# The Employment Limit Added by Courts Auremont Vale 2026-07-26T21:02:08+00:00 [Canonical article](https://auremontvale.com/journal/the-limitation-congress-never-wrote/) An Italian high-school exchange student accused her host father of rape and sued the sponsor that placed her in his home for negligence. When the sponsor tried to enforce her arbitration agreement, a federal judge refused to compel arbitration because Congress did not limit the sexual-assault exception to workplace cases or assaults by employees. ## The Case at a Glance **Case**: Doe v. International Student Exchange, Inc. **Court**: Central District of Illinois · July 22, 2026 **Question**: Does the federal arbitration exception reach negligence claims arising from an assault by a host father rather than an employee? **Result**: Arbitration denied; the negligence action proceeds in court. Before Jane Doe entered the United States, International Student Exchange, Inc. had already chosen where any dispute between them would be heard. Its Program Agreement required every controversy “concerning, relating, or referring to” the exchange program to be “resolved exclusively” in arbitration. The contract fixed the forum before Doe ever arrived in the country. Doe signed the agreement and traveled from Italy to attend an American high school through the Secondary School Visitor Exchange Program. ISE recruited the host family that would house her and assigned coordinators to oversee her stay. Her complaint alleges that the host father, Gary Leato, soon began touching her without consent and raped her in December 2023. Doe alleges that after she reported the rape, ISE’s coordinators failed to notify law enforcement and advised her to confront Leato herself. ISE moved her to another home in Indiana, but Leato continued contacting her. After Doe told the second host family what had happened, they called the police. Leato was charged and later pleaded guilty to felony sexual assault of a minor. In March 2026, Doe sued ISE and two of its coordinators. Her state-law claims allege that ISE placed her in the home without adequate screening and failed to train its coordinators to respond to sexual misconduct. ISE invoked the Program Agreement and moved to compel arbitration. The parties did not dispute that the clause, standing alone, covered her claims. Congress, however, had since given sexual-assault and sexual-harassment claimants the right to reject forced arbitration. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) applies to disputes and claims arising or accruing on or after March 3, 2022. It covers any case filed under federal, tribal, or state law that “relates to” a sexual-assault or sexual-harassment dispute. The claimant decides whether to use the Act, and a court—not an arbitrator—decides whether the case qualifies. On July 22, 2026, U.S. Magistrate Judge Ronald L. Hanna held that the Act covered Doe’s negligence claims because they arose from the alleged assault. Section 402 does not require the alleged assailant to be the defendant’s employee or agent. Because Doe’s claims were directly tied to the assault, Hanna denied ISE’s motion and kept the case in court. ## Congress Gave the Choice to the Claimant The Federal Arbitration Act ordinarily requires courts to enforce valid arbitration agreements as written. ISE invoked that rule and a clause broad enough to reach disputes over its choice of host family and its coordinators’ response after Doe reported the assault. Congress added Chapter 4 to the FAA for cases involving sexual assault or sexual harassment. A claimant may still choose arbitration after a dispute arises, but the EFAA prevents the other side from imposing that forum in advance. When a case relates to a covered dispute, Section 402 makes a predispute arbitration agreement or joint-action waiver unenforceable if the claimant chooses court. The Act also keeps that threshold question out of the arbitrator’s hands. Section 402(b) requires a judge to determine whether the EFAA applies even when the contract says an arbitrator should decide disputes about arbitrability. ISE’s argument rested on two questions. How far does the phrase “relates to” extend? And does the Act apply when the alleged assailant had no employment or agency relationship with the defendant? Doe sought relief under state negligence law for injuries she said arose from nonconsensual sexual acts. Her claims therefore depended on the same alleged assault that triggered the statute. ISE urged Hanna to read the Act more narrowly because Congress enacted it after a national campaign focused on workplace abuse. The #MeToo movement had exposed how employers used forced arbitration to remove workplace assault and harassment claims from court. President Biden and members of Congress spoke often about workplace justice when the bill became law, and most early EFAA cases arose from employment. ISE argued that this history limited the Act to workplace disputes and assaults committed by someone who worked for the defendant. Hanna refused to add those limits. Section 402 applies to cases filed under federal, tribal, or state law. It does not say that the assault must occur at work, happen on business premises, or be committed by the defendant’s employee or agent. “The best—and indeed, the only reliable—evidence of congressional intent is the text Congress enacted,” he wrote. ## The Relationship Requirement Two Courts Added ISE relied on two recent federal cases in which plaintiffs said companies enabled abuse by outsiders. Both courts found that the lawsuits were connected to sexual assault or harassment, yet still sent the claims to arbitration. In *M.D. v. Verizon Communications, Inc.