New Federal Law Will Soon Invalidate Forced Arbitration of Employee Sexual Harassment and Assault Claims

New Federal Law Will Soon Invalidate Forced Arbitration of Employee Sexual Harassment and Assault Claims

On February 10, 2022, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which amends the Federal Arbitration Act by prohibiting employers from forcing employees to arbitrate sexual harassment and sexual assault complaints. President Biden is expected to sign the Act into law. Once signed, the Act will be effective immediately. The Act represents a significant change from the overall trend in workplace law allowing employers to require employees to arbitrate workplace disputes.

The Act comes on the heels of the #MeToo movement and related pressure on companies to respond better and more openly to allegations of mistreatment of women in the workplace. Recently, several large employers announced that they would end requirements for sexual harassment claims brought by employees to be addressed in private arbitration. Additionally, in the last several years, some states adopted legislation prohibiting employers from requiring employees to arbitrate sexual harassment claims.

One of the biggest criticisms of forced arbitration is the often private nature of arbitration proceedings, which critics argue allows employers to minimize sexual assault and harassment claims by keeping them confidential and out of the public eye. In a rare moment of bipartisanship, Congressional representatives and senators from both sides of the aisle agreed that forcing arbitration of these types of claims could undermine claims of mistreatment of women in the workplace. The Act does not prohibit employees from choosing to arbitrate sexual harassment and assault claims, however, and some employees may do so to avoid the more public nature of filing a lawsuit in court.

The Act voids all existing mandatory arbitration clauses involving sexual assault and harassment claims and bans future clauses of this nature. The Biden administration has indicated that it intends to push for additional legislation banning mandatory arbitration of other types of employment claims, including racial discrimination claims, wage disputes and labor practices. Absent additional Congressional action, however, otherwise valid arbitration agreements requiring employees to arbitrate other types of employment disputes remain enforceable.

Employers should review their mandatory arbitration agreements and make any necessary revisions consistent with the Act. While some state laws allow courts to strike invalid provisions in arbitration agreements, judges in other states may invalidate entire agreements if they violate the Act. Employers who use arbitration agreements should consider adding language that advises employees of their right to elect to bring disputes covered by the Act in court or in arbitration. If you have questions about the Act or how it may impact your business, please contact Margaret Scheele at [email protected] or (703) 408-4718 or any Outside GC employment counsel for further guidance on this important legal development.

Lorna Hebert               [email protected]         (617) 512-8401
Christy Kotowski      [email protected]   (510)-748-0930
Trish Lantzy                  [email protected]         (804) 683-1737
Natasha Lipcan           [email protected]         (203) 820-6754
Margaret Scheele      [email protected]    (703) 408-4718

Lorna Hebert (New England team) is an employment, labor, higher education, and litigation attorney with nearly 30 years of experience handling a broad range of complex employment and labor matters. Lorna advises clients on a wide range of employment matters, including workplace investigations, dispute resolution, hiring, performance management, discipline, terminations, reorganizations,  accommodations, employee benefits, wage and hour issues,  discrimination claims, policies and procedures, and training.

Christy Kotowski (California team) Based in the San Francisco Bay Area, Christy handles a broad range of complex workplace issues at the federal, state and local levels. Previously, she worked as in-house employment counsel for several large companies, and started her legal career in the Silicon Valley office of Morrison & Foerster, one of California’s oldest and largest law firms. 

Patricia Lantzy (Washington D.C. team) is a labor and employment attorney with almost 30 years of experience. Trish works with a wide range of clients, from individual executives and small businesses to the Fortune 500, on employment-related issues across the employee lifecycle, including recruiting, hiring, workplace harmony and leave issues, performance and discipline/discharge, corporate reorganizations and reductions in force.

Natasha Lipcan (New York team) is an employment law attorney with more than 20 years of experience representing private employers in a broad range of employee-related matters. She handles a wide range of employment issues, including employment law compliance, organizational change, diversity and inclusion, employment-related agreements, arbitrations and litigations, wage and hour, workplace training and policies, and recruiting, hiring, managing and terminating employees.

Margaret Scheele (Washington D.C. team) is an employment law attorney with almost 30 years of experience. Margaret has represented a range of clients in a variety of industries, including aviation, food service, telecommunications, health care, and government contracting. Her practice includes the full range of advice and counseling work that arises within the employment context, including most recently COVID-related matters. 

This publication should not be construed as legal advice or a legal opinion on any specific facts or circumstances not an offer to represent you. It is not intended to create, and receipt does not constitute, an attorney-client relationship. The contents are intended for general informational purposes only, and you are urged to consult your attorney concerning any particular situation and any specific legal questions you may have. Pursuant to applicable rules of professional conduct, portions of this publication may constitute Attorney Advertising.

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