Plausible Sexual Harassment Allegation Bars Arbitration

The US Court of Appeals for the Sixth Circuit has ruled that when a complaint plausibly alleges sexual harassment, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) can prevent arbitration of the entire case, not just the harassment claim.

The court held that the language of the EFAA renders arbitration agreements unenforceable in sexual harassment disputes. Because Congress used “case,” not “claim,” and “case” refers to the entire lawsuit, the court found that once a plaintiff plausibly alleges sexual harassment, the arbitration agreement cannot be enforced against any claims in that lawsuit, even those unrelated to sexual harassment.

WHY THIS IS IMPORTANT… If this position is adopted by other courts, it will prevent arbitration in any case where any claim is based on sexual harassment. The entire case will have to be tried in court.