A former employee can pursue all her claims in court against a Dallas-based law firm, not just her sexual harassment claim, even though she signed a pre-dispute arbitration agreement. The 2nd US Circuit Court of Appeals confirmed yesterday that a federal law aiming to protect sexual harassment and assault victims allows employees with such claims to bypass arbitration for the entire lawsuit. This is the latest of several court rulings that reached similar conclusions. Here’s what employers nationwide need to know about the ruling and three steps you should consider taking now.
Refresher on the Federal Law at Issue
A federal law seeking to end forced arbitration of sexual harassment and sexual assault disputes allows the person alleging the misconduct to take their claim to court even if they signed a pre-dispute arbitration agreement. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which was signed into law in 2022, amended the Federal Arbitration Act (FAA) and broadly defines a “sexual harassment dispute” as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” For a detailed summary of the law, read our comprehensive FAQs here.
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