Sexual Harassment Claims and Forced Arbitration After the EFAA: Quilala v. Securitas Security Services USA, Inc.
In Quilala v. Securitas Security Services USA, Inc., the California Court of Appeal addressed the scope and operation of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) and clarified when an employment arbitration agreement becomes unenforceable once sexual harassment is alleged. The decision provides important guidance for employers on the interaction between the Federal Arbitration Act (FAA), the EFAA, and California’s Fair Employment and Housing Act (FEHA).
Francisco Quilala was hired by Securitas in 2012 as a security employee and, as part of his onboarding, signed a broad arbitration agreement governed by the FAA. The agreement required that employment-related disputes be resolved through binding arbitration rather than in court. In April 2023, Securitas assigned Quilala to work security at Oracle Park. The following month, a supervisor contacted Quilala and told him there had been a complaint about him being gay. During that conversation, the supervisor asked intrusive questions about Quilala’s sexual activity, commented that Quilala was “so embarrassing,” and stated that Quilala would be removed from his work assignment and have his hours reduced.
According to the complaint, rumors about Quilala’s sexual orientation then spread among coworkers. Quilala was removed from his assignment and experienced a substantial reduction in hours. A field supervisor repeatedly mocked him by referring to him as “Mrs. Quilala” during in-person encounters. On October 15, 2023, Quilala sent a written message demanding that the conduct stop and warning that he would pursue legal action if it continued. The next day, he was called into a meeting with management and a human resources representative, where he was allegedly criticized for his written complaint and subjected to yelling and badgering. Shortly thereafter, Securitas terminated his employment.
Quilala filed suit alleging 22 causes of action, including claims for sex, gender, and sexual orientation harassment under FEHA. Securitas moved to compel arbitration under the arbitration agreement. Quilala opposed enforcement on several grounds, but did not expressly invoke the EFAA. The trial court nevertheless denied the motion, concluding that because Quilala had pled a viable sexual harassment claim, the EFAA rendered the predispute arbitration agreement unenforceable. The court further held that the case could not be divided between arbitrable and non-arbitrable claims.
On appeal, Securitas argued that the trial court erred by relying on the EFAA without supplemental briefing, that Quilala had not stated a valid sexual harassment claim, that Quilala had not “elected” to proceed in court under the EFAA, and that any non-harassment claims should still be compelled to arbitration. The Court of Appeal rejected each argument.
The court emphasized that trial courts have an independent obligation to determine whether a dispute falls within the scope of the FAA before compelling arbitration, which necessarily includes evaluating whether arbitration is barred by the EFAA. Because the EFAA expressly requires courts—not arbitrators—to determine its applicability, the trial court acted within its authority by raising the issue sua sponte and allowing the parties to address it at the hearing.
Applying current FEHA standards, including Government Code section 12923 and recent Supreme Court authority, the court concluded that Quilala alleged conduct that was sufficiently severe or pervasive to alter the conditions of employment. The allegations went well beyond isolated teasing and included intrusive sexual questioning, humiliating comments, workplace mocking, loss of assignments and hours, and termination following a written complaint.
The court also rejected the argument that Quilala was required to expressly cite the EFAA to invoke its protection. Filing suit in court and opposing arbitration was sufficient to constitute an election to proceed in court. Nothing in the statute requires a formal invocation, and imposing such a requirement would undermine Congress’s purpose in enacting the EFAA.
Finally, the court held that once the EFAA applies, it renders a predispute arbitration agreement unenforceable as to the entire case, not merely the sexual harassment claims. The statutory language refers to a “case” relating to sexual harassment, and published California decisions uniformly interpret that language to preclude carving out non-harassment claims for arbitration.
Quilala underscores that the EFAA operates as a significant limitation on forced arbitration in employment cases involving sexual harassment. When a plaintiff pleads a viable sexual harassment claim and elects to proceed in court, predispute arbitration agreements governed by the FAA may be unenforceable as to the entire action. For employers, the decision highlights the importance of understanding how harassment allegations can affect dispute resolution strategies at the outset of litigation.