Federal Court Narrows Forced Arbitration in New Start Capital Harassment and Wage Case
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A group of former sales representatives sued their employer alleging sexual harassment, racial discrimination, disability discrimination, and unpaid wages — and when the company tried to force their claims into arbitration, a federal court drew careful lines about exactly who could take their case to open court and who could not.
Case: Lambert et al. v. New Start Capital LLC et al.
Court: U.S. District Court for the Southern District of New York
Case No.: 1:24-cv-08055
Get to Know the Plaintiffs: Lambert v. New Start Capital
Alana Lambert, Kimarah LeRouge, Erica Wiltz, and Omnaya Abouzaid all worked as sales representatives for New Start Capital, following up on leads to enroll clients in the company's debt settlement program. Lambert, a Black woman, was directly supervised by two white male managers and alleges she was subjected to relentless sexual harassment while her access to profitable sales leads was used as leverage. Abouzaid, who is of African race and Arab Egyptian national origin, was subjected to racially derogatory comments and discriminatory lead assignments — and was terminated the day after she reported Lambert's harassment to management. Wiltz, a Black woman with documented spinal conditions, was promised remote work accommodations that were denied once she started and was then pressured to resign.
Get to Know the Defendant: Lambert v. New Start Capital
New Start Capital LLC, formerly known as Titan Consulting Group, LLC, is a New York-based limited liability company that operates a debt settlement sales program. Individual defendants include Robert Russini, the company's chief operating officer; Dani Adelstein, vice president of sales; and Phil Stein, senior manager of financial consulting, who is alleged to have directed much of the harassment at the center of this lawsuit.
What Are the Allegations in the Complaint?
The plaintiffs' complaint, as summarized in the court's August 7, 2025 opinion, outlines an extensive pattern of alleged harassment, discrimination, retaliation, and wage theft. According to the court record:
● From the beginning of her employment, Stein sent Lambert sexually explicit and inappropriate text messages, gave her inappropriate gifts, made repeated sexual advances, and referred to himself as her "Sugar Daddy" or "Baby Daddy." On one occasion in September 2023, Stein took Lambert to a strip club where the evening escalated into explicitly sexual conduct. He also sent Lambert a photograph of himself in boxers
● Adelstein independently made sexually inappropriate remarks to Lambert, including calling her a "smoke show" in public speeches, asking her to "twirl" at a company dinner, telling her he had "raunchy dreams about her," and referring to her as a "hot model" to a male coworker
● Both Stein and Adelstein repeatedly reminded Lambert that they controlled her access to profitable leads, explicitly linking her compensation to her acquiescence to their conduct
● Lambert worked nearly 70 hours per week at Stein's demand but was paid for only 40. LeRouge and Abouzaid each worked approximately 50 hours per week but were also paid for only 40. Wage statements failed to reflect actual hours worked or overtime hours owed
● Abouzaid was assigned leads with "ethnic" names and denied leads with "white-sounding" names. Coworkers mockingly and derogatorily called her "Palestinian" or "the Palestinian" despite her being Egyptian, and management was aware of this conduct but failed to address it
● On April 11, 2024, Abouzaid told Adelstein not to appoint Stein as primary lead distributor, describing his conduct toward Lambert. The following day, Adelstein informed Abouzaid she was being terminated. When she attempted to leave, Adelstein and manager Andrew Murphy physically blocked the door. Two additional managers, Russini and Victor Bousso, then entered the room. Abouzaid stated aloud, "You're firing me for complaining about the sexual harassment of Alana Lambert." Murphy replied, "Naya, shut up. You need to grow up." The confrontation lasted approximately 20 minutes; Abouzaid was not permitted to leave until she asked if she was being detained
● After Abouzaid's termination, New Start conducted what the complaint characterizes as a "sham investigation." Stein deleted his messages before they could be reviewed, and the company made no effort to retrieve them. When Russini questioned Lambert about Stein's conduct in June 2024, no corrective action followed. Stein was "merely 'written up'" in July 2024 with no real consequences and continued his conduct toward Lambert
● After Lambert complained about Stein in June 2024, her leads became significantly less valuable. After she filed this lawsuit in October 2024, her leads "plummeted" further and Adelstein became openly hostile — slamming doors and speaking to her in an aggressive tone. Lambert was compelled to resign on November 4, 2024
● Wiltz was promised remote work as a condition of her accepting the position. When she requested early remote work accommodations due to her disability, Adelstein initially agreed, then reversed course the following day, stating the owner had decided she could not work remotely at any time. He told Wiltz that New Start had "had problems with people like her in the past," referencing another Black female employee. He then directed Wiltz to resign and dictated her resignation letter to her word for word. He later told Stein and a group of men that Wiltz had been hired as "eye candy"
What Was the Main Question in the Case?
