Labor & Employment Law Daily Wrap Up, ARBITRATION—S.D.N.Y.: EFAA does not bar arbitration of Salesforce employee’s claims, (Aug 17, 2026)

By Kathleen Kapusta, J.D.

“Owens expressly rejected the notion that all claims of gender-based discrimination under the NYCHRL are claims of sexual harassment for purposes of the EFAA.”

Rejecting an account executive’s contention that the EFAA barred arbitration of her sexual harassment claims against Salesforce, Inc., including under the lenient NYCHRL, a federal district court in New York found that while she alleged instances of differential treatment, she failed to describe unwelcome verbal or physical behavior based on her gender constituting sexual harassment and thus her claims under the NYCHRL did not trigger application of the EFAA. Nor did her retaliation allegations independently support application of the EFAA because she failed to plausibly allege she complained of sexual harassment, said the court, granting the company’s motion to compel (Lane v. Salesforce, Inc., No. 25-CV-9707 (HJR) (S.D.N.Y. Aug. 14, 2026)).

According to the employee, while she performed well as an account executive in her first six years with Salesforce, things changed when she was assigned to a new territory with a new supervisor in February 2024. The supervisor, she alleged, treated her worse than her three male colleagues including by blaming her for issues that were not her fault, making false accusations against her, and excluding her from communications and decisions.

Complaints to HR. The same day the employee complained to HR about her supervisor’s treatment, she was placed on a PIP. The employee then made a second complaint to HR claiming the supervisor’s accusations were false and she “was discriminating against her and creating a hostile work environment.”

Termination. Less than a month later, the employee was placed on medical leave by her doctor. Upon her return, she claimed her supervisor continued to set her up for failure by denying her information she needed to perform her job, being generally unsupportive, and treating her worse than her male peers. After she filed a charge with the EEOC, her supervisor reinstated the PIP and she was ultimately fired in April 2025.

Alleging discrimination based on, among other things, her gender, the employee sued under Title VII, the New York State Human Rights Law (NYSHRL), and the New York City Human Rights Law (NYCHRL). Salesforce moved to compel arbitration and the employee argued that the EFAA barred arbitration of her sexual harassment and retaliation claims.

Sexual harassment dispute. Noting that the EFAA defines “sexual harassment dispute” as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law,” the court explained that for her case to fall within the scope of the EFAA, her discrimination claims under the NYCHRL, which provides the “most lenient” and “expansive” liability standard for sexual harassment claims, must include allegations of conduct that constitutes sexual harassment as defined by the NYCHRL.

While Salesforce argued that the conduct at issue “must be sexualized in nature” and must involve, for example, “unwanted sexual advances, requests for sexual favors or other interactions of a sexual nature,” the employee cited Mihalik v. Credit Agricole Cheuvreux N. Am., Inc., which predated the EFAA, in which the Second Circuit stated that “[t]o establish a gender discrimination claim under the NYCHRL, the plaintiff need only demonstrate ‘by a preponderance of the evidence that she has been treated less well than other employees because of her gender.’”

But, said the court, while the Second Circuit in Mihalik articulated a lenient standard for gender discrimination under the NYCHRL, it did not address whether the NYCHRL considers all forms of gender discrimination to constitute sexual harassment. Arguing for application of the standard articulated in Owens v. PriceWaterHouseCoopers LLC, a 2025 decision from the Southern District of New York, the employee asserted that the conduct she alleged in her complaint was prohibited under the test set out by that court.

Owens.Owens, the court here observed, “reasoned through what it described as the ‘interesting issue’ of ‘how the EFAA interacts with the NYCHRL.’” The Owens court recognized that the NYCHRL neither creates a claim for sexual harassment nor defines what conduct constitutes sexual harassment but instead “recognizes that sexual harassment is one species of sex- or gender-based discrimination.” According to Owens, “the most straightforward reading of the NYCHRL is that sexual harassment is a subcategory of conduct within the broader category of gender-based discrimination.” Owens, however, expressly rejected the notion that all claims of gender-based discrimination under the NYCHRL are claims of sexual harassment for purposes of the EFAA.

