On March 3, 2022, President Biden signed into law H.R. 4445, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act’). The Act amends the Federal Arbitration Act and prevents the enforcement of arbitration provisions against an employee alleging sexual harassment. The Act will likely increase the number of sexual harassment claims litigated in federal and state courts across the country. (This alert updates MBJ’s client alert from February 9, 2022 on the same subject.)
Relevant Background
Historically, employers have used employment arbitration agreements in response to an increase in employment-related litigation. Employers generally find that arbitration, as opposed to court litigation, results in faster and less expensive dispute resolution. Additionally, many arbitration agreements contain employee waivers of any right to bring class actions against their employer, or contain so-called delegation clauses, which require the arbitrator, rather than a court, to decide what claims are subject to the arbitration provision. For decades, the Supreme Court has repeatedly upheld the enforcement of arbitration agreements.
What Is In The Act
The Act prevents a court from enforcing an arbitration agreement against a party alleging conduct that constitutes either a “sexual harassment dispute” or a “sexual assault dispute.” The Act also invalidates class-action waivers and delegation clauses for these two types of disputes.
“Sexual harassment...
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