How a 2022 Law Is Complicating Sexual Harassment Claims

Key Takeaways

• 6th Circuit says EFAA blocks arbitration for entire lawsuit, not just harassment
• Interpretive split persists over whether 'sexual harassment' includes broader sex‑based conduct
• Employers may face class actions if a single harassment claim voids arbitration
• Supreme Court likely to resolve EFAA’s scope, creating nationwide uniformity

Pulse Analysis

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act was introduced to correct a long‑standing imbalance where employers could compel employees to resolve harassment claims behind closed doors. By amending the Federal Arbitration Act, the statute renders any pre‑dispute arbitration clause unenforceable when a case contains allegations of sexual harassment or assault. Proponents argued that this would increase transparency, empower victims, and deter misconduct, while critics warned it could flood courts with litigation. Understanding the law’s original intent is essential for interpreting its reach in today’s employment disputes.

Since its enactment, courts have grappled with two thorny issues: whether the EFAA voids arbitration for the entire case or merely the sexual‑harassment claims, and how broadly “sexual harassment” should be read. The Sixth Circuit’s February 2026 ruling in Bruce v. Adams and Reese adopted a broad reading, holding that any covered claim strips the arbitration agreement of force for all claims in the suit. By contrast, California and other jurisdictions have limited the exemption to the specific harassment claims, creating a patchwork of outcomes that leaves employers uncertain about exposure to class‑wide wage‑hour or collective‑action suits.

Legal analysts expect the Supreme Court to take up the EFAA’s scope, which would deliver a uniform rule on both the “case” language and the definition of harassment. Until that decision arrives, risk‑averse companies are revising arbitration clauses, adding explicit carve‑outs, and training counsel to argue for a narrow construction. Meanwhile, employee advocates are increasingly bundling harassment allegations into wage‑hour or discrimination class actions to exploit the broader reading. The eventual resolution will shape the balance between protecting victims and preserving the efficiency of arbitration in the workplace.