Archive for the ‘Arbitration Agreement Unenforceable’ Category

FAA § 1 | Silva v. Schmidt Baking Distribution, LLC: Second Circuit Rejects Bakery’s Creative Bid to Avoid Drivers’ FAA Section 1 Exemption

January 10th, 2026 Arbitration Agreement Unenforceable, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Businessperson's FAQ Guide to the Federal Arbitration Act, FAA Chapter 1, FAA Section 1, FAA Section 4, FAA Transportation Worker Exemption, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 1, Federal Arbitration Act Section 4, Motion to Compel Arbitration, United States Court of Appeals for the Second Circuit No Comments »

FAA § 1Federal Arbitration Act (“FAA”) § 1 (“FAA § 1”) provides that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. In New Prime Inc. v. Oliveira, the Supreme Court held that, as of 1925, “contracts of employment” was not a term of art limited to employer-employee relationships, but a capacious phrase referring to agreements “to perform work,” including independent-contractor arrangements. 586 U.S. 105, 113–21 (2019). (Posts discussing FAA § 1, including New Prime, are here, here, here, here, & here.)

In Silva v. Schmidt Baking Distribution, LLC, No. 24-2103-cv, slip op. (2d Cir. Dec. 22, 2025), the U.S. Court of Appeals for the Second Circuit held that distribution agreements signed by single-worker corporate entities—entities the company required delivery drivers to form as a condition of keeping their routes—were “contracts of employment” within FAA § 1, so the FAA could not be used to compel arbitration. See Silva, slip op. at 2, 18–20.

The “transportation worker” exemption continues to generate litigation and businesses Continue Reading »

The EFAA—Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act: A Practical Overview

January 5th, 2026 Anti-Arbitration Statutes, Applicability of the FAA, Arbitrability, Arbitration Agreement Invalid, Arbitration Agreement Unenforceable, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Businessperson's FAQ Guide to the Federal Arbitration Act, Delegation Agreements, Delegation Provision, Drafting Arbitration Agreements, Employment Arbitration, FAA Chapter 1, FAA Chapter 2, FAA Chapter 4, FAA Section 1, FAA Section 2, FAA Section 401, FAA Section 402, Limitations on Arbitrability, Post-Dispute Arbitration Agreements, Practice and Procedure, Predispute Arbitration Agreements, Sexual Harassment and Sexual Assault Disputes, Uncategorized, United States Court of Appeals for the Second Circuit, United States District Court for the Southern District of New York No Comments »

EFAAIntroduction

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “EFAA”) is one of the most significant statutory changes to federal arbitration law in decades. Codified as Chapter 4 of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 401–402, the EFAA limits the enforceability of pre-dispute arbitration agreements in cases involving sexual assault or sexual harassment.

Narrow in subject matter but broad in consequence, it affects domestic and international arbitration agreements, overrides delegation clauses, alters who decides arbitrability, and raises difficult questions about timing, scope, and case management. Federal courts—including circuit courts of appeals—have already begun to grapple with these issues, and more appellate guidance will likely be forthcoming.

This post provides a high-level overview of (1) what the EFAA says, (2) how it works in practice, and (3) the key issues courts have addressed so far, without extensive case-by-case discussion and analysis.

What the EFAA Says

 

EFAA Covered Agreements and Covered Disputes

The EFAA applies to two types of contractual provisions:

  1. A “Predispute arbitration agreement,” which is an “agreement to arbitrate a dispute that had  not yet arisen when the agreement was made,” 9 U.S.C. § 401(1); and
  2. A “Predispute joint-action waiver,” which is an “agreement, whether or not part of a predispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not yet arisen at the time of the making of the agreement[,]” id. § 401(2).

The statute applies only if the dispute qualifies as either a “sexual assault dispute,” which is defined by reference to 18 U.S.C. § 2246 or similar state or tribal law, id. § 401(3); or a “sexual harassment dispute,” which is defined broadly as a dispute “relating to conduct alleged to constitute sexual harassment under applicable Federal, Tribal, or State law,” id. § 401(4).

The definitions of sexual harassment and assault  are intentionally expansive and incorporate the relevant substantive law governing the claim.

EFAA Operative Rule

Section 402(a) is the statute’s principal substantive command: Continue Reading »