Labor & Employment Developments Blog

Many employers include mandatory arbitration agreements as a standard part of onboarding, expecting that workplace disputes will be resolved outside of court. A recent decision from the Sixth Circuit, however, underscores an important—and expansive—limitation on those agreements when sexual harassment is alleged.

In Bruce v. Adams and Reese, LLP, decided February 25, 2026, the Sixth Circuit (which covers Tennessee, Kentucky, Ohio, and Michigan) became the first federal appellate court to interpret the scope of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the "EFAA"). The EFAA, which amended the Federal Arbitration Act, provides that when a person alleges conduct constituting a sexual harassment or sexual assault dispute, that person may elect to have the matter heard in court rather than be bound by a predispute arbitration agreement. In short, the law was designed to "restore access to justice for millions of victims of sexual assault or harassment who are currently locked out of the court system and are forced to settle their disputes against companies in a private system of arbitration".

The central question in Bruce was whether the EFAA's protection extends only to the sexual harassment claim itself, or to the plaintiff's entire case—including claims unrelated to sexual harassment. The plaintiff, a former paralegal, brought both a Title VII hostile-work-environment claim based on persistent sexualized comments by a supervisor and separate Americans with Disabilities Act claims related to her employer's alleged failure to accommodate her medical conditions. Her employer moved to compel arbitration of the ADA claims, arguing that the EFAA should apply only to the sexual harassment claim.

The Sixth Circuit disagreed. The Court focused on the EFAA's use of the word "case" rather than "claim," finding that the statute renders a predispute arbitration agreement unenforceable "with respect to" the plaintiff's entire case—not merely individual claims within it. The Court noted that Congress knew how to use the word "claim" and deliberately chose broader language, and that reading the statute to apply only to specific claims would render key statutory language superfluous. The Court further observed that Congress could have copied narrower language from existing whistleblower-protection statutes had it intended a claim-by-claim approach, but chose not to do so. 

This ruling is significant for employers. It means that when an employee raises a plausible sexual harassment claim alongside other workplace claims—whether based on disability, retaliation, wage disputes, or otherwise—the employer may be unable to compel arbitration of any of the claims. The Court acknowledged the employer's concern that plaintiffs might use the EFAA to circumvent arbitration agreements but was unpersuaded, noting that this interpretation had prevailed in district courts across the country for years without apparent abuse. Now that this interpretation has been adopted by a Circuit Court, however, employers may reasonably be concerned that the decision creates incentives for artful or even sham pleading and may introduce additional uncertainty into the enforceability of arbitration agreements.

Employers should take this opportunity to review their arbitration agreements and dispute resolution procedures with counsel. While arbitration remains enforceable in many contexts, the Sixth Circuit's decision makes clear that a single sexual harassment allegation can open the courthouse doors for an employee's entire case. The KMK Labor & Employment team is available to assist employers in evaluating the impact of this decision on their existing agreements and workplace policies.