A recent decision by the United States Court of Appeals for the Second Circuit clarified the reach of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”), with significant implications for employers in New York, Connecticut, and Vermont seeking to enforce arbitration agreements.
On September 30, 2026, in Diaz-Roa v. Hermes Law, P.C.,[i], the Second Circuit held that when an employee properly invokes the EFAA, a pre-dispute arbitration agreement is unenforceable as to the entire lawsuit, not just the sexual harassment or sexual assault claims. That means other claims brought in the same lawsuit – even claims entirely unrelated to sexual harassment or sexual assault – must also proceed in court rather than arbitration.
Enacted in March 2022, the EFAA amended the Federal Arbitration Act (“FAA”) to allow individuals alleging sexual harassment or sexual assault claims to elect to invalidate pre-dispute arbitration agreements and pursue their claims in court. The EFAA provides that such agreements are unenforceable with respect to a “case” that relates to a sexual harassment or sexual assault dispute.
But one important question left unanswered by the EFAA was what happens when an employee brings sexual harassment or sexual abuse claims alongside other, unrelated claims? Is the entire arbitration agreement invalidated, or does the EFAA only extend to the harassment and abuse claims, meaning that all other claims can be subject to...
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