New law pushes harassment cases to court

On March 3, 2022, President Joe Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), amending the Federal Arbitration Act (FAA). The Act allows employees to file sexual harassment and sexual assault disputes in court even if they have previously agreed to arbitration. The language in the Act provides:
No predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and related to sexual assault dispute or the sexual harassment dispute.
At the time, concerns were raised that the language of the Act would bring not just sexual harassment or sexual assault claims into courts but also all the other claims that may also be present in a case.

In two separate cases, U.S. District Court Judge Paul A. Engelmayer ruled in February on the impact the new act has on sexual harassment litigation. In Johnson v. Everrealm, the judge held the statute precluded arbitration of a former employee’s sexual harassment claims as well as other allegations. He found that the EFAA’s statutory text says it invalidates arbitration clauses “with respect to a case” filed under federal, state, or tribal sexual harassment law. According to the judge, “a case” refers to the whole lawsuit, rather than the separate claims involved. In the second case, Yost v. Everyrealm Inc., Judge Engelmayer dismissed the sexual harassment claims, saying the EFAA was no longer relevant to the motion to compel arbitration because the sexual harassment claims must be actionable for the EFAA to come into play.