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Louis Vuitton Argues for Arbitration Despite #MeToo New York Law (Corrected)

Aug. 2, 2019, 7:21 PM; Updated: Sept. 6, 2019, 8:54 PM

High-end retail conglomerate Louis Vuitton Moët Hennessy told a New York state court that a female in-house attorney can’t pursue her sexual harassment claims in open court but instead must move to arbitration. The company also wants her to pay for legal fees for bringing the claim outside of the private dispute process.

Andowah Newton, vice president of legal affairs and litigation at LVMH, the French fashion company that owns brands such as Dior, Marc Jacobs and Fendi, previously filed a lawsuit in New York Supreme Court against the company for allegedly retaliating against her when she complained about harassment by a senior manager in the New York office. She alleges that he made inappropriate comments or sexual gestures at her and attempted to kiss her over a three-year period.

Newton’s attorneys previously asked the judge to consider her case under the New York state law that carves out an exception, even if a company and a worker sign an arbitration agreement, in cases of sexual harassment. Newton is represented by Pierce Bainbridge Beck Price & Hecht LLP.

A slew of states have proposed legislation that aimed to limit arbitration as an attempt to tamp down on sexual harassment in the workplace in the #MeToo movement era. Meanwhile, the U.S. Supreme Court has issued rulings in recent years that bolster the power of these contracts.

On Aug. 1, Winston & Strawn LLP attorneys representing LVMH told the judge to consider a recent court ruling by another New York court, in which the court sided with Morgan Stanley in a dispute over an arbitration agreement. In that case, the judge said despite the state law that carves out limits to arbitration agreements, the Federal Arbitration Act still holds power.

Newton pushed for her case to be considered outside of arbitration, instead. She argues that the New York state law is not preempted by the FAA because it applies to contracts forcing sexual harassment victims to arbitrate their claims, which aren’t “transactions involving interstate commerce.” That would mean, the attorneys argue, that such harassment claims wouldn’t fall under the federal law’s jurisdiction. They note that no state court has yet considered the question.

“Ms. Newton’s claims, for example, relate to sexual assault and harassment she experienced in the state of New York. All parties to this case were in New York at the time of Ms. Newton’s sexual harassment and assault and all conduct relating to Ms. Newton’s claims occurred in New York,” the attorneys argue. “Thus, to the extent Ms. Newton’s arbitration agreement provides for forced arbitration of her sexual harassment and assault claims, it is outside the scope of the FAA. That agreement, and Ms. Newton’s claims, have no relationship to a transaction involving interstate commerce.”

The case is Newton v. LVMH Moet Hennessy Louis, N.Y. Sup. Ct., No. 154178.

(Corrects title of the employee in second graph.)

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editors responsible for this story: Phil Kushin at pkushin@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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