Labor & Employment Law Daily Wrap Up, ARBITRATION—E.D. Pa.: Motion to compel arbitration of sexual harassment, other claims, denied, (Sep 23, 2025)

By Thomas K. Lauletta, J.D.

Federal and state statutes blocked application of the arbitration agreement that the employees had signed.

A federal district court in Pennsylvania denied a motion by Everstory Partners to compel fired female employees to arbitrate their federal and state sexual harassment and other claims. The court held that the arbitration agreement that the employees had signed was valid and enforceable against them. However, the court refused to compel the employees to arbitrate their sexual harassment, retaliation and hostile work environment claims because they fell within the application of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (Sheehan v. Everstory Partners, No. 24-6581 (E.D. Pa. Sept. 17, 2025)).

Everstory Partners owns funeral homes and cemeteries in Huntingdon Valley, Pennsylvania. The plaintiffs, all women, are former employees of Everstory.

Offensive comments. According to the complaint, some of the employees heard the funeral director and their supervisor refer to an unidentified female employee by highly vulgar and derogatory terms for female genitalia. Additionally, the director frequently commented that the building in which the employees worked was a “f*cking sorority.” The director also made sexually suggestive comments about the employees’ physical appearances.

Refusal to violate rules. In 2022 and 2023, some employees were allegedly ordered to violate the rules promulgated by the State Board of Funeral Directors. In one instance, an employee refused a supervisor’s request that she illegally cremate a body without any paperwork, an incident another employee reported to Everstory. The supervisor allegedly also asked her “to violate the law by hiding the fact that a direct cremation package was sold by the cemetery to a family.” When the employee refused, the supervisor screamed at her and threatened to fire her.

Another employee reported to Everstory that the supervisor pressured her and other employees to perform illegal disinterments without the proper paperwork, which they refused to do. In another incident, Everstory allegedly pressured an employee “to illegally identify a body that had been placed in the wrong crypt without authorization,” but she refused to do so.

Complaint. On February 13, 2023, one of the employees made a complaint of sex discrimination to Everstory’s Human Resources Department. The other named plaintiffs all participated in the investigation of the employee’s complaint. After the supervisor learned of the employee’s sex discrimination complaint, he “continually called her and left multiple voicemail messages in an effort to intimidate her into withdrawing her complaint of discrimination.” Additionally, Everstory allegedly made escalating threats to terminate the employee if she refused to violate the law. Concerned that she would lose her license if she were fired, she resigned from her job on February 24, 2023. Everstory allegedly failed to pay the employee her final paycheck.

Terminations. All of the employees were terminated following their complaint, which was filed against Everstory and their supervisor. All of the employees were subsequently replaced by male employees.

Subsequently, the employees filed this lawsuit asserting claims for retaliation, sex discrimination, and a hostile work environment in violation of Title VII and state law, as well as a common law claim for wrongful discharge. In addition, the employee who did not receive her final paycheck brought a state-law claim for failure to pay all of her wages.

Arbitration motion. Everstory and the supervisor moved that the employees be compelled to arbitrate their claims pursuant to the arbitration agreement that was part of their employment agreement. Although the court held that the arbitration agreement was binding and enforceable, it refused to compel arbitration because of the application of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA).

Validity and scope of the arbitration agreement. Based on the undisputed facts of the case, the court held that the arbitration agreement was valid and enforceable and that the employees’ claims fell within its scope.

The EFAA. The court stated that if any of the employees’ claims fell within the purview of the EFAA, then the EFAA would apply to all of their claims. The court therefore analyzed the claims within the context of their hostile work environment claims under Title VII and the Pennsylvania Human Relations Act (PRHA).

Intentional discrimination based on sex. Viewing the complaint’s allegations in a light most favorable to the employees, the court held that the complaint plausibly alleged that the employees suffered an intentional hostile work environment because of their sex. In so concluding, the court recounted the highly objectionable and sexual harassing comments made by the funeral director to one of the employees and that the other employees were present when these and other sexual harassing comments were made by the funeral director and the supervisor.

Severity of the sexual harassment. The court concluded that while the objectionable and sexual harassing comments made by the director and the supervisor were not physically threatening, they were frequent, humiliating and known to all of the employees.

Detrimental effect of the discrimination. Further, the court held that the complaint not only alleged that the sexual harassment detrimentally affected the employees, but that it would also detrimentally affect a reasonable person in like circumstances.

Respondeat superior liability. Because the funeral director was the employees’ superior and had authority over the employees, his actions were vicariously attributed to Everstory.

Application of the EFAA. Holding that the EFAA applied to the employees’ sexual harassment and hostile work environment claims, the court held that it applied to their entire case, including their wrongful discharge and wage and collection claims. Thus, the court denied, in its entirety, the defendants’ motion to compel arbitration.

The case is No. 24-6581.

Judge: Padova, J.

Attorneys: Gregg L. Zeff (Zeff Law Firm) for Ciara Sheehan, Justine Heydorn, Lisa Polascak, Tara Iannacone and Lorraine Hernandez. Caroline Austin (Duane Morris) for Everstory Partners and Matthew Sobon.

Companies: Everstory Partners

Cases: Arbitration CoverageLiability Discharge Discrimination SexDiscrimination SexualHarassment Retaliation StateLawClaims PennsylvaniaNews