Labor & Employment Law Daily Wrap Up, DISCRIMINATION—SEXUAL HARASSMENT—S.D.N.Y.: Meta employee’s sexual harassment allegations not enough to invoke Enforcing Fairness in Arbitration Act, (Oct 1, 2025)

By Cathleen Calhoun, J.D.

“Whether the court should grant Meta’s motion to compel arbitration and stay the proceedings turns entirely on the application of the EFAA.”

Granting Meta’s motion to compel arbitration, a federal district court in New York found that while a manager’s allegations of sexual harassment against female employees were “regrettable” if true, they did not relate to conduct constituting sexual harassment for purposes of the Enforcing Fairness in Arbitration Act (EFAA). The manager signed a mutual arbitration agreement (MAA) at the beginning of his employment. About five years into his employment, he voiced concerns to his manager and HR, and later to the EEOC, regarding the treatment of female employees and claimed he was retaliated against for his actions. The court found, in analyzing the meaning of sexual harassment, the manager’s non-sexual allegations of gender discrimination at Meta did not suffice to render the MAA unenforceable (Smith v. Meta Platforms, Inc., No. 24 Civ. 4633 (JPC) (S.D.N.Y. Sept. 30, 2025)).

Alleged harassment and retaliation. Hired in 2018, the manager began noticing patterns of what he believed were gender-based disparities in 2023, including the unexplained downsizing of a high-performing female colleague’s role and reassignment of another to a supervisor who allegedly scrutinized her work more harshly than that of male peers. He also received complaints from other women on his team about systemic favoritism toward men in promotions, lack of career development support, and biased management practices. In response, he attempted to rectify the situation by increasing responsibilities for one affected female employee, allegedly resulting in the unusual omission of his formal performance review and informal negative feedback. Later that year, the situation escalated when he pressed Meta’s leadership to address diversity issues. He received further negative performance evaluations and was allegedly asked by his manager “to search for a new job within Meta” or to resign.

Action. In June 2024, a month before he resigned from Meta, the manager initiated this action by filing a complaint asserting causes of action for retaliation under New York State Human Rights Law (NYSHRL) Section 296(7), retaliation under New York City Human Rights Law (NYCHRL) Section 8-107(7), and interference with protected rights under NYCHRL Section 8-107(19). On June 20, 2024, he also filed a charge of retaliation with the EEOC.

Escalating behavior. After the filings, the manager claimed his “supervisors engaged in an escalating pattern of behavior intended to force [him] to leave his employment,” which included unfairly criticizing the quality of his work, “micro-managing” him, and assigning him work that was typically performed by lower-level employees. He began experiencing mental health issues such as stress and anxiety, unsuccessfully sought a transfer to a different team at Meta and resigned on July 22, 2024.

FAA and EFAA. Meta moved to compel arbitration and stay the proceedings under Sections 3 and 4 of the Federal Arbitration Act (FAA), arguing that the manager’s case must be resolved by an arbitrator according to the MAA. The court noted that “the proceedings turn entirely on the application of the EFAA,” since the manager did not dispute that, assuming the MAA is enforceable, the parties’ agreement delegates the question of arbitrability to an arbitrator. 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.” According to the court, “conduct that is alleged to constitute sexual harassment” was an open question.

Motion granted. The court granted Meta’s motion to compel arbitration. In its reasoning, the court found that the EFAA did not bar enforcement of the MAA because of how courts interpret “conduct that is alleged to constitute sexual harassment” and because the present case did not relate to such conduct. Courts require a “party to assert facts that actually constitute a legal violation—not just assert their position or belief that a legal violation has occurred” as was in the case at hand. According to the court, the EFAA applies only if the manager had shown, but he did not, that his case related to conduct that would, if proven, amount to sexual harassment under Federal, Tribal, or State law.

The manager’s argument that Meta’s motion should be denied under Diaz-Roa’s interpretation of the EFAA, that held that “a plaintiff need only plead nonfrivolous claims relating to... sexual harassment” to defeat a motion to compel arbitration under the EFAA, also failed. The court reasoned that it is “likely that the EFAA devotes federal-court resources to otherwise arbitrable cases only when those cases actually involve cognizable allegations of sexual harassment.” Since the court found that manager’s case did not relate to conduct constituting sexual harassment, the EFAA did not bar enforcement of the MAA.

The case is No. 24 Civ. 4633 (JPC).

Judge: Cronan, J.

Attorneys: William Racz Baker (Wigdor LLP) for Jeffrey Smith. Cameron Alexander Smith (Seyfarth Shaw) for Meta Platforms, Inc. dba Meta.

Companies: Meta Platforms, Inc.; Meta

Cases: Discrimination SexualHarassment Arbitration Retaliation NewYorkNews