Accessibility Tools

Skip to main content

Federal Judge Denies Arbitration in Entire Case Where the Employer Failed to Exempt Sex Harassment Claim from Arbitration

Written on .

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) barred arbitration agreement provisions that required employees to arbitrate sexual assault/harassment claims.  Most thought this law would simply remove those particular claims from overbroad arbitration agreements while allowing other claims in the case to proceed to arbitration.  However, a New York federal judge has applied the law very broadly, by ruling: "The Court construes the EFAA to render an arbitration clause unenforceable as to the entire case involving a viably pled sexual harassment dispute, as opposed to merely the claims in the case that pertain to the alleged sexual harassment."  Johnson v. Everyrealm, Inc. (S.D. N.Y, 2023).

Editor's Note - Plaintiff lawyers favor court litigation over arbitration because they believe that juries offer a better potential for sympathetic and large plaintiff verdicts.  This court ruling makes it likely that plaintiffs' lawyers across the country will try to add some type of sexual assault/harassment claim in court filings where they are aware that the employer has arbitration agreements requiring arbitration of employment claims.  Plaintiffs' lawyers may attempt to add frivolous sexual harassment claims to more viable claims in order to try to evade enforcement of a mandatory arbitration agreement for the entire lawsuit. 

It is likely that the Johnson case will be appealed and possibly reversed, because courts have interpreted the Federal Arbitration Act (FAA) to strongly favor upholding arbitration agreements.  This decision nevertheless represents a danger to employers wanting to enforce mandatory arbitration agreements.  Employers should expedite the review and amendment of their employment agreements to expressly exempt sex assault/harassment cases from the mandatory arbitration process.  This will ensure that claims not involving sexual assault/harassment can proceed to individual arbitration rather than ending up in court and a potential jury ruling. 

This article is part of our May 2023 Newsletter.

View newsletter online

Download the newsletter as a PDF

Related Content

Get Email Updates

Receive newsletters and alerts directly in your email inbox. Sign up below.
From the historic bronze doors at Los Angeles City Hall.

NLRB to Seek Rescission of past Discipline Imposed under Overbroad Employer Work Rules

In a memo issued during April, NLRB General Counsel Jennifer Abruzzo announced that when the NLRB seeks to rescind overbroad and thus ill...
dashcam

Do Drive Cam Cameras inside Trucks Violate Employee Rights?

As a safety measure, many employers with driver employees have installed cameras inside the cab to alert drivers and monitor their safe d...
amazon app, mobile phone, table, indoors

Amazon Considers Risk When Investigating Employee Misconduct

In a legal conference in March, Amazon Corporate Counsel Lee Langston stated that aggressive enforcement actions of the NLRB have impacte...
Person signing a contract

Latest NLRB Attack Goes beyond Non-Compete Agreements to Reach Outside Employment

An interesting article concludes that the NLRB is invalidating employer rules "one clause at a time."  On January 31, 2024, the NLRB's Di...
black lives matter painted on a wall

NLRB Board Addresses BLM Insignia at Work

In a February 21, 2024 ruling, the NLRB reversed an administrative law judge's conclusion that writing "Black Lives Matter" (BLM) on apro...
indoors, workplace

Walk-Around Rule Allowing Union Reps to Accompany Safety Inspectors to Go into Effect

The U.S. Occupational Safety and Health Administration (OSHA) released its "Walk-Around Rule" in April, to take effect on May 31, 2024.  ...