Court of Appeal holds EFAA preempts conflicting state arbitration law: Casey v. Superior Court (D.R. Horton Inc.)

In Casey v. Superior Court (D.R. Horton Inc.),           Cal.App.5th           (Feb. 5, 2025), the Court of Appeal (First Appellate District, Division One) held that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) preempts state law requiring arbitration of sexual assault and sexual harassment claims covered by the Act.

Read more

Plaintiff sued for sexual harassment after a coworker made repeated unwanted sexual remarks, causing her to take medical leave and resign from Defendant. The trial court granted Defendant’s motion to compel arbitration based on a choice-of-law provision in the parties’ agreement.

On appeal, the Court of Appeal reversed the order compelling arbitration. Finding a sufficient link to interstate commerce to bring the dispute within the EFAA’s scope (following Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232), the court held that the EFAA preempts conflicting state law under conflict preemption principles (following Keeton v. Tesla, Inc. (2024) 103 Cal.App.5th 26). The court rejected Defendant’s argument that selecting state law in an arbitration agreement effectively opts out of the Federal Arbitration Act (FAA) even in contracts involving interstate commerce. Because Plaintiff’s claims accrued after the EFAA’s enactment, retroactivity was not an issue. Finally, citing Liu v. Miniso Depot CA, Inc. (2024) 105 Cal.App.5th 791, 800 the court ruled that the EFAA rendered the parties’ arbitration agreement unenforceable as to all of Plaintiff’s claims.

Full opinion

Scroll to Top