A Potential Avenue For Bypassing Class Waivers In Arbitration Agreements

Recent court rulings under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) suggest that if a sexual harassment claim is included in a case, the entire case may bypass arbitration—even for unrelated claims like wage and hour violations. This development creates new risks for employers, as plaintiffs may use sexual harassment claims strategically to avoid arbitration.

What this means for employers: Employers should prepare for increased challenges to arbitration agreements, particularly in cases involving sexual harassment claims. Ensuring compliance with discrimination, harassment, and retaliation policies is essential to mitigate risks. Additionally, employers should closely review and update arbitration agreements to account for these evolving legal interpretations and consider alternative strategies to manage litigation exposure effectively.