A bronze statue of Lady Justice holding scales is displayed indoors.
DENVER - A bartender at an adult nightclub who was fired after she filed a sexual-harassment suit can’t be compelled to arbitrate separate claims the firing was related to her status as a potential witness in a wage-and-hour investigation, a Colorado appeals court ruled.
A federal law banning mandatory arbitration of sexual harassment claims covers all of the elements of the plaintiff’s case, the Colorado Court of Appeals ruled, for the first time defining the scope of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) under Colorado law. The July 9 opinion was by Judge Timothy J. Schutz.
Dana Dreifus sued Glenarm Dining Services, owner of the Diamond Cabaret in Denver, accusing a superior of sending her “unwelcome messages over a social media messaging app.” The messages “escalated over several months,” the plaintiff said, and persisted after she made it clear she wasn’t interested in a romantic relationship.
Dreifus said the process for reporting her superior’s behavior was “difficult and emotionally taxing.”
Glenarm moved to dismiss her claim, put her on administrative leave and fired her soon after. Dreifus then amended her claim to add that she was a potential witness for the Denver Auditor’s Office in a potential wage violation investigation involving Diamond Cabaret. She said she was fired both for serving as a potential witness and for filing a sexual harassment claim.
Glenarm then argued the new allegations were subject to mandatory arbitration under state and federal law, even as it conceded the sexual harassment claims were not. The EFAA, signed into law by President Joe Biden in 2022, amended the Federal Arbitration Act to prohibit mandatory arbitration of sexual harassment claims.
The appeals court cited a Second Circuit decision applying EFAA to all eight of a plaintiff’s claims, even though only two related to sexual harassment. While not binding on a Colorado state court, the appeals court said the ruling was persuasive. The federal law applies to a “case,” which can include more than a single claim, the Second Circuit ruled.
“A case or action refers to an overall legal proceeding filed in a court, whereas a ‘claim’ or a ‘cause of action’ refers to a specific assertable or asserted right within such a proceeding,” the Second Circuit said
The defendants cited a California federal court decision case denying EFAA covered a wage-and-hour claim that was included in a sexual harassment lawsuit. But the Colorado appeals court said in Dreifus’ case, the allegations about her firing “are not independent of her sexual harassment claim.”
“There may be an outer limit” where a claim is too far removed from sexual harassment to fall under the EFAA, the Colorado appeals court concluded, but this is not that case.
Livelihood Law represented the plaintiff, while the defendant was represented by The Litigation Boutique.
