Eniola Famuyide v. Chipotle Mexican Grill, Inc.; Chipotle Services, LLC

United States Court of Appeals
For the Eighth Circuit
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No. 23-3201
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Eniola Famuyide,
lllllllllllllllllllllPlaintiff - Appellee,
v.
Chipotle Mexican Grill, Inc.; Chipotle Services, LLC,
lllllllllllllllllllllDefendants - Appellants.
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Appeal from United States District Court
for the District of Minnesota
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Submitted: May 8, 2024
Filed: August 5, 2024
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Before COLLOTON, Chief Judge, SHEPHERD and STRAS, Circuit Judges.
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COLLOTON, Chief Judge.
This appeal calls for a fact-specific determination on applicability of the
Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.
The district court1 determined that the Act applied to the dispute in this case, and thus
denied a motion to compel arbitration. We affirm.
1The Honorable Donovan W. Frank, United States District Judge for the
District of Minnesota.

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The federal law at issue allows a person alleging conduct constituting sexual
assault or sexual harassment to avoid enforcement of a predispute arbitration
agreement. The law applies when a dispute or claim arises or accrues on or after the
law’s enactment date of March 3, 2022.2
Eniola Famuyide brought this action against Chipotle Mexican Grill and its
subsidiary on April 20, 2023. The complaint alleges several claims under Minnesota
law arising from sexual assault and sexual harassment in the workplace. Chipotle
moved to compel arbitration based on an employment agreement with Famuyide. The
district court determined, however, that a dispute between Famuyide and Chipotle did
not arise until after March 3, 2022, so any arbitration agreement was not valid or
enforceable at Famuyide’s election. Chipotle argues on appeal that a dispute arose
before the enactment date, and that the court should have compelled arbitration.
The lawsuit stems from Famuyide’s employment with Chipotle. Her complaint
alleges that a co-worker began to sexually harass her soon after she commenced
employment in May 2021. In November 2021, the co-worker sexually assaulted
Famuyide in the restroom of the restaurant where they worked. Famuyide reported
the assault to her manager. The complaint alleges that the store manager initially
wanted to fire both Famuyide and the co-worker, but that another manager saved her
job. Famuyide then took a leave of absence from work because she was emotionally
unable to perform her duties.
2The Act provides that “at the election of the person alleging conduct
constituting a sexual harassment dispute or sexual assault dispute, . . . no predispute
arbitration agreement . . . shall be valid or enforceable with respect to a case which
is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or
the sexual harassment dispute.” Ending Forced Arbitration of Sexual Assault and
Sexual Harassment Act of 2021, Pub. L. No. 117-90, § 2(a), 136 Stat. 26, 27 (codified
at 9 U.S.C. § 402(a)). The Act states that it “shall apply with respect to any dispute
or claim that arises or accrues on or after the date of enactment of this Act.” Id. § 3.
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The complaint explains that on February 15, 2022, during Famuyide’s leave of
absence, she was unable to access the company’s online employee portal and thought
she had been terminated. Chipotle notified her on March 1, however, that the
termination had been rescinded. The company explained that she had been
terminated “in error” due to a mistake in how her leave of absence was entered into
a data management system.
Famuyide’s complaint filed in April 2023 alleges that Chipotle engaged in
unfair employment practices under Minnesota law (hostile work environment,
reprisal, and retaliation), and that the company is vicariously liable for assault and
battery and for intentional infliction of emotional distress. The complaint further
asserts that Chipotle negligently hired, retained, and supervised the co-worker, and
that the company failed to provide a safe work environment. Famuyide filed an
earlier complaint against Chipotle in Minnesota state court raising the same claims
on July 26, 2022. Famuyide voluntarily dismissed the state-court action and
participated in an unsuccessful mediation before filing this federal action.
The present lawsuit involves a sexual assault dispute and a sexual harassment
dispute within the meaning of the federal statute on arbitration of such disputes. See
9 U.S.C. § 401(3)-(4). Therefore, Famuyide may avoid a predispute arbitration
agreement if the disputes involved in this case arose on or after March 3, 2022. The
term “dispute” is not defined in the statute, so we apply the ordinary meaning of the
term. In a legal context like this one, a dispute is a “conflict or controversy, esp. one
that has given rise to a particular lawsuit.” Black’s Law Dictionary 593 (11th ed.
2019).
Although the state-court lawsuit was not filed until July 2022, Chipotle
maintains that a “dispute” arose before March 3, 2022, and should be submitted to
arbitration. Chipotle’s principal argument is that a dispute arose on November 23,
2021, when Famuyide’s co-worker sexually assaulted her in the restroom at the
restaurant. The company maintains that a “dispute” necessarily arises when the
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underlying conduct occurs. At that point, however, Famuyide had not asserted any
right, claim, or demand against Chipotle, and Chipotle had not registered
disagreement with any position of Famuyide’s. There was no conflict or controversy
between company and employee as of November 23, 2021, and no “dispute” between
the parties that could have been submitted to arbitration at that time.
Chipotle next asserts that a dispute arose when Famuyide’s counsel sent two
letters to the company in February 2022. On February 2, Famuyide’s lawyers wrote
that they were “investigating potential claims” and asked Chipotle to preserve all
information that was potentially relevant to the matter. The lawyers also requested
a copy of Famuyide’s personnel record. On February 21, Famuyide’s lawyers sent
a second letter to Chipotle. The lawyers said that Famuyide was “considering
pursuing a civil action against Chipotle” with various claims, and asked Chipotle to
respond by March 1 with answers to several questions regarding the sexual assault
and the company’s response to the incident. The letter also inquired whether Chipotle
“is interested in discussing an out-of-court resolution with Ms. Famuyide of her
claims.”
This sort of exploratory letter from counsel does not establish a dispute or
inevitably lead to one. Sometimes a dispute ensues after this type of correspondence.
But sometimes it does not, either because the client decides not to proceed further
after investigation or because the communications result in an amicable resolution
between the correspondents. As of February 2022, Famuyide was still “investigating
potential claims” and “considering pursuing a civil action.” Her lawyers did not
assert that Chipotle violated Famuyide’s rights, and they did not demand
compensation or payment from the company. There was thus no conflict or
controversy between the parties, and no “dispute” that could have been submitted to
arbitration in February 2022.
Chipotle’s argument of last resort relies on a letter dated March 1, 2022, that
the company’s counsel sent to Famuyide’s lawyers. Chipotle, however, did not
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submit this letter as evidence before the district court entered its order, and the
company acknowledges that the letter is not part of the record on appeal. See Fed. R.
App. P. 10(a); Meriwether v. Caraustar Packaging Co., 326 F.3d 990, 994 (8th Cir.
2003). Famuyide’s complaint recounts only that Chipotle communicated to her on
March 1 that she was terminated “in error” during February due to a data-entry
mistake.
Chipotle asks this court to include the March 1 letter in the record on appeal
and suggests that the Due Process Clause requires us to consider this document. We
generally refuse to consider evidence that was not presented to the district court, and
the “narrow, rarely exercised exception” to that rule is not applicable here. See Love
v. United States, 949 F.3d 406, 411-12 (8th Cir. 2020). Chipotle had ample
opportunity to file the March 1 letter in the district court, including with supplemental
briefing after a hearing on this precise matter, but chose not to do so. Neither the
interests of justice nor the guarantee of due process requires that Chipotle receive a
new opportunity to develop the record after the district court ruled.
The order of the district court is affirmed.
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