All-In #MeToo Law Ruling Could Prove Durable in Absence of Split

Fixing on legislators’ word choice when they wrote the law, a US appeals court last week became the first to say workers bringing sexual harassment claims can keep their entire lawsuit out of arbitration and in the public eye.

“Congress could easily have drafted the EFAA to protect only sexual harassment claims and sexual-assault claims themselves from forced arbitration,” yet lawmakers opted for the more inclusive “case” over “claim,” the US Court of Appeals for the Sixth Circuit said. Its Feb. 25 first impression ruling on the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act doesn’t bind other circuits, but management and labor-side lawyers agree it’s a handy roadmap.

The “language is pretty clear,” employer-side attorney Anthony Oncidi of Proskauer Rose LLP said. “I don’t think that’s what Congress meant, but that’s what Congress wrote.”

Congress passed the #MeToo-inspired EFAA in 2022, addressing bipartisan concerns that arbitration and nondisclosure agreements made it easier for businesses to keep assault and harassment victims quiet, enabling perpetrators and their actions to continue. Since then, federal trial and appellate courts have wrestled with questions about lawsuit timing, what workers must allege to invoke the opt-out, and whether it applies to their whole case, not just the harassment or assault portion.

The Sixth Circuit’s 2-1 decision lets former Adams & Reese paralegal Randi Bruce keep her disability bias claims against the firm in court alongside sexual harassment allegations. It also backs up lower court decisions similarly applying the arbitration avoidance law.

The US Supreme Court has yet to weigh in.

Congress “wanted survivors of sexual harassment and sexual assault to be able to bring their claims in court, and really the only way to effectuate that, as the Sixth Circuit pointed out, is to allow them to bring their whole case together,” said Shelby Leighton of Public Justice. Employers could “take it up with their representatives in Congress, but I think in terms of what the statute does, it’s operating the way it was designed to.”

First Impression

In Bruce v. Adams & Reese LLP, the majority examined the EFAA’s proscription that arbitration agreements aren’t enforceable “with respect to a case” filed under US, tribal, or state law relating to workplace sexual harassment or assault.

“All data point clearly in the direction of ‘case’ encompassing a plaintiff’s entire suit,” the majority said, noting Congress could have chosen to use “claim” instead or otherwise inserted limiting language.

“The court was right that the text of the EFAA is really clear,” Leighton said, calling the outcome “really a great result” that makes it hard for employers to compel arbitration.

The issue is “really common” because “people often do have intersectional discrimination claims,” stemming from the same supervisors’ actions, “so it makes sense that you would want them to be able to bring those” in court together, she said.

The majority is “really thorough” in “explaining how it reaches the result,” said Indiana University law professor Deborah Widiss.

Even the dissent didn’t take issue with their statutory interpretation. Instead, it argued that the worker didn’t plausibly allege sexual harassment, so she doesn’t have an EFAA hook to avoid arbitrating her other claims.

Making EFAA invocation harder might be “a way to sort of cut the Gordian knot,” said Markowitz Herbold PC’s Laura Salerno Owens. Judges who think the EFAA is too broad or otherwise disagree with it “then don’t have to necessarily disagree on the statutory interpretation because the parties don’t even cross the initial threshold” of having a viable sexual harassment or assault claim.

Remaining Questions

While the law “very much arose from the #MeToo movement,” since its passage “there’s been a bit of a pendulum swing in the other direction,” Salerno Owens said, referencing a recent push to recruit White men for reverse bias cases. That swing could leave room for a circuit split to get the law in front of the justices.

The Sixth Circuit took a strict constructionist approach to the law, which probably makes Supreme Court review less likely, said employer-side attorney Greg Reilly of FordHarrison LLP. The conservative justices tend to like that approach, and the liberal justices “probably would go along” because of the law’s policy goals, he added.

As yet, there’s no split to resolve. The Second Circuit considered the “entire case” issue in two recent appeals but has yet to rule. The issue is also pending at the Ninth Circuit.

“The fact that the district courts have been so in alignment on this question makes me think that the circuit courts will probably also be in alignment,” Leighton said. The justices will probably take up EFAA interpretation eventually, “but I’m not sure that it’ll be this issue, just because this does seem like one where courts are more in agreement.”

There’s less agreement over whether worker allegations must be plausible or merely non-frivolous to avoid arbitration. The Sixth Circuit majority sidestepped the issue, saying Bruce cleared the higher bar and hadn’t asked the court to consider the lower one.

“If that continues to be as divisive in courts of appeals as it is in the district courts, I could certainly see that being an issue that the Court wants to take up,” Leighton said.

Avoidance First

In the meantime, employers can try to minimize litigation. One answer is to “avoid these claims in the first place,” Salerno Owens said. If employers “take prompt remedial steps once they find out about harassment, that can help beat a claim.”

Another is to lobby Congress.

Oncidi said he disagrees with the EFAAs “entire premise” because there’s nothing wrong with arbitration, but its text means employers will have a tough time getting a different result on the “entire case” issue “without an amendment to the language from Congress.”

“It’s not necessarily in anybody’s interest to be sort of pursuing half of a case in court and half of a case in arbitration,” said Widiss. “That’s a lot of extra work for all involved.”