EMPLOYER ALERT – Senate Clears Way for Major Shift in Banning Arbitration Agreements and Class Waivers for Workplace Sexual Harassment Disputes
On February 10, 2022, the U.S. Senate passed the Ending Force Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”, available here: H.R. 4445). President Biden is expected to sign the bill into law shortly. The Act will invalidate and bar enforcement of pre-dispute arbitration agreements, joint-action waivers, and related clauses for disputes involving claims of sexual assault or sexual harassment, subject to the election of the party alleging the misconduct.
The impact is significant. According to its sponsors, the Act will implicate agreements to which 60 million workers in the U.S. are subject, including 57% of women in the U.S. workforce. Notably, the Act will retroactively apply to pre-dispute agreements entered into before the law takes effect.
The new law will signal what is arguably the largest legislative victory in a chain of #metoo reforms and change the legal landscape by making it easier for sexual assault and sexual harassment claims to reach the courtroom, dramatically affecting future litigation.
The Act’s definitions are broad and will likely accelerate the trend of individual states passing laws removing barriers for workplace harassment and discrimination claims, as we have noted elsewhere in recent months.
The Act does include one important clarification. In general terms, the Act will not affect post-dispute arbitrations or agreements between employers and employees entered after a dispute arises.
Employers should prioritize assessing their agreements, policies, and litigation strategies for current and potential claims, and work with counsel to ensure their handbooks, trainings, and personnel are in compliance and up to date in light of this and other recent developments.
