In March 2022, Congress enacted the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act” (“EFAA”). The Act prohibits arbitration agreements requiring a plaintiff to arbitrate claims of sexual assault or sexual harassment. The EFAA became law on March 3, 2022.
The Act states that
“[N]o predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.”
9 USCS §402(a)
The EFAA applies to any claims that accrue or are brought on or after March 3, 2022. Id. (“This section is applicable to any dispute or claim that arises or accrues on or after March 3, 2022.”).
If a sexual assault or sexual harassment claim is made that falls under the protection of the EFAA, the arbitration agreement is unenforceable to all the parties’ claims. Watson v. Blaze Media LLC. 2023 U.S. Dist. LEXIS 135694, at *5 (N.D. Tex. Aug. 3, 2023) (“If a plaintiff alleges a sexual harassment dispute, a predispute arbitration agreement is unenforceable as to the entirety of the case relating to the sexual harassment dispute, not merely the discrete claims in that case that themselves either allege such harassment or relate to a sexual harassment dispute.”).
Cases construing the new law are relatively scant, especially in Texas. Though opinions that do exist showcase the teeth of the new statute. For example, In Watson v. Blaze Media LLC, the Northern District of Texas held that an employee who had alleged sexual harassment by her employer was protected by the Act, rendering her arbitration agreement unenforceable. 2023 U.S. Dist. LEXIS 135694, at *13.
Likewise, another court outside of Texas reached the same conclusion in Betancourt v. Rivian Auto, LLC. 2023 U.S. Dist. LEXIS 146190, at *16 (C.D. Ill. Aug. 21, 2023). There, the plaintiff alleged harassment that rose to the level of a hostile work environment over the course of a year. Given that there were “continuing violations” both before and after the Act took effect, the EFAA made all claims free from arbitration. Id.
The EFAA diverges from the overwhelming trend in favor of arbitration. The EFAA could be a sea-change statute, including in employment disputes involving allegations of sexual assault or harassment. As case law develops, we’ll continue to see the impact the carve-out has on this area of law, hopefully bringing greater accountability for those accused of sexual assault and harassment.
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