Chipotle can't force arbitration of workplace rape claim, US court rules
By Daniel Wiessner
Aug 5 (Reuters) -A U.S. appeals court on Monday said a former Chipotle Mexican Grill employee does not have to arbitrate claims that she was sexually harassed and raped by a coworker, because she sued the restaurant chain after a federal law took effect banning agreements to keep such claims out of court.
A unanimous three-judge panel of the St. Louis-based 8th U.S. Circuit Court of Appeals said the law that passed Congress with bipartisan support in 2022 applies to any lawsuit filed after it was enacted, rejecting Chipotle's claim that it only covers conduct that occurred after that date.
The ruling is the first of its kind by a federal appeals court, and could salvage some pending cases and invite new ones involving conduct that occurred prior to the adoption of the law. A California state appeals court in January also said the federal ban applies based on the date a lawsuit is filed and not when the underlying conduct occurs.
The plaintiff says a coworker raped her in the bathroom at a Rochester, Minnesota restaurant in 2021 after verbally harassing her for months, and that Chipotle failed to investigate or respond after she told a manager about the assault. She had signed an agreement to arbitrate employment-related disputes when she was hired, and initially sued Chipotle a few months after the federal law took effect.
Chipotle and lawyers for the plaintiff did not immediately respond to requests for comment. Reuters does not identify victims of rape.
The plaintiff's coworker was arrested and in January convicted of felony sexual assault, according to Minnesota state court records.
The plaintiff sued Chipotle in Minnesota state court in July 2022, about four months after the federal law went into effect. She accused the company of tolerating a hostile work environment, retaliation, failing to provide a safe work environment, and intentional infliction of emotional distress under Minnesota law.
The plaintiff withdrew the lawsuit to participate in an ultimately unsuccessful mediation before filing a new complaint in Minnesota federal court in 2023.
Chipotle denied wrongdoing and moved to send the case to arbitration, citing the agreement the plaintiff had signed. But U.S. District Judge Donovan Frank in St. Paul last year said the agreement could not be enforced because of the federal ban on mandatory arbitration of harassment and assault claims.
The 8th Circuit on Monday affirmed. The law applies to "disputes" that arise on or after its effective date, and that term applies to an actual "conflict or controversy," such as a lawsuit, the court said.
"There was no conflict or controversy between company and employee as of [the date of the assault] and no 'dispute' between the parties that could have been submitted to arbitration at that time," Circuit Judge Steven Colloton wrote.
The court also rejected Chipotle's claim that a dispute arose once the plaintiff's lawyer sent the company a letter saying she was considering suing in February 2022, weeks before the federal law went into effect.
The letter did not establish a dispute or inevitably lead to a lawsuit, since it could have led to a settlement or the plaintiff could have chosen not to pursue her claims, Colloton said.
The panel included Circuit Judges Bobby Shepherd and David Stras.
The case is No. 23-3201 in the 8th U.S. Circuit Court of Appeals.
For the plaintiff: Nicholas Nelson of CrossCastle
For Chipotle: Matthew Treco of Martenson, Hasbrouck & Simon
Read more:
U.S. Congress passes ban on forced arbitration of worker sex abuse claims
House passes bill to end mandatory arbitration of legal disputes
Sex harassment claim shields whole lawsuit from arbitration, judge rules
Bill to ban arbitration of sexual harassment claims clears House
Reporting by Daniel Wiessner in Albany, New York
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