Unreported / Non-Citable
Background
Anthony Lewis sued Tesla, Inc. in the Northern District of California asserting workplace harassment claims. Tesla moved to compel arbitration based on the parties’ written agreement. Lewis argued that the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”), passed in 2022, blocked enforcement of the arbitration clause as to his sexual-harassment allegations. The EFAA gives an employee the right to refuse arbitration of a sexual-assault or sexual-harassment dispute, but only when the dispute “arose or accrued” on or after the law’s effective date.
In a September 2025 order, Judge Araceli Martínez-Olguín granted Tesla’s motion. She found Lewis had not carried his burden to show the EFAA applied: he had not put into the record the date he filed his administrative complaint with the California Civil Rights Department (“CCRD”). Under California’s framework as construed in Kader v. Southern California Medical Center, Inc., the dispute is treated as having arisen no later than that filing date. Without that fact, Lewis could not show the dispute accrued after the EFAA took effect. The court also rejected his argument that the arbitration clause was unconscionable.
Lewis then filed a Rule 59(e) motion to alter or amend the judgment, or alternatively for leave to seek reconsideration under Civil Local Rule 7-9. He attached a March 28, 2024 CCRD right-to-sue notice as supposed “newly discovered evidence,” argued the prior order rested on clear error and would cause manifest injustice, and pointed to recent Sixth and Third Circuit decisions interpreting the EFAA. Tesla opposed, contending the document had been in counsel’s possession all along and that the cited circuit cases did not change governing law.
The Court’s Holding
The court denied Lewis’s motion in full. It applied the demanding Ninth Circuit standard for Rule 59(e) relief: such motions are an “extraordinary remedy” available only on newly discovered evidence, clear error or manifest injustice, intervening change in controlling law, or other highly unusual circumstances, and they cannot be used to relitigate prior arguments or present material that could have been raised earlier.
The right-to-sue notice was not newly discovered. Lewis conceded it had been in his counsel’s file before the arbitration ruling, and its relevance was foreseeable because his complaint expressly referenced exhaustion before the CCRD and the court had ordered supplemental briefing on the EFAA burden. He had failed to show the diligence required by Civil Local Rule 7-9(b)(1), and his motion repeated arguments already made, in violation of Local Rule 7-9(c).
The court also rejected the claim of clear error, reaffirming that under Kader the dispute arose no later than the CCRD filing date and that Lewis’s failure to put that date in the record was his own evidentiary failing, not a misreading of California law. Finally, the recent out-of-circuit decisions — the Sixth Circuit’s Memmer v. United Wholesale Mortgage and the Third Circuit’s Cornelius v. CVS Pharmacy — are not binding in the Ninth Circuit and, in any event, reinforce that EFAA applicability is a fact-specific inquiry that depends on when the dispute arose. New arguments raised for the first time in Lewis’s reply, including a pivot to Rule 54(b), were waived. The arbitration stay therefore remains in place, with periodic status reports due to the court.
Key Takeaways
- An employee invoking the EFAA bears the burden of building a record showing the sexual-harassment dispute arose on or after March 3, 2022. That includes putting in evidence of administrative-filing dates with agencies like the CCRD.
- Under Kader, a dispute is generally treated as arising no later than the date a CCRD or DFEH complaint is filed, even if the lawsuit follows much later.
- Rule 59(e) is not a do-over. Documents already in counsel’s file are not “newly discovered,” and arguments not raised before judgment cannot be smuggled in by relabeling them.
- Civil Local Rule 7-9 in the N.D. Cal. requires leave for any reconsideration motion and bars repeating earlier arguments. Diligence must be affirmatively shown.
- Out-of-circuit appellate decisions on the EFAA can be persuasive but do not, by themselves, supply the “intervening change in controlling law” that justifies reconsideration in the Ninth Circuit.
Why It Matters
The EFAA is one of the most consequential federal employment statutes of the past decade because it lets workers escape pre-dispute arbitration agreements for sexual-harassment and sexual-assault claims. But its protection only attaches if the underlying dispute “arose or accrued” after the statute’s effective date — a question that turns heavily on records like agency complaints. This order is a stark reminder that those records have to be in evidence at the original arbitration motion, not introduced later as “new” proof.
For California employers and their counsel, the order reinforces an emerging consensus that the CCRD filing date generally fixes when a workplace dispute “arose.” For employees, it underscores how important it is to plead and document the timeline carefully the first time around: a Rule 59(e) motion is unlikely to fix evidentiary gaps. The opinion also shows the Northern District applying its strict local rule on reconsideration, which sets a higher bar than Rule 59(e) alone.