A restaurant worker who claimed he was sexually harassed on the job and underpaid can keep his suit in New York federal court after a judge found that a law barring mandatory arbitration for sexual harassment disputes also shields his wage claims.

U.S. District Judge Paul G. Gardephe on Monday partially reversed a magistrate judge's June 2023 ruling that found Danilo Mera's Fair Labor Standards Act and New York Labor Law claims were covered by an arbitration agreement he signed with SA Hospitality Group LLC and Café Focaccia, where he bussed tables.

Judge Gardephe said that because the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act barred Mera's harassment claims under New York state and city human rights laws from arbitration, his whole suit can remain in court.

"Where — as here — the EFAA is properly invoked and applies, a predispute arbitration agreement is invalid and unenforceable as to the plaintiff's entire case, and not just to plaintiff's sexual harassment claims," Judge Gardephe said.

In June 2023, U.S. Magistrate Judge Stewart D. Aaron found that Mera's class and collective action wage and overtime claims were fair game for arbitration, but that the EFAA blocked his individual hostile work environment allegations from being resolved outside of court. The law, which amended the Federal Arbitration Act in 2022, prevents employers from resolving sexual harassment claims through forced arbitration agreements.

Mera challenged the judge's order, arguing that because the EFAA blocks the arbitration of his harassment claims, the law also voids the entirety of the predispute arbitration agreement and allows his wage claims to remain in court. SA Hospitality Group, which owns Café Focaccia, is only facing Mera's wage claims, while the restaurant is accused of wage violations and permitting sex harassment.

Judge Gardephe said in the order docketed Monday that most courts in this district have concluded that when the EFAA applies to one of a worker's claims, the entire case is shielded from arbitration. The judge turned to the text of the law, which states that no arbitration pact is enforceable "with respect to a case" that "relates to the sexual assault dispute or the sexual harassment dispute."

The term "case" signifies that the EFAA applies to the entirety of a suit when a sexual misconduct dispute is at play, not just individual claims, the judge said. The restaurant group pointed to comments lawmakers made about the EFAA while it was being crafted, stating that the FAA amendment should be narrowly interpreted so that it doesn't bar other employment claims from arbitration.

Judge Gardephe concluded this defense falls flat, given that the text of the law makes clear that the EFAA casts its net over an entire suit when sexual misconduct claims are at issue, not just individual allegations.

"Judge Aaron's holding that plaintiff's FLSA and NYLL claims must be arbitrated is clearly erroneous and contrary to law," Judge Gardephe said.

Mera said in his April 2023 complaint that SA Hospitality Group violated wage laws by paying him a tipped wage, or an hourly rate less than the federal minimum wage, because he spent more than 20% of his workweek performing nontipped tasks such as cleaning glassware and bathrooms. Workers weren't paid the proper overtime premiums they were owed, he claimed, adding that the restaurant group also didn't pay him for time he arrived early for his shifts.

He also claimed Café Focaccia failed to stop harassment he experienced on the job due to his sexual orientation. Mera claimed his colleagues frequently called him homophobic Spanish slurs, asked him about his sex life, and inappropriately touched his waist and legs. When he complained, Mera said, his managers told him to ignore the behavior and called him "dramatic." He said he was forced to quit in February 2023.

Representatives of Mera, Café Focaccia and SA Hospitality Group did not immediately respond to requests for comment.

Mera is represented by C.K. Lee of Lee Litigation Group PLLC.

Café Focaccia and SA Hospitality Group are represented by Catalina Cadavid and Richard Ian Greenberg of Jackson Lewis PC.

The case is Mera v. SA Hospitality Group LLC et al., case number 1:23-cv-03492, in U.S. District Court for the Southern District of New York.