*, a woman alleged that her stalker used a fraudulent search warrant to obtain her personal information from Verizon, then sexually harassed her and threatened to rape and kill her. The federal court in North Carolina held that she had plausibly alleged sexual harassment and that her case related to that dispute. Even so, it severed her claims against Verizon and sent them to arbitration. The court relied heavily on the legislative record, especially a House report focused on workplace abuse and consumers assaulted at businesses. Because the alleged harasser neither worked for Verizon nor had any legal relationship with it, the court concluded that Congress had not meant the EFAA to cover negligence claims based on Verizon’s release of her information. Two months later, *Farnham v. Grindr, LLC* followed the same reasoning. Miranda Corsette was sixteen when, according to the complaint, she met an adult through Grindr. Her estate alleged that the man and his partner tortured and murdered her, then sued Grindr for wrongful death, negligence, product defect, and negligent design. The Florida court compelled arbitration because the perpetrators had no legal relationship with Grindr and, in its view, the case fell outside the problem Congress set out to address. Those courts leaned on legislative history, but “relates to” still has limits. A judge must determine whether the complaint plausibly alleges sexual assault or sexual harassment, whether the dispute arose during the Act’s effective period, and whether the lawsuit is actually connected to it. A stray reference to sexual conduct cannot pull an otherwise unrelated case out of arbitration. Neither *Verizon* nor *Farnham*, however, treated the alleged misconduct as incidental. The *Verizon* court expressly found that the action related to a sexual-harassment dispute. The Grindr complaint alleged that the platform gave the perpetrators access to the minor and that defects in its design enabled what followed. After making those findings, both courts added another condition: the alleged perpetrator had to work for, represent, or otherwise have a legal relationship with the company seeking arbitration. Hanna rejected that condition. Both opinions, he wrote, “rewrote clear statutory text” according to what the judges believed Congress intended. Once a case meets the requirements Congress actually wrote, a court cannot send it back to arbitration by inventing an employment or agency requirement. ## One Phrase, Two Directions ISE and Congress used nearly the same words to point in opposite directions. The contract used “relating to” to sweep disputes into arbitration. Congress used the same phrase to let sexual-assault and sexual-harassment claimants keep qualifying cases in court. The Program Agreement covered any dispute “concerning, relating, or referring to” the exchange program. Those words reached beyond a claim that ISE broke a promise written in the contract. They also reached disputes over the host family ISE selected, its supervision of the placement, and its coordinators’ response when Doe asked them for help. Congress used the same phrase just as broadly. A claimant does not need to sue the company for committing the assault itself. The case must be connected to a dispute involving nonconsensual sexual conduct. Doe alleged that ISE placed her in the home where the assault occurred and mishandled her report afterward. Those facts tied her negligence claims directly to the alleged assault. ISE wanted the contract’s broad wording enforced but Congress’s broad wording narrowed. Hanna declined to treat the same phrase differently depending on who wrote it. The arbitration clause covered Doe’s claims, but the EFAA gave her the final choice of forum. Outside cases covered by the EFAA, courts continue to enforce arbitration agreements under the ordinary FAA rules. But when a qualifying claimant chooses court, the predispute arbitration clause cannot be enforced for that case. ## Why Congress Wrote “Case” Congress used the word “case,” not “claim.” That choice can keep an entire lawsuit in court rather than only the count alleging sexual harassment or sexual assault. In *Johnson v. Everyrealm, Inc.