6th Circuit limits enforceability of arbitration agreements in sexual harassment cases

In a significant decision, the U.S. 6th Circuit Court of Appeals (whose rulings apply to employers in Midsouth states Kentucky and Tennessee, as well as Michigan and Ohio) has recently held that a single sexual harassment allegation—if plausibly pleaded—may prevent enforcement of an otherwise-binding arbitration agreement for all claims in a lawsuit, including unrelated claims such as discrimination or retaliation. Specifically, the 6th Circuit adopted a broad interpretation of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), concluding that the statute can render an arbitration agreement unenforceable for an entire case, not just the sexual harassment claim itself.

Facts

Randi Bruce, a former paralegal with the law firm Adams & Reese, LLP, filed disability discrimination, retaliation, sexual harassment, and hostile work environment claims against her former employer, claiming it had violated Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA). 

Although Bruce had signed a broad arbitration agreement covering all employment-related claims upon hire, the law firm sought to compel arbitration only of the ADA claims, acknowledging that the sexual harassment claim could proceed in court under the EFAA, which prohibits sending sexual harassment cases to arbitration rather than litigating them in open court. It also asked the court to dismiss the sexual harassment claim under Rule 12(b)(6).