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Eighth Circuit Finds Arbitration Agreement Unenforceable in a Claim for Sexual Assault

The Eighth Circuit has consistently enforced arbitration agreements contained in employment contracts. However, the Court recently held in Anderson v. Hansen that an arbitration clause in an employment agreement did not apply to an employee’s claim for sexual assault against another employee and the employer wherein the underlying tort claim was not related to and did not arise out of the employment contract.

The Andersons, independent contractors of Aflac, alleged that defendant Hansen, an Aflac employee, forced his way into Ms. Anderson’s hotel room and raped her during a work conference in St. Louis Missouri. The Andersons filed tort claims against Hansen for the sexual assault.

Hansen filed a Motion to Compel Arbitration arguing that he was a third-party beneficiary under an arbitration clause in the Anderson’s contract with Aflac. The district court denied the Motion to Compel. Hansen appealed arguing that the tort claims “‘touch[ed] matters covered by the arbitration provision’ and [was] therefore [] subject to arbitration.”

The Eighth Circuit disagreed with Hansen and affirmed the district court’s judgment holding that the “Andersons’ tort claims [did] not touch matters covered by the Andersons’ Arbitration Agreements.”

The Eighth Circuit had not previously addressed whether tort claims for sexual assault arise out of or relate to an employment contract. Thus, the Court looked to its sister circuits for two persuasive cases to help guide its reasoning: Jones v. Halliburton Co., 583 F.3d 228 (5th Cir. 2009) and Doe v. Princess Cruise Lines, Ltd., 657 F.3d 1204 (11th Cir. 2011).

In Jones, a female employee stationed at a company facility in Iraq brought tort claims against her employer after being sexually assaulted by several employees in the employee’s bedroom, after-hours, while off-duty following a social gathering outside of the employee’s barracks. The Fifth Circuit held that the employee’s tort claims arising from the gang-rape were not “related to” her employment within the meaning of an arbitration provision in her employment contract

In Doe, the Eleventh Circuit ruled that cruise line employee Doe’s claims of sexual assault by her coworkers were not covered by the arbitration provision in her Crew Agreement that limited arbitration to claims “relating to or in any way arising out of or connected with the Crew Agreement[.]” The cruise line attempted to distinguish its case from Jones based on the fact that that the employee was “continually in the service of the vessel and subject to the call of duty at any time.” The Eleventh Circuit rejected this argument stating this interpretation of the arbitration agreement would effectively erase limiting language of the arbitration agreement. The Court held that if the defendant employer intended for the arbitration to be broader in scope, then it should not have used the limiting language “relating to or in in any way arising out of . . . the Crew Agreement”

The Eleventh Circuit reasoned that the term “arising out of” was not “all encompassing” because the term “requires the existence of some direct relationship between the dispute and the performance of [work] duties.” The Court further found the term “related to” as “limiting language” that “marks a boundary by indicating some direct relationship.”

In Anderson, the Eighth Circuit held that the following language in the Andersons’ arbitration agreements was substantially similar to the limiting language in Doe: “any dispute arising under or related in any way to th[e] [Associate’s] Agreement . . . shall be subject to mandatory and binding arbitration.”

The Court therefore reasoned that the Andersons’ underlying factual allegations of sexual assault must have some “direct relationship” with the Andersons’ employment agreement in order to be arbitrable. And it concluded that nothing about the Andersons’ tort claims that Hansen drugged and raped Ms. Anderson arose under or related in any way to the Andersons’ Associate’s Agreements, in light of the agreements’ limiting language requiring the dispute to arise under or relate to the contract.

In this case, the deciding factor of whether the claim was arbitrable was in the language of the arbitration agreement itself. By including limiting language, the arbitration agreement was limited to claims relevant under the employment contract. This ruling does not necessarily indicate that the Eighth Circuit will now hold that claims arising out of a sexual assault that are arguably connected to a claimant’s employment will never be arbitrable under an employment contract. 

Rather, the Court’s decision suggests that this type of claim with these types of facts should not fall under an arbitration agreement that is, by its very language, limited to claims that arise out of or relate to the underlying employment contract. The Court has provided a framework for future litigants that underlying factual allegations of sexual assault must have some direct relationship with an employment contract for a mandatory employment arbitration provision to be enforceable.