In 2021, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (commonly abbreviated as EFAA). The law amended the Federal Arbitration Act to carve out an exception to mandatory arbitration agreements that prevented employees from litigating harassment and assault claims in open court. Last week, the Sixth Circuit Court of Appeals (which includes Tennessee) held that the statute applies to other claims contained in a lawsuit alleging sexual harassment or assault.

In Bruce v. Adams & Reese LLP, a law firm employee filed suit against her employer, alleging that she has been subjected to sexual harassment and discriminated against due to her disability in violation of the Americans with Disabilities Act. The employer moved to stay the ADA claims and subject them to a mandatory arbitration agreement signed by the employee.

In a 2-1 decision, the Sixth Circuit concluded that the 2021 statute applies to all claims in lawsuits alleging sexual harassment or assault. Congress did not intend that aggrieved employees would have to bifurcate their suits, pursuing some in court and others through arbitration. The dissenting judge believed that the plaintiff’s harassment claims did not meet the legal definition of a hostile work environment, but the judge did not reach the question of bifurcation.

This decision probably has limited impact for employers. While it is possible that a plaintiff could include sexual harassment claims in order to evade a mandatory arbitration agreement, doing so without a viable factual basis for such claims would create litigation risks too high for most litigants and their legal counsel.

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