, understood as a controversy between them, arises on or after March 3, 2022. The terms 'claim' and 'dispute' have distinct functions in the application note.
- The case must be remanded because the district court did not determine when the parties' dispute arose, and that fact-dependent issue must be addressed in the first instance by the district court.
Key quotations
“EFAA applies to claims that accrue after its date of enactment and to disputes, understood as controversies between the parties, that arise after that date.” (p. 2)
“Ultimately, when a dispute arises is a fact-dependent inquiry that can be determined in the context of each case.” (p. 9)
“To summarize, when a dispute arises, or when the relevant claim accrues on or after March 3, 2022, a plaintiff may elect to proceed in court notwithstanding a preexisting agreement to arbitrate.” (p. 15)
Factual background
Kassandra Memmer worked for United Wholesale Mortgage as a mortgage underwriter from September 30, 2019, through July 9, 2021. She alleged discrimination, including refusal to allow remote work during pregnancy and the COVID-19 pandemic, sexual harassment by a coworker, disability discrimination, retaliation, and wage-and-hour violations. She signed an employment agreement containing an arbitration provision covering discrimination and other statutory claims, filed an EEOC charge on April 26, 2022, and filed suit on April 19, 2023.
Procedural history
Memmer sued her former employer under federal and Michigan employment-discrimination, disability, wage-and-hour, and related statutes. The Eastern District of Michigan concluded that the parties entered a valid arbitration agreement, rejected the argument that her statutory claims were nonarbitrable, dismissed the complaint without prejudice, and did not address the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. The Sixth Circuit reversed and remanded for application of the correct interpretation of the EFAA.
Remand instructions
The district court must apply the Sixth Circuit's interpretation of the EFAA, determine when the parties' dispute arose, obtain a factual record if necessary, and address any other EFAA issues in the first instance.