Vast changes in the law, at both the federal and state level, have made it even harder to get through the already dense thickets of employment arbitration. What do businesses need to know going forward?
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ARBITRATION IN employment litigation has always, understandably, been a contentious process. Navigating and enforcing agreements has gotten increasingly complex due to changes in federal law and regulations, as well as at the state level around the country. Here’s an overview.
Limits on Arbitration Agreements
Before deciding whether to include an arbitration agreement in employees’ onboarding documents, businesses should be aware of their legal limitations.
Federal. In general employment disputes, arbitration agreements cannot be used to force arbitration of sexual harassment claims. Prior signed agreements, including class and collective actions, are not enforceable and have lost all validity since President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 into law in March 2022.
Meanwhile, the Forced Arbitration Injustice Repeal Act of 2022 (FAIR) was passed in the House (for the second time) in February 2021 and is headed to the Senate. The FAIR Act would “prohibit a pre-dispute arbitration agreement from being enforceable if it requires arbitration of an employment, consumer, antitrust or civil rights dispute.” The bill is expected to meet resistance in the Senate, with a majority of Senators having previously evinced a...
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