Archive for the ‘Predispute Arbitration Agreements’ Category

Significant Developments in U.S. State Arbitration Law: the Virginia Arbitration Fairness Act

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Virginia Arbitration Fairness Act: Part I of a Two-Part Post

Virginia Arbitration Fairness Act

Virginia has enacted a targeted arbitration statute that is likely to generate FAA preemption litigation. Chapter 490, Senate Bill 227 (“SB 227”), signed into law on April 8, 2026, amends Virginia’s arbitration statute and adds a new Article 3 to Chapter 21 of Title 8.01, titled the “Arbitration Fairness Act.” 2026 Va. Acts ch. 490; Va. Code §§ 8.01-581.017-.021 (effective July 1, 2026). The Act “shall apply to all arbitration agreements entered into on or after July 1, 2026.” 2026 Va. Acts ch. 490, § 2.

The Act does not purport to prohibit consumer or employment arbitration. Nor does it seek to invalidate categorically pre-dispute arbitration agreements. It instead regulates “high-volume arbitration service providers,” prescribes arbitrator-selection procedures, imposes detailed disclosure obligations, restricts certain provider relationships, regulates invoices and fee payment, creates tolling rules, and authorizes civil remedies and State Corporation Commission penalties. It also adds a new state-law vacatur ground for an award “rendered by an arbitrator selected in violation of” the Act. Va. Code §§ 8.01-581.010(6), 8.01-581.017-.021. That last provision, combined with the disclosure requirements, is a significant consideration in, among other things, evident partiality disputes, and exceeding-powers challenges based on violation of the Act’s provisions concerning  arbitrator selection. Continue Reading »

Arbitration and Sexual Harassment Disputes: The Sixth Circuit Adopts the EFAA Entire-Case Rule in Bruce v. Adams & Reese

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Introduction: Under the EFAA a Covered Sexual Harassment Dispute May Render the Entire Case Non-Arbitrable

Sexual Harassment Disputes and the EFAA | U.S. Court of Appeals for the Sixth CIrcuitThe presence of a sexual harassment claim in a case featuring otherwise arbitrable claims may mean that Chapter 4 of the FAA renders the entire case non-arbitrable. In our recent overview of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of  2021 (the “EFAA”),  we identified the statute’s arguably most consequential open question: when a complaint includes a covered sexual-harassment dispute and non-covered claims, does the EFAA keep the whole lawsuit in court, or only the harassment claim, thereby effectively bifurcating the dispute-resolution process?

The U.S. Court of Appeals for the  Sixth Circuit recently  answered that controversial open question, becoming the first U.S. Circuit Court of Appeals to do so. In Bruce v. Adams & Reese, LLP, No. 25-5210, slip op. (6th Cir. Feb 25, 2026), the U.S. Court of Appeals for the Sixth Circuit—in a 2-1 opinion written by U.S. Circuit Judge Karen Nelson Moore— held that, under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of  2021 (the “EFAA”), a single plausibly pleaded sexual-harassment claim can keep an entire mixed-claim employment case out of arbitration, even if the other non-harassment/non-assault claims would otherwise be arbitrable.

Bruce places the first federal-circuit-court-of-appeals imprimatur on the broad reading of Section 402(a), which several district courts have adopted, and which we flagged in our earlier article as a likely flashpoint. It also raises the stakes of the pleading-stage fight over whether the plaintiff has adequately alleged a covered sexual-harassment or sexual-assault dispute.

In Bruce, adequate pleading was linked to arbitrability: because the plaintiff plausibly pleaded a Title VII hostile-work-environment claim, the employer could not compel arbitration of her ADA claims, which would otherwise have been arbitrable.

What Happened in Bruce

Bruce worked in a law-firm liquor practice that moved from Firm A to 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 Comments Off on The EFAA—Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act: A Practical Overview

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 »