End of Mandatory Arbitration of Sexual Harassment
Legislative Update: Ending Forced Arbitration of Sexual Assault and Sexual Harassment
On February 10, 2022, the US Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. On March 3, 2022, President Biden signed it into law. It prohibits the inclusion of mandatory sexual harassment and assault arbitration clauses in pre-dispute arbitration agreements. The bill also abolishes arbitration contract clauses restricting class-actions of these claims. The law specifically restrains employers but it covers mandatory arbitration agreements beyond the workplace.
Key Definitions
The following key terms are defined in the statute:
- Pre-dispute arbitration agreement: clause in an employee’s contract that arbitrates a dispute that has not emerged at the time of the agreement.
- Pre-dispute joint-action waiver: agreement, either part of a pre-dispute arbitration agreement or not, that restrict or waives the right of one of the parties involved in the agreement from class/joint actions in a judicial, administrative, or arbitral forum regarding a dispute that hasn’t taken place at the time of the agreement.
- Sexual assault dispute: dispute involving a non-consensual sexual act or sexual contact as defined in section 2246 of title 18 or similar applicable Tribal or State law.
- Sexual harassment dispute: dispute that involves conduct that constitutes sexual harassment under applicable Federal, Tribal, or State law, such as unwelcome sexual advances, unwanted sexual attention, unwanted sexual contact, and retaliation for rejecting unwanted sexual attention.
Implications of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 comes into effect immediately and covers arbitration agreements signed before its enactment. Furthermore, while the law may be new in US federal law, some states have passed similar bills since the beginning of the #MeToo movement. However, in cases that had to do with arbitration clauses, the US Supreme Court has often maintained that the Federal Arbitration Act (FAA) preempted any opposing state laws on arbitration. As a result, such cases were typically invalidated by US courts.
With the new law, even if an employee had signed a pre-dispute sexual harassment/assault arbitration contract, they can still file a lawsuit with a court. In other words, US employers can no longer forcefully demand that the parties involved in sexual harassment or assault claims settle such cases through arbitration. This scenario also applies to class/joint actions.
The law does not affect any arbitration agreements in disputes outside sexual harassment and assault cases. However, the law states that the court alone holds power to determine whether a particular dispute falls within the scope of the law.
Employers and employees can voluntarily arbitrate sexual harassment or assault dispute. But all in all, Employers would now need to review arbitration clauses in employee agreements and human resource (HR) manuals.
Dealing With a Pre-dispute Sexual Harassment Arbitration Agreement Claim? Get Legal Help
Sexual harassment cases are one of the most complex legal battles. At the Law Office of Sheri Oluyemi, LLC, our experience in arbitration will make the difference. Companies and corporate organizations across the US can also take advantage of our vast experience and legal insight in reviewing the arbitration clauses in their employee agreements to avoid needless litigation and class actions.
Comments are closed.