Several states, as well as the federal government, have recently passed laws banning certain types of mandatory arbitration agreements, confidentiality clauses and non-disclosure agreements (“NDAs”) in contracts in the employment context, including separation and settlement agreements. These laws at both the federal and state level require employers to reevaluate their existing policies on a jurisdiction-by-jurisdiction basis to determine whether they comport with the newly passed laws.
On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”). This Act amended the Federal Arbitration Act (“FAA”) to invalidate arbitration agreements regarding workplace sexual assault or sexual harassment claims signed before a dispute ever arises. This means that businesses may not pre-emptively require employees to sign a blanket agreement to arbitrate any potential sexual harassment claims that may ever arise in the future. The law also prohibits class action waivers in any case filed under Federal, tribal, or State law claiming sexual assault or sexual harassment. Thus, employees retain the right to bring such claims as a class action.
However, the individual asserting the claim may still choose to arbitrate claims of sexual harassment or sexual assault in the event that they signed an agreement providing such an option. In addition, although the Act prohibits pre-dispute mandatory arbitration, it...
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