In determining “how to define the subset of discriminatory conduct that is also ‘sexual harassment,’” the Owens court looked to various authoritative sources, including the New York City Commission on Human Rights, in concluding that “the standard this Court employs to determine whether conduct constitutes sexual harassment under the NYCHRL for purposes of the EFAA—unwelcome verbal or physical behavior based on a person’s gender that need not be sexual or lewd in nature—is a higher bar than simply alleging that a plaintiff was ‘treated less well than other employees because of [ ] gender.’”

Assuming without deciding that Owens and its progeny provide the correct standard for determining whether a NYCHRL claim triggers application of the EFAA, the court here found that while the employee alleged instances of differential treatment based on gender, she failed to plausibly plead sexual harassment. In Owens, the court observed, the plaintiff alleged that she was “yelled at... in front of directors” and “denigrated... in front of subordinates” to the point where she was “verbally threatened and berated[.]”

These allegations, the Owens court concluded, sufficiently pleaded sexual harassment under the NYCHRL because the plaintiff alleged that “she and other women were publicly demeaned and disparaged in a way that... none of their male colleagues were[.]” The Owens court, however, also noted that allegations that supervisors had “work[ed] together to prevent [plaintiff] from getting tenure” and “provided [plaintiff] very few leads despite providing leads to young male directors” did not constitute sexual harassment because such behavior was “not unwelcome verbal or physical behavior directed at [plaintiff,]” but rather “conduct that occurred behind [plaintiff’s] back that gave her fewer opportunities to excel.”

Here, the employee did not allege any shouting or yelling or any demeaning conduct or use of gendered terms. Rather, she alleged her supervisor criticized her, did not support her, and excluded her from business communications. While these allegations might describe differential treatment, they did not describe unwelcome verbal or physical behavior based on her gender and did not constitute sexual harassment, said the court, and thus they did not trigger application of the EFAA.

Title VII, NJLAD, and NYSHRL claims. As to her claims under Title VII, the New Jersey Law Against Discrimination (NJLAD), and the NYSHRL, her complaint failed to allege conduct meeting the high standard for a hostile work environment under Title VII. Noting that an “actionable hostile work environment claim under the NJLAD closely resemble[s] the... elements of [a] Title VII hostile work environment claim,” the court found that because she failed to make plausible allegations of a hostile work environment under Title VII, she also failed to do so under the NJLAD. And “because the NYCHRL supplies the—or tied with the NYSHRL for—the most lenient applicable liability standard,” the court found the EFAA was not triggered by the employee’s NYSHRL claims.

Retaliation. Finally, turning to the employee’s retaliation claims, the court noted that the EFAA extends to claims of “retaliation resulting from a report of sexual harassment” because such retaliation is “relat[ed] to conduct that is alleged to constitute sexual harassment.” Focusing again on the employee’s claim under the NYCHRL, the court explained that even though the NYCHRL only requires a plaintiff to have a good faith, reasonable belief that the underlying employment practice was unlawful, the retaliation needs to have resulted from a report of sexual harassment as opposed to gender-based discrimination.

The employee argued that the retaliation actions taken against her included her placement on the PIP, false claims related to her performance, creation of obstacles to her return from medical leave, assignment of administrative work, and her eventual firing. While she alleged that Salesforce retaliated against her for her opposition to unlawful sex discrimination, including sexual harassment, she did not plausibly plead any facts demonstrating that she reported sexual harassment.

Specifically, she alleged that she complained to her supervisor that she did not feel supported by her and that the supervisor was targeting her and treating her differently from the rest of the team; that she complained to HR about the supervisor’s treatment of her; and that she refuted the supervisor’s accusations about her performance and complained about how “she was treated differently from her younger, male peers.” But these allegations, said the court, “fail to plausibly demonstrate that Plaintiff had a ‘good faith, reasonable belief’ that she opposed sexual harassment, as opposed to gender discrimination.” Because she did not plausibly plead retaliation for sexual harassment under the NYCHRL, the EFAA did not bar arbitration of her claims.

The case is No. 25-CV-9707 (DEH) (HJR).

Judge: Ricardo, H.

Attorneys: Anne L. Clark (Vladeck, Raskin & Clark) for Tricia Lane. Colleen P. Tandy (Fisher & Phillips) for Salesforce, Inc.

Companies: Salesforce, Inc.

Cases: Arbitration SexualHarassment SexDiscrimination Retaliation Discharge StateLawClaims NewYorkNews GCNNews