Quick Hits
- In Elshabrowy v. Ali Awad Law, P.C., a federal district court recently adopted a magistrate judge’s conclusion that sexual harassment under the NYSHRL and NYCHRL includes unwelcome verbal or physical behavior based on a person’s gender, even if the conduct is not sexual or lewd in nature.
- Because the employee plausibly alleged a gender-based hostile work environment, the case qualified as a “sexual harassment dispute” under the EFAA, and the court denied the employer’s motion to compel arbitration of the entire case.
- Rather than treating sexual harassment as a narrow subset of gender discrimination, the decision suggests that many gender discrimination and hostile work environment claims involving verbal or physical conduct may be treated as sexual harassment claims that are exempt from arbitration.
Under the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), an employer cannot enforce an arbitration agreement in a case relating to a sexual assault dispute or sexual harassment dispute. The EFAA defines a “sexual harassment dispute” as a dispute relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal, or state law. The NYSHRL and the NYCHRL both prohibit gender discrimination, but neither statute expressly defines “sexual harassment” or says when gender-based discrimination rises to the level of sexual harassment.
Background on the Case
A Muslim woman of Arab descent worked remotely from her home in Queens, New York, for a personal injury law firm and an affiliated company from August 2024 until her termination of employment in October 2025. She alleged that after she began wearing a hijab to work in January 2025, a company executive expressed discomfort toward her hijab, stalled her projects, interfered with her administrative access at work, yelled at her, and called her and her team “incompetent.” After she told the CEO, she said the CEO called her “emotional” and suggested she needed to accept typical male “aggressive” behavior from the executive.
After she raised her concerns again, the executive allegedly cursed at her, told her she was “embarrassing” herself, and said, “You’re not the most intelligent person in the room”—comments she alleged he did not direct toward male employees. She also alleged that she was excluded from company-organized carpools to Friday prayers that were routinely offered to Muslim men. She filed a formal complaint with human resources in June 2025, alleging repeated verbal abuse and harassment. She alleged that HR did not respond to or investigate her complaint, and the employer terminated her employment several months later.
In December 2025, the former employee sued in New York State Supreme Court, Queens County, alleging gender and religious discrimination under the NYCHRL and NYSHRL, as well as state law tort claims of defamation and intentional infliction of emotional distress. The employer removed the case to federal court and moved to compel arbitration under the employee’s employment agreement. The employee argued that the EFAA barred arbitration because she alleged sexual harassment under state and local law. The employer responded that, even if her allegations were true, they did not plausibly allege sexual harassment under either law.
The Magistrate Judge’s Recommendation
The magistrate judge assumed, without deciding, that the arbitration agreement would otherwise be enforceable and focused on whether the employee had plausibly alleged sexual harassment—the same plausibility standard used to decide a motion to dismiss.
The magistrate judge relied on guidance from the New York City Commission on Human Rights, which defines sexual harassment as “unwelcome verbal or physical behavior based on a person’s gender” and does not require that the conduct be sexual in nature. The court pointed to the Second Circuit’s long-standing recognition that a hostile work environment claim requires neither “sex-specific and derogatory terms” nor evidence that “sexual desire” motivated the harassment. If sexual harassment need not be sexual under Title VII of the Civil Rights Act of 1964’s more demanding framework, the court reasoned, it need not be sexual under the more liberally construed NYSHRL and NYCHRL.
The magistrate judge found the employee’s allegations plausibly alleged “unwelcome gender-based conduct” that subjected her to inferior “terms, conditions, or privileges of employment.” Therefore, the case involved a “sexual harassment dispute” under the EFAA, and the magistrate judge recommended that the motion to compel arbitration be denied.
The magistrate judge cautioned that not every allegation of gender-based mistreatment amounts to sexual harassment, even under the broader sexual harassment definition. For example, the alleged exclusion from the prayer carpools and the alleged interference with the plaintiff’s work were neither physical nor verbal and would not, standing alone, constitute sexual harassment.
Neither party filed objections to the report and recommendation. On October 20, 2026, U.S. District Judge Hector Gonzalez reviewed the recommendation for clear error, adopted it as “well-reasoned,” and denied the employer’s motion to compel arbitration.
Next Steps
This decision illustrates that sexual harassment is not limited to sexual advances, sexual comments, or lewd conduct. Instead, gender-based hostile work environment claims involving verbal or physical conduct—such as demeaning comments, insults, yelling, or gender stereotyping—may qualify as sexual harassment under the NYSHRL and NYCHRL. In practice, this may turn the traditional understanding on its head: rather than sexual harassment being a narrow subset of gender discrimination, many general gender discrimination claims may now be viewed as sexual harassment claims.
Despite the ruling in Elshabrowy, courts in New York remain divided on this issue. Employers with operations in New York may wish to review their arbitration agreements and dispute resolution strategies with the understanding that gender-based hostile work environment claims may not be arbitrable. Employers may wish to promptly investigate harassment complaints and train managers that demeaning, gender-based comments—even those with no sexual content—may be treated as sexual harassment under state and local law.
Ogletree Deakins’ Arbitration and Alternative Dispute Resolution Practice Group and Diversity, Equity, and Inclusion Compliance Practice Group will continue to monitor developments and will post updates on the Arbitration and Alternative Dispute Resolution, Diversity, Equity, and Inclusion Compliance, Employment Law, and New York blogs as additional information becomes available.
Leslie A. Lajewski is a shareholder in Ogletree Deakins’ Morristown office.
This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.
Follow and Subscribe
LinkedIn | Instagram | Webinars | Podcasts
