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New Law Prohibits Use of Mandatory Arbitration Agreements in Sexual Misconduct Claims

    News
  • February 18, 2022

Last week, the Senate approved the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, sending the measure to President Biden for his promised signature. The Act is a rare bipartisan measure intended to guarantee employees who allege sexual misconduct access to the court system. The bill was introduced several years ago following widely publicized reports that women who claimed that they were subjected to sexual harassment and assault at work were required to arbitrate their claims instead of being able to pursue the action in federal or state courts.

Mandatory arbitration agreements have become a popular way for employers to avoid the costs, delays, and perceived biases in some courts. The agreements typically require employees to agree in advance that they will not pursue certain claims relating to their employment in court. Advocates for victims of workplace sexual misconduct contended that the arbitration process allowed employers to bury embarrassing claims against executives, and that private arbitration is biased toward employers.

The new law takes effect upon its signing by the president. It invalidates existing mandatory arbitration agreements to the extent the employer tries to apply them to sexual misconduct claims. Future arbitration agreements must contain an exception for these claims. The law does not impact the ability of parties to agree to arbitration once the claims of sexual harassment or assault have been made. It also will not disturb arbitrations that concluded prior to the effective date of the legislation.