Courts Weigh How Broadly to Apply Federal Arbitration Act Amendment

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), enacted in 2022, created a rare exception to the Federal Arbitration Act by invalidating mandatory arbitration clauses for sexual assault and sexual harassment claims. The law also makes clear that courts — not arbitrators — have the authority to determine whether the EFAA applies and whether a predispute arbitration agreement is enforceable.

Courts, however, have wrestled with the EFAA’s scope, particularly regarding incidents that occurred before the law’s March 3, 2022, effective date. A growing circuit split on rulings has emerged. Most recently, the 6th U.S. Circuit Court of Appeals ruled that employees can avoid arbitration for pre-enactment claims, as long as they filed charges or lawsuits after the EFAA took effect. This decision aligns with similar rulings from the 2nd, 3rd, and 8th Circuits.

Courts are also grappling with the EFAA’s reach when additional claims are brought alongside allegations pertaining to sexual assault or sexual harassment claims. Although legislative debate suggested that the EFAA was narrowly focused, the law uses the word “case” — rather than “claim” — to describe which matters are exempt from mandatory arbitration. This language has left courts divided over whether other causes of action included in the same lawsuit are also shielded from arbitration under the EFAA.