NY Federal Court Rules Nonsexual Conduct Can Block Arbitration for Harassment Claims
A NY federal court ruled nonsexual gender-based conduct can constitute sexual harassment, barring arbitration.
Why it matters: This ruling broadens sexual harassment definitions, allowing more claims to bypass arbitration and proceed in court, increasing employer legal risk and prompting policy reevaluation.
- On Oct 20, 2026, the Eastern District of NY held nonsexual gender-based hostile treatment counts as sexual harassment under NYSHRL and NYCHRL.
- The case involved a Muslim woman alleging demeaning gender-based insults by her employer.
- The court denied arbitration, applying the 2022 Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA).
- Second Circuit's Sept 2026 Diaz-Roa ruling allows EFAA to invalidate arbitration for entire lawsuits with sexual harassment claims.
In Elshabrowy v. Ali Awad Law, P.C., decided October 20, 2026, the U.S. District Court for the Eastern District of New York adopted a magistrate judge's ruling that nonsexual, gender-based hostile conduct can amount to sexual harassment under the NY State and NYC Human Rights Laws. The plaintiff, a Muslim woman of Arab descent, claimed her employer subjected her to unwelcome demeaning comments creating a hostile work environment.
The court denied the employer's motion to compel arbitration, invoking the Ending Forced Arbitration Act (EFAA) of 2022. Under EFAA, individuals alleging sexual harassment can void pre-dispute arbitration agreements, pursuing claims in court instead.
This expansion of sexual harassment to include nonsexual but gender-based conduct aligns with legal expert Leslie A. Lajewski's statement that "sexual harassment under NYSHRL and NYCHRL includes unwelcome verbal or physical behavior based on a person's gender, even if not sexual or lewd."
Moreover, the Second Circuit's September 2026 decision in Diaz-Roa v. Hermes Law, P.C. reaffirmed that when the EFAA applies, arbitration agreements can be invalidated for the whole lawsuit, not just the sexual harassment components.
Employers should note these developments may impact arbitration policies and litigation risk management relating to harassment claims, signaling a shift towards broader protections for employees and increased potential for court-based disputes.
By the numbers:
- 2022 — Enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA)
- October 20, 2026 — Eastern District of New York issued Elshabrowy v. Ali Awad Law, P.C. decision
- September 30, 2026 — Second Circuit Court issued Diaz-Roa v. Hermes Law ruling invalidating arbitration for all claims in sexual harassment cases