Landmark Federal Law Ends Forced Arbitration of Sexual Harassment Cases

On March 3, 2022, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.  The law, which passed with broad bipartisan support, will have a major impact on the field of sexual harassment litigation, ensuring that such cases can be brought in public court proceedings, rather than being forced into private arbitration. 
 
Many employees are required to sign “arbitration agreements” as a condition of employment.  Until now, such agreements have largely prevented employees from pursuing public lawsuits alleging that they have been sexually harassed.  By forcing such claims into private arbitration, employers have been able to prevent the employee from bringing a public proceeding and to deprive the employee of the right to a jury trial.  Arbitration also may carry limitations on discovery that would not exist in court, and generally deprives the parties of a right to appeal the arbitrator’s decision.  The new law ends the practice of forcing claims of sexual harassment or sexual assault into arbitration.
 
The new law also ends the practice of allowing arbitration agreements to prohibit class actions involving sexual harassment and sexual assault claims.  Arbitration agreements have been a central tool for employers to restrict the right of employees to bring class actions in recent years.   
 
Under the new law, courts, not arbitrators, will decide whether the new law applies in a given case (i.e., preventing an arbitration agreement from “delegating” that threshold question to an arbitrator).
 
Courts may soon flesh out questions raised by the law.  For example, when a case involves allegations of sexual harassment as well as other allegations (e.g., harassment based on a different characteristic, or wage and hour violations), will the whole case remain in court, or will some cases be subject to proceeding partly in court and partly in arbitration?  Questions may also arise concerning the effective date of the Act; the Act states that it applies to any dispute or claim that “arises or accrues” after the date of the enactment of the Act (March 3, 2022) – how will this apply to allegations of sexual harassment that (in whole or part) occurred prior to the date of the Act, but are not framed as a ”dispute” until after the Act was passed?  Could employers attempt to invoke this new federal law as a basis for removing cases to federal court? 
 
Regardless of the outcome of these questions, the new law is a landmark development, restoring the benefits of the judicial process to individuals whose sexual harassment claims might otherwise have been forced into private arbitration.  
 
A copy of the law is available here.
 
Posted by Stanton Baker