On March 3, 2022, President Biden signed the long-titled Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. Seen as a result of the #MeToo movement, this fairly simple amendment to Title 9 of the United States Code prohibits private employers from mandating that employees submit to arbitration of sexual assault and sexual harassment claims.
While the narrow scope of this law does not completely negate all employment arbitration agreements, it is intended to and will likely have a large impact on employment claims in the future.
Arbitration agreements between employees and their bosses have grown in popularity over the years. The Federal Arbitration Act (FAA) is a powerful law that is given great deference by both state and federal courts.
Businesses have historically seen arbitration as a way to cut litigation costs, achieve confidentiality on employment claims, and speed up the process of resolving all sorts of claims related to the workplace. According to the American Association of Justice in 2021, over 60 million workers in the U.S. were under contracts or agreements that mandated arbitration.
In the last 5 years, however, some high-profile sexual harassment cases that were referred to arbitration under employment agreements have raised the ire of the public, who in turned leaned on their legislators. States like New York and California passed legislation that prohibited or limited what types of employment cases could be mandated to...
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