On March 3, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, a new law that invalidates clauses in employment agreements that were forcing employees to arbitrate claims of sexual assault or sexual harassment—prohibiting them from suing the employer on their own or joining class action law suits. Professor Deborah Hensler led the Stanford Law policy practicum Examining Mandatory Arbitration and NDAs for Gender Discrimination Claims that explored the use of arbitration and non-disclosure agreements, with its client Lift Our Voices, the advocacy group founded by former Fox News star Gretchen Carlson that focused on sexual harassment at the workplace. Here, Professor Hensler discusses the new law and issues of mandated arbitration, class actions, and NDAs.
What are the key points of the new law?
The amendment, in lay terms, states that despite other provisions of the Federal Arbitration Act, a mandatory pre-dispute arbitration clause in a contract of adhesion in employment disputes cannot be enforced by an employer where the claims are for sexual harassment or sexual assault. In other words, even if an employee has signed an employment agreement that includes an arbitration clause and they subsequently have a sexual harassment or sexual assault claim against the employer, they cannot be required to arbitrate.
Does the new law prohibit arbitration?
It’s important to note, because it’s been an issue, that this does not prevent...
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