As many are aware, Congress enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”) on March 3, 2022 (the “Effective Date”). The EFAA generally renders pre-dispute arbitration agreements unenforceable (at the employee’s option) to the extent they require arbitration of sexual assault or sexual harassment claims. By its terms, however, it only applies to a dispute or claim that arises or accrues ON OR AFTER the Effective date.
Last month, the U.S. Court of Appeals for the Second Circuit (CT, NY and VT) denied an employer’s motion to compel arbitration in a case involving claims of sexual harassment even though the original motion to compel arbitration was already pending before the Effective Date of the EFAA. The Court reasoned that the harassment claims could not be compelled to arbitration because they included allegations of continuing violations, which allegedly continued after the Effective Date (the plaintiff moved to amend her complaint after the enactment of the EFAA to add additional harassment allegations).
This decision is an important reminder that statute of limitations for sexual harassment claims may be significantly extended when continuing violations are alleged, and facts and incidents outside of the statute of limitations may still be included in a lawsuit when there is a “continuing violation.” The case is also a reminder to employers of the existence of the EFAA and that employers may not be able to compel arbitration of certain employment disputes.
The decision is available here: USCOURTS-ca2-23-00658-0.pdf