On March 3, 2022, President Joe Biden signed The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”) that restricts the use of pre-dispute arbitration agreements and class action waivers covering sexual assault and sexual harassment claims. The Act amends the Federal Arbitration Act (FAA) to give employees who are parties to mandatory arbitration agreements with their employers the option of bringing claims of sexual assault or sexual harassment either in arbitration or in court.
Employees may now choose to file their claims of sexual harassment or assault against their employers and alleged perpetrators in public courtrooms instead of having their claims decided by private arbitration. Employees can make this election even if the arbitration agreement they had previously signed with their employer includes a provision giving these decisions to the arbitrator.
The Act amends the FAA to include a new section, which states, in part:
At the election of the person alleging conduct constituting a sexual harassment dispute or a sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no pre-dispute arbitration agreement or pre-dispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.
The Act gives employees the option to invalidate arbitration agreements and class or collective action waivers with respect to sexual assault and sexual harassment claims.
The Act applies to all claims that arise after March 3, 2022, regardless of the date of the agreement at issue. The Act, however, does not affect claims that arose before March 3, 2022.
The Act does not affect otherwise valid arbitration agreements for claims that are not related sexual assault and sexual harassment.
Since this law takes effect immediately and applies to all existing arbitration agreements, even those signed prior to the law’s enactment, employers should act quickly to review their mandatory arbitration agreements and class action waivers for any necessary revisions. Should you have any questions about how the law may impact your company, please reach out to us.