In 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) became law. The EFAA allows a plaintiff who alleges conduct constituting sexual harassment or sexual assault in the workplace to bypass an arbitration agreement and go to court.
Recently, the United States Second Court of Appeals, in Diaz-Roa v. Hermes Law, P.C., joining the Sixth and Ninth Circuits, concluded that the EFAA allows an employee to avoid arbitration in any employment-related claims, as long as some of the claims involve sexual harassment or sexual assault. In Diaz-Roa, the employee/plaintiff asserted that she was the victim of unlawful harassment and that the employer “unlawfully terminated her employment to prevent her from exercising previously-issued stock options that she had earned during her employment.” The employer moved to compel arbitration of the claims unrelated to sexual harassment based on an arbitration agreement that the employee had previously signed. The Second Circuit of Appeals found that, based on the wording of EFAA, the entire case could stay in court. The Court found: “We hold that, when it is applicable, the EFAA enables a plaintiff to invalidate a pre-dispute arbitration agreement as to the entire lawsuit, rather than only the sexual harassment or sexual assault claims contained within that lawsuit.”
If your company uses arbitration agreements with employees, be aware that those agreements may be bypassed, even as to all claims, if there is a claim of sexual harassment or assault involved.
