The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 will have far-reaching implications for real estate employers that, like in many other industries, have relied on mandatory predispute arbitration agreements to resolve sexual harassment claims brought by employees. The Act limits the use of predispute arbitration agreements and class action waivers covering sexual assault and sexual harassment claims.
Many commercial and residential real estate companies require property buyers to sign arbitration agreements. Arbitration often is used as an alternative to litigation and is supposed to be more affordable and faster than litigation. Rather than a judge and jury deciding a case, an arbitrator that the parties select makes the decision. This may be preferable because the parties can select an arbitrator with a background in real estate transactions, rather than having a randomly selected decision maker. If the arbitration is binding, which most are, there are generally no appeals by using this process, so it has greater finality than litigation.
The Act provides that an employee alleging sexual assault or sexual harassment against their employer may unilaterally invalidate a predispute arbitration agreement or class-action waiver. This means employees may choose to arbitrate these claims or pursue them in court — individually or as class members or representatives — regardless of any contractual agreements with their employer.
The Act...
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