Key Takeaways
- • The U.S. Court of Appeals for the Second Circuit held in Diaz-Roa v. Hermes Law that employers cannot carve out nonharassment claims from a case and send them to arbitration when an employee has elected out of arbitration under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA).
- • The ruling addresses what happens to the remainder of an employee's case after a qualifying sexual harassment or sexual assault dispute is removed from arbitration, a question left open since the EFAA was enacted in 2022.
- • Attorneys at Krevolin Horst, quoted by Law360, say the decision has implications for discovery, litigation costs and resolution strategy in EFAA-covered disputes.
Summary
The U.S. Court of Appeals for the Second Circuit has ruled that employers cannot separate nonharassment claims from an employee's case and compel them into arbitration when the employee has elected out of arbitration under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, according to a Law360 report dated October 26, 2026. The decision, in Diaz-Roa v. Hermes Law, resolves a question left open after the EFAA took effect in 2022, which gave employees with qualifying sexual harassment or sexual assault disputes the right to opt out of pre-dispute arbitration agreements.
The ruling matters for litigation planning. Because the remaining claims stay in court rather than being split into a separate arbitral proceeding, employers face a single forum for the full dispute. According to attorneys at Krevolin Horst, this affects discovery scope, litigation cost projections and the timing and structure of settlement strategy for EFAA-covered matters.
The full article, written by Lisa Haldar and Allegra Lawrence-Hardy, is behind a Law360 subscription, so additional detail on the court's reasoning and the specific claims at issue is not available from the source reviewed.
The ruling matters for litigation planning. Because the remaining claims stay in court rather than being split into a separate arbitral proceeding, employers face a single forum for the full dispute. According to attorneys at Krevolin Horst, this affects discovery scope, litigation cost projections and the timing and structure of settlement strategy for EFAA-covered matters.
The full article, written by Lisa Haldar and Allegra Lawrence-Hardy, is behind a Law360 subscription, so additional detail on the court's reasoning and the specific claims at issue is not available from the source reviewed.
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