The Federal Arbitration Act Takes the Bite Out of the Empire State’s Sexual Harassment Law
This just in: Employers in New York State can still compel arbitration of sexual harassment claims under certain circumstances. This is great news for employers.
In Latif v. Morgan Stanley Co. LLC, a case out of the Southern District of New York, male Plaintiff Latif signed a written offer of employment with Morgan Stanley in June 2017. The offer letter incorporated by reference Morgan Stanley’s CARE Arbitration Program Agreement. The Arbitration Agreement provided any covered claim that arose over Latif’s employment with Morgan Stanley would be resolved by final and binding arbitration. It went on to state the agreement was governed and interpreted in accordance with the Federal Arbitration Act (“FAA”).
Shortly after his employment began, Latif complained to human resources that he was sexually assaulted by his female supervisor. After multiple meetings and e-mail exchanges with him, Latif was terminated in August 2018. He brought suit alleging sex discrimination and hostile work environment claims under both New York State and Federal law in federal court.
Morgan Stanley filed a motion to compel Latif to arbitrate his claims rather than proceed in court based on the language of his offer letter. Latif opposed the motion arguing New York State recently passed a law banning arbitration for sexual harassment claims.
The Judge held Latif’s claims are subject to arbitration. In reaching this decision, the Court noted the Federal Arbitration Act (“FAA”) favors arbitration. State law is preempted to the extent it impedes such arbitrations. Therefore, Latif must arbitrate his sexual harassment claims. This means an arbitrator rather than a judge or jury will decide if he wins or loses. For employers this is good news – historically, arbitration is faster and less expensive than federal litigation.
Brody and Associates regularly advises its clients on matters involving arbitration and other areas of alternative dispute resolution. If we can be of assistance in this area, please contact us at firstname.lastname@example.org or 203.4540560.