The central legal question involved the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA): does the EFAA void the arbitration agreements of every plaintiff in a lawsuit once one plaintiff alleges sexual harassment, or does it apply only to the individual plaintiffs whose own claims relate to the alleged harassment? Judge Gregory H. Woods held that the EFAA applies only to the case of the person or persons alleging conduct constituting a sexual harassment dispute; it does not automatically shield co-plaintiffs whose claims have no connection to the alleged harassment.
Why Does the Case Matter to California Employees?
While this case was filed in New York, the EFAA is a federal law that applies nationwide, including to California employees.
● The ruling clarifies that the EFAA protects individual plaintiffs whose claims relate to alleged sexual harassment from forced arbitration, but does not automatically extend to co-plaintiffs whose claims are unrelated to the harassment
● California workers who sign arbitration agreements as a condition of employment should understand that federal law may allow them to pursue sexual harassment-related claims in court — but co-workers with unrelated wage claims filed in the same lawsuit may not receive the same protection
● The case illustrates how wage theft and sexual harassment can be deeply intertwined when a supervisor controls compensation through discretionary lead assignments tied to tolerating misconduct - a pattern California courts also recognize
● The door-blocking incident at Abouzaid's termination and the alleged sham investigation are stark examples of how retaliation can escalate quickly after an employee speaks up — and California workers who face similar conduct have some of the country's strongest legal remedies available to them
A Brief Overview of the Case
● December 2022: Lambert and LeRouge are hired at New Start Capital
● July 2023: Abouzaid is hired
● September 2023: Stein takes Lambert to a strip club
● October 2023: Wiltz is hired; she is later pushed out after being denied promised remote work accommodations and directed to resign
● April 11–12, 2024: Abouzaid reports Stein's conduct to Adelstein; she is terminated the following day in a confrontation in which managers physically blocked the exit for approximately 20 minutes
● June 2024: Russini questions Lambert about Stein's conduct; no corrective action follows; Lambert's lead quality begins to decline
● July 2024: Stein is written up with no meaningful consequences and continues the same behavior
● October 23, 2024: Lambert files the original complaint
● November 4, 2024: Lambert is compelled to resign after her leads plummet and Adelstein's conduct becomes openly hostile
● December 18, 2024: Plaintiffs file the First Amended Complaint
● March 7, 2025: Defendants move to dismiss and to compel arbitration
● March 21, 2025: Plaintiffs move to amend, adding proposed plaintiffs Matthew Jamele, Mladen Vasic, and Joseph Jacobs
● August 7, 2025: Judge Woods issues his ruling — Lambert's, Abouzaid's, Jamele's, and Vasic's claims are non-arbitrable under the EFAA; LeRouge's and Jacobs's claims are compelled to arbitration; Wiltz's state law claims are dismissed for lack of subject matter jurisdiction; fraudulent inducement claims are dismissed as duplicative; plaintiffs' motion to amend is granted
FAQs: Lambert v. New Start Capital
Q: What is the EFAA?
A: The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act is a 2022 federal law that allows employees alleging sexual harassment or sexual assault to void pre-dispute arbitration agreements and pursue those claims in court, rather than being forced into private arbitration.
Q: Does the EFAA protect every plaintiff in a multi-plaintiff lawsuit?
A: Not automatically. As this case shows, courts apply the EFAA only to plaintiffs whose own claims relate to alleged sexual harassment or assault. Co-plaintiffs whose claims have no connection to the alleged harassment may still be compelled to arbitrate under their signed agreements.
Q: Can I still sue my employer if I signed an arbitration agreement?
A: If your claim involves sexual harassment or sexual assault, the EFAA may allow you to pursue that claim in court despite a signed arbitration agreement. An employment attorney can evaluate whether your specific claims qualify.
Q: What counts as retaliation after reporting harassment?
A: Retaliation can include termination, demotion, reduced hours, worse assignments, lower commissions, or any other adverse action taken because an employee reported harassment or discrimination. As this case shows, it can also include more overt forms of intimidation.
Q: Can a supervisor's control over lead distribution or assignments be part of a harassment claim?
A: Yes. When a supervisor ties access to profitable leads or assignments — and by extension, commission-based pay — to tolerating inappropriate conduct, that compensation structure can itself become evidence of harassment and wage theft working in tandem.
Q: What should I do if I've been physically blocked from leaving a room or treated aggressively after raising a workplace complaint?
A: Document everything — who was present, what was said, and the exact sequence of events — and consult an employment attorney immediately. Physical intimidation during or after a termination may itself be actionable under California and federal law.
Facing Harassment or Retaliation at Work?
Lambert v. New Start Capital shows how harassment, retaliation, and wage violations can become deeply intertwined; and why understanding your rights around arbitration matters before anything else happens. Contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.
