New Federal Law Bars Compelled Arbitration of Sexual Harassment and Sexual Assault Claims

On March 3, 2022, with bi-partisan support, President Biden enacted the, “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” to amend the Federal Arbitration Act (“FAA”) to invalidate and render unenforceable pre-dispute arbitration provisions that require mandatory arbitration of sexual harassment and sexual assault claims.  Employers can no longer mandate the arbitration of sexual assault or sexual harassment claims filed under federal, state, or tribal law, as those terms are defined by those applicable laws.  Now, unless the parties agree to arbitration after the claims arises, the employee may pursue sexual harassment and sexual assault claims in court.

Despite these powerful changes to the law, the new legislation remains limited as it does not apply to all claims of workplace sex or gender discrimination.  For example, in a lawsuit that contains several diverse, yet interrelated employment claims, an employer may have the option to continue to arbitrate discrimination claims while the sexual assault/harassment claims proceed in court.  However, potential procedural problems caused by splitting the action into two forums may ultimately be resolved by the court.

In light of this new legislation, employers should update their employment contracts or arbitration agreements to account for the revisions.  In addition, employers should take measures to prevent any sexual assault and sexual harassment claims before they arise. This can be accomplished through proper harassment/discrimination policies that involve a reporting procedure with prompt and thorough investigations after the receipt of a complaint.

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This article was written by Steven C. DePalma.

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