On November 17, 2025, the Southern District of New York held in Mera v. SA Hospitality Group, LLC, et al., 23 civ. 3492 (PGG)(SDA) (see HERE) that if the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”) applies and is invoked, the parties’ pre-dispute arbitration agreement is unenforceable as to the entire case – and not just plaintiff’s sexual harassment claims. Practically, this means that all the claims in the case, including any wage and hour claims, will not be arbitrated. As the Court discusses, this holding follows a trend in the Southern District of New York and elsewhere where many courts have rendered arbitration agreements unenforceable as to the entire case if the EFAA applies.
Background
Plaintiff Danilo Mera (“Plaintiff”) worked as a busser at Defendant Café Focaccia, a restaurant owned by Defendant SA Hospitality Group (collectively “Defendants”), from May 2022 to February 2023. When he began working, Plaintiff and Café Focaccia entered an agreement containing a mandatory arbitration provision. Plaintiff alleges that Defendants did not pay tipped workers in compliance with the statutory tip credit, and they were not paid required minimum wage and overtime compensation. For example, Plaintiff alleges that he spent more than 20% of his workweek performing non-tip producing duties and was not paid the full minimum wage for this time, and he was not paid for hours worked outside of his scheduled shifts. In addition, Plaintiff alleges that that he was subject to harassment and abuse due to his sexual orientation; his co-workers called him homophobic slurs and he was physically harassed by a manager. Plaintiff complained but was told to “go back to work” and not be “too dramatic.” He requested a transfer to another restaurant which was denied and eventually quit. Subsequently, Plaintiff filed this action alleging collective and class claims in violation of the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”) and individual claims based on a hostile work environment due to his sexual orientation in violation of the New York State Human Rights Law (“NYSHRL”) and the New York City Human Rights Law (“NYCHRL”).
Defendants moved to compel arbitration as to all of Plaintiff’s claims. The Magistrate Judge granted Defendants’ motion as to the wage claims under the FLSA and NYLL and denied the motion as to the hostile work environment claims under the NYSHRL and NYCHRL. The Magistrate Judge explained that under the EFAA, an arbitration agreement is unenforceable “only with respect to the claims in the case that relate to the sexual harassment dispute.” Because Plaintiff’s wage claims do not relate to the sexual harassment dispute, they must be arbitrated. Plaintiff appealed the portion of the Magistrate Judge’s order concerning his wage claims.
District Court’s Analysis
The District Court examined the issue of whether the EFAA invalidates arbitration agreements as to all of Plaintiff’s claims or only as to the sexual harassment claims. The Court reviewed the statutory text of the EFAA, a federal law that amended the Federal Arbitration Act, and found that the text provides a “clear answer.” The EFAA states that “no predispute arbitration agreement. . . shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.” 9 U.S.C. § 402(a). The word “case” means the “legal proceeding as . . . [a] whole.” The Court then discussed several other Southern District of New York cases and found that most courts examining the issue held that where the EFAA applies, the arbitration agreement is unenforceable as to plaintiff’s entire case and not just the sexual harassment claims. In a footnote, the Court cited district courts outside of New York and noted that these courts share the same holding. Clearly, these case citations show a trend – certainly in New York and in other jurisdictions as well – that where the EFAA applies, arbitration agreements are unenforceable as to the entire case. Based on this analysis, the Court denied Defendants’ motion to compel arbitration in its entirety.
Key Takeaways
This case is significant for employers because it indicates a trend in New York and elsewhere in the country as to how to approach cases involving arbitration agreements and the EFAA. Employers should be aware that if the EFAA is invoked and applies, the arbitration agreement is unenforceable as to all the claims in a case and not just the sexual harassment claims. Thus, all the claims in a case, including wage and hour claims, must be litigated. Employers should consider this case and the trend it represents when developing their litigation strategy.
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