Archives for February 2022

Congress Bans Mandatory Arbitration of Employee Sexual Harassment and Sexual Assault Claims

On February 10, 2022, Congress, on a bipartisan basis, passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”).  The Act invalidates pre-dispute arbitration agreements between employers and employees relating to employee claims of sexual harassment and sexual assault.  President Biden is expected to sign the Act into law. The Act also invalidates pre-dispute agreements that waive an employee’s right to participate in a joint, class or collective action in court, arbitration or any other forum that relates to a sexual assault or sexual harassment dispute.  Moreover, if a dispute arises about whether a particular claim qualifies as a “sexual assault” or “sexual harassment” dispute, a court, not an arbitrator, must answer that question, even if the agreement specifies otherwise.

The Act permits an employee and employer to agree to arbitrate sexual harassment and sexual assault disputes provided such agreement arises after the dispute occurs and the employee’s consent is in writing.   

The Act applies retroactively, invalidating any existing agreement which forces parties to arbitrate sexual harassment and sexual assault disputes on an individual basis or as a class or collective action.

The Act does not prohibit employers from mandating arbitration or class/collective action waivers for other types of employment claims, including discrimination, retaliation, wage and hour, etc.

What To Do?

Employers with mandatory arbitration agreements in place have a choice with regard to existing employees who have signed such an agreement: (1) issue a new arbitration agreement that exempts sexual harassment and sexual assault claims from coverage; or (2) send a communication to those employees clarifying that the agreement no longer covers these types of claims.   For new employees, employers should revise its agreement to exempt sexual harassment/assault claims.

What Next?

The Act will inevitably present procedural and strategic challenges when an employee alleges multiple claims, some of which are still subject to arbitration.  Due to these challenges, the Act may disincentive employers from implementing mandatory arbitration agreements, despite the benefits such agreements may bring in terms of efficiency, cost and confidentiality.