August 10, 2022

Volume XII, Number 222

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August 09, 2022

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August 08, 2022

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Employee’s Choice: No More Forced Arbitration of Sexual Harassment and Sexual Assault Claims

Employers can no longer mandate pre-dispute arbitration for claims of sexual assault or sexual harassment by employers. On Feb. 10, 2022, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “law”) ending any dispute as to whether the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (FAA), preempted state laws seeking to prohibit mandatory pre-dispute arbitration of employee sexual harassment claims. The law amends the FAA and makes pre-dispute arbitration agreements between employers and employees that would otherwise obligate the parties to arbitrate claims of sexual assault or sexual harassment invalid and unenforceable. President Biden is expected to sign the Act into law.

The law permits an employee and employer to agree to arbitrate sexual harassment and sexual assault disputes provided such agreement arises after the dispute occurs and the employee so agrees in writing. An employee may voluntarily choose to arbitrate their claim to ensure otherwise embarrassing or sensitive information remains private. The employee’s decision whether to do so will control.

The law also prohibits agreements that waive an employee’s right to participate in a joint, class, or collective action in court, arbitration, or any other forum that relates to a sexual assault dispute or a sexual harassment dispute (both defined terms).

Notably for employers, the law invalidates any existing arbitration agreement which forces parties to arbitrate sexual harassment and sexual assault disputes on an individual basis or as a class or collective action. Thus, to the extent current employees are subject to arbitration agreements that require them to arbitrate sexual harassment or sexual assault disputes, such agreements are not enforceable vis-à-vis any such disputes that arise or accrue on or after the date of enactment.

If there is a dispute about whether a particular claim qualifies as a “sexual assault dispute” or “sexual harassment dispute,” a court, not an arbitrator, is to answer that question, even if there is a contractual term to the contrary.

The law still permits employers to mandate employees arbitrate many employment claims including discrimination (even gender discrimination claims not grounded in allegations of sexual harassment or sexual assault), retaliation, and wage and hour claims. However, it also raises a number of unanswered questions. For example, what if an employee agrees post-dispute to arbitrate a sexual harassment or sexual assault claim and then reneges on that agreement after starting the arbitration process? Also unclear is whether an employer would have to seek an injunction in court to require the employee to return to arbitration.

Practical Considerations

In response to the law, employers have options short of rolling out entirely new arbitration agreements. Employers can continue to use current arbitration agreements that require employees to arbitrate sexual harassment and sexual assault disputes, but may no longer enforce the agreement when an employee raises such a claim. If an employer decides not to revise its arbitration agreement, for clarity, the employer will want to issue a policy clearly stating sexual harassment and sexual assault claims are no longer subject to the Company’s arbitration policy/agreement.

Alternatively, employers can revise their current arbitration agreements–and may want to do so on a going-forward basis–to exempt explicitly all sexual harassment and sexual assault disputes from arbitration (in the same way workers’ compensation claims and ERISA claims are generally exempt from arbitration), unless the employee agrees post-dispute and in writing to arbitrate these claims.

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XII, Number 45
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About this Author

Johnine Barnes, Greenberg Traurig Law Firm, Washington DC, Labor and Employment Litigation Attorney
Shareholder

Johnine P. Barnes has more than a decade of experience in litigating and defending administrative claims of harassment; retaliation and discrimination on the basis of age, race, sex and disability; wrongful discharge and breach of contract issues; and client compliance with the American with Disabilities Act, the Family and Medical Leave Act and other federal and state statutes governing employment. Johnine has counseled and represented companies, government agencies and associations on labor law issues, including the Fair Labor Standards Act, as well as analogous state...

202-331-3154
James Boudreau, Greenberg Traurig Law Firm, Philadelphia, Labor and Employment Litigation Attorney
Shareholder

James N. Boudreau is a lawyer at the Global Labor & Employment Practice and the Labor & Employment Practice’s Collective & Systemic Employment Litigation group. He represents management in class action and complex employment litigation and devotes the majority of his practice to managing teams of attorneys and paralegals in nationwide class and collective actions from receipt of the complaint through discovery, class certification and trial. He is considered a thought leader in class-based employment litigation and has been listed by Human Resource...

215-988-7833
Adam Roseman, Greenberg Traurig Law Firm, Philadelphia, Labor and Employment Attorney
Associate

Adam Roseman focuses his practice on federal and state labor and employment counseling and litigation arising under Title VII, the Fair Labor Standards Act, whistleblower retaliation under Sarbanes-Oxley and Dodd-Frank, the Occupational Safety and Health Act, and restrictive covenants.

Concentrations

  • FLSA

  • Title VII

  • Occupational Safety and Health Act

  • Whistleblower retaliation under Sarbanes-Oxley and...

215-988-7826
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