A California Court of Appeal has ruled for the first time that harassment based on sexual orientation constitutes sexual harassment under state law, with major implications for arbitration agreements.
The decision, reached in Decloedt v. Radnet Management, Inc., means that employees alleging sexual orientation harassment can now invoke the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, known as the EFAA.
The court, specifically the California Second Appellate District, affirmed the denial of an employer’s motion to compel arbitration in the case.
The plaintiff, Trevor Decloedt, filed a complaint in October 2024 alleging eleven California state law causes of action, including hostile work environment and sexual harassment discrimination under the Fair Employment and Housing Act, known as FEHA.
Decloedt alleged that beginning in early 2022, a coworker subjected him to repeated derogatory comments about his sexual orientation, including telling him, “You shouldn’t be gay; it’s not okay; it’s sinning.”
He further alleged the coworker threatened to kill him, pulled his hair on multiple occasions, and physically attacked him in November 2022, forcing him to flee to the bathroom for safety.
Decloedt claimed he reported these incidents to his supervisor and HR, but no corrective action was taken by his employers.
In December 2024, the defendants moved to compel arbitration under an agreement Decloedt had signed at the start of his employment, but the trial court denied that motion, prompting an appeal.
The Court of Appeal rejected both of the defendants’ principal arguments, finding that sexual orientation harassment is a form of sexual harassment under FEHA and that Decloedt had sufficiently alleged severe or pervasive conduct.
The court relied heavily on the US Supreme Court’s reasoning in Bostock v. Clayton County, concluding that “discrimination based on homosexuality or transgender status necessarily entails discrimination based on sex,” and that this logic applies equally to harassment claims.
The defendants argued that FEHA’s statutory structure, specifically the omission of sexual orientation from a list of characteristics constituting sex-based harassment, demonstrated it was a distinct category not covered by the EFAA.
The court rejected that argument, holding that the word “includes” is “generally used as a word of enlargement and not of limitation,” meaning the listed categories do not exclude others inextricably linked to an employee’s sex.
On the question of severity, the court found Decloedt’s allegations sufficient, noting that the alleged conduct caused him to contemplate suicide and therefore met the threshold for severe or pervasive harassment.
The ruling in Decloedt significantly expands the categories of harassment capable of triggering the EFAA in California, going further than any prior published California appellate decision on the subject.
Employers in California should now review their anti-harassment policies and training programmes to ensure they address sexual orientation harassment, given the litigation risk posed by the EFAA’s broad arbitration exemption.