Today, the Second Circuit heard oral arguments in a significant case about interpretation of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) — the 2022 law that allows individuals alleging sexual harassment to opt out of pre-dispute arbitration agreements.
This is only the second time the Second Circuit has considered the EFAA, with the court’s first foray providing a relatively narrow decision holding that retaliation claims based on reports of sexual harassment qualify as “sexual harassment disputes” under the Act and ruling that the continuing violation doctrine may apply in situations where some allegations pre-date the law’s effective date.
The case heard today presents a far broader set of unresolved questions that have divided district courts nationwide. Chief among them: must a plaintiff “plausibly plead” a sexual harassment claim under the Federal Rules of Civil Procedure standard to invoke the EFAA, or do bare allegations on the face of the complaint suffice? The court may also address whether “sexual harassment” under the EFAA requires conduct that is sexual or lewd in nature — or whether it encompasses broader state and local law definitions, like the NYCHRL’s “treated less well because of gender” standard.
Whatever the Second Circuit decides, its opinion will be the most significant appellate guidance on the EFAA to date, with major implications for employers, employees, and anyone navigating the enforceability of arbitration agreements in harassment-related disputes.