March 7, 2022
News & Insights
On March 3, 2022, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. The new law amends the Federal Arbitration Act to prevent an employer from compelling an employee who asserts claims of sexual harassment and sexual assault from litigating their claims in private arbitration even when the employee and employer have signed a valid arbitration agreement.
The new law gives the employee the option of pursuing their sexual harassment/assault claims in state or federal court. In addition, the law prevents employers from limiting an employee’s rights to file and participate in class actions alleging sexual harassment and sexual assault through a class waiver. While this law applies to lawsuits filed on or after March 3, 2022, it applies retroactively to limit arbitration agreements signed before the new law was enacted.
However, the new law does not invalidate all existing arbitration agreements. Employers may still compel employees to arbitrate other employment claims such as wrongful termination, discrimination, failure to accommodate, and harassment that do not include allegations of sexual harassment or sexual assault. Thus, it is important that employers revise their existing policies to ensure that they comply with the new law.
In addition, an employee who alleges sexual harassment or sexual assault frequently includes other types of claims in their lawsuit. Going forward, the employer may have the option of compelling the non-sexual harassment and assault claims to arbitration while the sexual harassment and assault claims are litigated in court. However, such piecemeal litigation will likely prove to be more costly to the employer. In this situation, employers will need to balance the pros and cons of litigating mixed claims on two fronts.
To learn more about how the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act can impact your business, please contact Jennifer Morin.