OPINION & ORDER This case calls upon the Court to apply the recently enacted Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “EFAA”), Pub. L. No. 117-90, 135 Stat. 26, codified at 9 U.S.C. §§401-02, which amended the Federal Arbitration Act (“FAA”), and which President Biden signed into law on March 3, 2022. As pertinent here, the EFAA defines a “sexual harassment dispute” as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” 9 U.S.C. §404(4). At the election of a person alleging “conduct constituting a sexual harassment dispute,” the EFAA makes pre-dispute arbitration agreements unenforceable “with respect to a case which is filed under Federal, Tribal, or State law and relates to…the sexual harassment dispute.” Id. §402(a). Plaintiff Teyo Johnson is a former employee of digital real estate company Everyrealm, Inc. (“Everyrealm”). As a condition of employment, Johnson entered into an agreement with Everyrealm containing a broad mandatory arbitration provision. Johnson now sues Everyrealm and several officers: Janine Yorio, Julia Schwartz, and William Kerr (collectively, “Everyrealm” or “defendants”). The claims in Johnson’s First Amended Complaint (“FAC”), Dkt. 29, include, against all defendants but Kerr: (1) race discrimination, in violation of 42 U.S.C. §1981; and, against all defendants: (2) pay discrimination in violation of New York Labor Law (“NYLL”) §194; (3) sexual harassment, hostile work environment, and discrimination on the basis of gender, race, and ethnicity, in violation of the New York State Human Rights Law (“NYSHRL”), N.Y. Exec. Law §§290 et seq.; (4) the same, in violation of the New York City Human Rights Law (“NYCHRL”), N.Y.C. Admin. Code §§8-502 et seq.; (5) aiding and abetting the NYSHRL violations above; (6) aiding and abetting the NYCHRL violations above; (7) whistleblower retaliation in violation of NYLL §740; and (8) common-law intentional infliction of emotional distress. See FAC
162-205. Everyrealm has moved, under the parties’ arbitration agreement, to compel arbitration of Johnson’s claims. Johnson counters that, because the FAC includes sexual harassment claims, the arbitration agreement is unenforceable under the EFAA. Everyrealm counters that Johnson’s sexual harassment claims are fabricated and implausibly pled; that these should be dismissed under Federal Rule of Civil Procedure 12(b)(6); and that the Court should compel arbitration of the remaining claims. For the following reasons, the Court finds that Johnson’s FAC has pled a plausible claim of sexual harassment in violation of the NYCHRL. And the Court construes the EFAA to render an arbitration clause unenforceable as to the entire case involving a viably pled sexual harassment dispute, as opposed to merely the claims in the case that pertain to the alleged sexual harassment. The Court accordingly denies, in its entirety, Everyrealm’s motion to enforce the arbitration clause. Johnson’s claims will now proceed in this Court. I. Background1 A. Factual Background The FAC makes many factual allegations in support of its claims. In light of the narrow issue under the EFAA that the pending motion to compel arbitration presents, the following summary is focused on the allegations germane to the FAC’s claims of sexual harassment. The Court recounts other allegations as context and to illuminate the FAC’s other claims. The Court rejects defendants’ argument that, because the factual allegations on which the FAC’s sexual harassment claims rest were generally not included in Johnson’s initial Complaint, the Court must disregard these allegations.2 1. The Parties Everyrealm is a digital real estate company with a principal place of business in New York. Id.
