Massachusetts Court Expands the Temporal Scope of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

In Monteiro, the court held that the EFAA can render pre-dispute arbitration agreements and class or collective action waivers unenforceable in sexual assault and sexual harassment cases even where much of the alleged misconduct occurred before the EFAA became law, so long as the dispute or claim “arises or accrues” on or after that date. Although the statute is not retroactive by its terms, the court’s application gives it practical retroactive effect in many employment cases.

What Is the EFAA?

The EFAA, a response to the #MeToo movement, amended the Federal Arbitration Act (FAA) to prohibit the use of pre-dispute arbitration agreements and class or collective action waivers in disputes related to sexual assault and sexual harassment. By its terms, the statute applies to “any dispute or claim that arises or accrues on or after [March 3, 2022].”[1] In other words, if an employee signed a pre-dispute agreement requiring arbitration or waiving joint or class proceedings, that agreement will be void and unenforceable for sexual assault or sexual harassment claims after March 3, 2022.

Case Background

The plaintiff in Monteiro, a former assistant sales manager at a rent-to-own retailer, alleged that a co-worker subjected her to repeated inappropriate and sexually suggestive remarks, physical contact, and explicit messages over the course of her employment. While many of the alleged incidents occurred prior to March 3, 2022, at least one incident and the plaintiff’s subsequent termination occurred after the EFAA’s enactment.

After reporting the harassment to management and subsequently being terminated, the plaintiff filed suit in state court alleging sexual harassment, sex discrimination, and retaliation. However, because the plaintiff had signed a mutual agreement to arbitrate claims as part of her onboarding process, the defendants removed the case to federal court and moved to compel arbitration pursuant to the pre-dispute arbitration agreement.

Court’s Analysis

Judge Indira Talwani denied the motion to compel arbitration, finding that the EFAA applied to the plaintiff’s claims. The court emphasized that under the EFAA, claims of sexual harassment or sexual assault that accrue on or after March 3, 2022, are not subject to mandatory arbitration, even if some alleged misconduct occurred prior to that date.

Applying the “continuing violation” doctrine, the court determined that the plaintiff’s hostile work environment claim fell under the protections of the EFAA because at least one act contributing to the claim occurred after the statute’s effective date. The court further noted that the retaliation claim, based on the plaintiff’s termination, constituted a discrete act that accrued after March 3, 2022, and was therefore also subject to the EFAA.

The court rejected the defendants’ argument that the “primary allegations” of harassment predated the EFAA, holding that hostile work environment claims may span a series of acts over time, and the statute of limitations resets with each new act of harassment. As a result, the arbitration agreement was deemed invalid and unenforceable at the plaintiff’s election.

Why Monteiro Matters

Before the EFAA, employers routinely compelled arbitration of sexual harassment claims, rendering the allegations and proceedings confidential. Monteiro underscores that the EFAA’s protections turn on when a claim “arises or accrues,” not when the alleged underlying conduct occurred. Therefore, Judge Talwani’s decision substantially narrows the circumstances in which employers can rely on pre-EFAA arbitration agreements for sexual harassment disputes.

Takeaways and Next Steps

Arbitration agreements may be valuable risk-management tools, but employers should take special care to ensure these agreements are enforceable and aligned with the EFAA. Employers should review their arbitration clauses, update acknowledgment forms and dispute resolution policies to reflect the EFAA carve-out, and ensure internal training, reporting, and investigation protocols are robust to mitigate exposure.

For any questions about this update or restrictive covenants generally, please contact your ArentFox Schiff Labor, Employment & OSHA attorney.