New Federal Law Prohibits Companies from Requiring Employees to Arbitrate Their Sexual Harassment and Sexual Assault Claims

On February 10, 2022, Congress, on a bipartisan basis, passed a bill called the "Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act" (the "Act"), which President Biden is expected to sign into law. Below is a brief synopsis of the Act, along with some practical advice for employers.

Overview of the Act:

• The Act invalidates pre-dispute arbitration agreements between employers and employees regarding claims of sexual harassment and sexual assault.
• It also invalidates pre-dispute agreements that waive an employee’s right to participate in joint, class, or collective actions in court, arbitration, or other forums related to sexual harassment or sexual assault claims.
• Disputes regarding what qualifies as "sexual assault" or "sexual harassment" must be resolved by a court, not an arbitrator, even if the agreement specifies otherwise.
• An employee and employer may agree to arbitrate sexual harassment and sexual assault disputes, provided the agreement arises after the claim arises, and the employee's consent is in writing.
• The Act applies retroactively, invalidating any existing agreements forcing parties to arbitrate sexual harassment and sexual assault disputes on an individual basis or as a class or collective action.
• It 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.

Recommendations for Employers Going Forward:

• Existing Employees: Employers with binding arbitration agreements covering claims for sexual harassment and sexual assault should either:
  1. Have employees sign a new binding arbitration agreement exempting sexual harassment and sexual assault claims; or
  2. Advise employees in writing that their binding arbitration agreement no longer covers disputes involving sexual harassment or sexual assault and have employees sign an acknowledgment of receipt.
• New Employees: Employers should revise their binding agreements for all new employees.

For more information, please contact attorney Robert L. Rosenthal.