Understanding The Sixth Circuit's Decision In Bruce v. Adams & Reese, LLP: A Landmark Interpretation Of The EFAA

The Sixth Circuit's recent decision in Bruce v. Adams & Reese, LLP (No. 25-5210) provides critical guidance on the application of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). This case clarifies the pleading standards for hostile work environment claims under Title VII, but also, and more importantly, establishes a significant precedent regarding the scope of the EFAA's arbitration bar.

In the wake of the “me-too” movement, Congress enacted the EFAA in an effort to prevent employers facing civil litigation alleging sexual harassment or assault from forcing those claims into confidential arbitration, rather than the public court system. Specifically, the EFAA provides, “at the election of the person alleging conduct constituting a… sexual harassment dispute… no predispute arbitration agreement… shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the… sexual harassment dispute.” That left an important question open, however: if a single lawsuit alleged both a sexual harassment claim and some other claim that was not subject to the EFAA's arbitration bar, could the non-barred claims still be forced into arbitration, leaving the harassment or assault claims to be litigated in public?

The Sixth Circuit dealt with that issue directly in Bruce. There, the Plaintiff signed an arbitration agreement agreeing to submit all claims against her employer to binding arbitration. After she was terminated, the Plaintiff sued over sexual harassment (hostile work environment) and two alleged ADA violations. Her former employer moved to dismiss the sexual harassment claim and moved to compel arbitration of the ADA claims. The District Court denied both motions, and the employer appealed to the Sixth Circuit.

The Court of Appeals first found that the Plaintiff had alleged sufficient factual content from which a court could draw a reasonable inference that she was subjected to a hostile work environment. Because the Complaint outlined a consistent pattern of sexualized jokes and comments directed at Plaintiff, a paralegal, by a lawyer at her law firm, it was plausible that a young female paralegal would be humiliated and intimidated by the alleged conduct. Accordingly, the Court of Appeals affirmed the District Court's denial of the employer's motion to dismiss the sexual harassment claim.

The Court next turned to the employer's contention that the Plaintiff's ADA claims were susceptible to binding arbitration and did not fit into the EFAA's bar on forced arbitration of sexual harassment disputes. The Court disagreed with the employer, noting the operative word from the EFAA is “case.”

The Court's interpretation of the EFAA was a pivotal aspect of its decision. The EFAA prohibits the enforcement of pre-dispute arbitration agreements in cases involving sexual harassment or assault disputes. The Sixth Circuit held that the EFAA's bar applies to an entire “case” that includes a sexual harassment claim, not just to the specific claim itself. This interpretation was grounded in the plain language of the statute, which states that arbitration agreements are unenforceable “with respect to a case” that “relates to” a sexual harassment dispute.

The Court reasoned that Congress's use of the term “case” rather than “claim” was deliberate and reflected an intent to shield plaintiffs from the inefficiencies and burdens of litigating related claims in separate forums. As a result, Bruce's ADA claims, which were part of the same case as her sexual harassment claim, could not be compelled to arbitration.

This decision is one of the first appellate interpretations of the EFAA, and it establishes that the statute's protections extend to all claims within a case that includes a sexual harassment or assault dispute. This broad application ensures that victims of workplace harassment can pursue their claims in Court without being forced into arbitration for related claims. Employers should carefully review their arbitration agreements in light of this decision. The ruling underscores the importance of understanding the EFAA's limitations and the potential for entire cases to be excluded from arbitration if they involve sexual harassment or assault claims.

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