*, a federal court kept race discrimination, pay discrimination, retaliation, and other claims in court alongside a plausibly pleaded sexual-harassment claim. Published California decisions—*Doe v. Second Street Corp.*, *Liu v. Miniso Depot CA, Inc.*, and *Quilala v. Securitas Security Services USA, Inc.*—later adopted the same reading. Once the EFAA applies to a case, a court cannot keep the harassment claim while sending the remaining counts to arbitration. Courts do not accept a sexual-harassment label at face value. They examine the alleged facts, the law governing the harassment claim, and the date the dispute or claim arose. Implausible or legally insufficient allegations do not trigger the Act. Once the allegations satisfy those requirements, however, the word “case” prevents a company from moving the remaining counts into arbitration one by one. Under that reading, a worker who brings sexual-harassment, retaliation, and wage claims litigates one lawsuit in one forum. The company cannot leave the harassment count in court while sending closely connected claims to arbitration. Hanna did not need to decide whether the rule could keep unrelated claims in court because every one of Doe’s claims arose from the alleged assault. His order therefore applied Congress’s use of “case” without extending it beyond the facts before him. ## The Question Waiting in California Lawsuits against some of the country’s largest digital platforms now pose the same question. In December 2025, the Judicial Panel on Multidistrict Litigation brought federal cases together in one court after families alleged that predators groomed minors on Roblox and then moved the conversations to Discord, Snapchat, Instagram, text messages, or video calls. The complaints accuse the platforms of negligence, inadequate warnings, misrepresentations, and defective product design even though the alleged perpetrators did not work for the companies. When the panel centralized the litigation, it included thirty-one actions from twelve federal districts and identified forty-eight more related cases. Roblox, Discord, Snap, and Meta said they planned to seek arbitration in many or all of them. The panel identified EFAA coverage as a common issue that could be briefed once for the coordinated litigation in MDL No. 3166. The district courts now point in opposite directions. *Verizon* and *Farnham* make the perpetrator’s relationship with the company decisive. Under Hanna, courts ask whether the claimant’s case is tied to a covered dispute without adding conditions Congress did not write. Under Hanna’s reading, the EFAA can cover negligence or product-liability claims arising from sexual assault or harassment by an outside user. Hanna’s order does not bind Chief Judge Richard Seeborg, who oversees the Roblox litigation. But the platform companies have raised the same arbitration defense in MDL No. 3166. Seeborg will have to decide whether families may litigate common product-safety allegations together in federal court or must pursue them in separate arbitrations. The choice of forum will shape how the evidence is gathered. In centralized litigation, the parties can coordinate discovery into what the platforms knew, how they verified age and identity, what warnings they gave, how they designed their products, and which safety features were feasible. Arbitration would divide those claims into separate proceedings under separate agreements, making it harder to gather and decide the common evidence in one place. ## The Order’s Actual Reach Hanna decided only where the case will proceed. He did not decide whether ISE or its coordinators were negligent, whether their conduct caused Doe’s injuries, or what damages she may recover. Doe must still prove her allegations unless the parties resolve the case. The EFAA remains a limited exception to mandatory arbitration. It applies only when a person alleging a covered dispute chooses court under the Act, and it excludes claims and disputes that arose or accrued before March 3, 2022. Courts still must decide when the dispute arose, whether the alleged conduct meets the statute’s definitions, and whether the lawsuit is sufficiently connected to that conduct. Because *Verizon*, *Farnham*, and *Doe* are district-court rulings, none creates a binding circuit rule for cases in which the alleged assailant did not work for the defendant. The conflict remains open. Hanna denied ISE’s motion because Section 402 does not require an employment or agency relationship, even though public debate over the Act focused heavily on workplace abuse. ## The Employment Limit Added by Courts ISE wrote its arbitration clause broadly enough to cover Doe’s claims. Congress then gave claimants in qualifying sexual-assault and sexual-harassment cases the right to reject that clause. The alleged assailant was a host father, not an ISE employee. Nothing in Section 402 required him to work for ISE. Hanna applied the statute and kept the negligence case in court, ordering the defendants to answer or otherwise respond by August 5.