& Securities

As a result of various Supreme Court decisions over the past decade affirming the breadth and scope of the Federal Arbitration Act (“FAA”), many employers have rolled out mandatory pre-dispute arbitration programs for their employees to cover any employment-related disputes.

However, in the wake of the #MeToo movement, such agreements have drawn scrutiny from lawmakers, who are concerned that they may perpetuate sexual harassment in the workplace. Remedial legislation soon followed, including the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFAA”), which President Biden signed into law last year, carving out from mandatory arbitration any cases relating to a sexual harassment dispute.

As case law has begun to develop, employers may be surprised to learn that non-sexual harassment claims paired with sexual harassment claims may all be carved out from arbitration, regardless of whether the gravamen of the action relates to issues wholly unrelated to sexual harassment.

In this alert, we discuss the impact of the EFAA on the FAA, assess how several recent court decisions have interpreted the EFAA’s scope, and highlight important take-aways for employers.

View the Employer Update here.