July 4, 2022

Volume XII, Number 185

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New Law To Bar Mandatory Arbitration Agreements, Waivers For Sexual Assault And Harassment Claims

Highlights

President Biden is expected to sign the recently passed law prohibiting mandatory arbitration of claims of sexual harassment and sexual assault

Previously signed agreements requiring arbitration will be unenforceable

Employers should review and modify their agreements to comply with this new law

Congress has passed a bill aimed at ending mandatory arbitration agreements for sexual assault or sexual harassment claims. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act passed the U.S. Senate recently with broad bipartisan support. President Biden is expected to sign the bill into law in the near future.

The act will prohibit mandatory arbitration of claims that relate to sexual assault or sexual harassment, regardless of whether they are filed pursuant to federal, state, or tribal law. It also invalidates agreements that waive an employee’s right to participate in a class action claim based on such allegations. 

Previously signed mandatory arbitration agreements and joint-action waivers will be unenforceable regarding such claims once the bill because law. Employees will have the right to choose whether to proceed in litigation or arbitration. Moreover, when an employer attempts to enforce a mandatory arbitration agreement and asserts that an individual’s claim is not a sexual assault or sexual harassment claim, under the new law it will be a judge, not an arbitrator, who will make that determination.

Employers who rely on mandatory arbitration clauses and joint-action waivers to avoid lawsuits and related exposure will need to consider changing their approach. While an employee may still choose arbitration, an employer cannot compel it, and employers will need to prepare for the substantial negative press that frequently accompanies sexual assault and sexual harassment claims. 

Employers should consider reviewing any mandatory arbitration clauses and joint-action waivers to ensure that sexual harassment and sexual assault claims pursuant to federal, state, or tribal law are removed from the agreements. Employers who already have such agreements in place should be prepared for them to be held unenforceable for any claim related to sexual assault or sexual harassment.

While the law has widespread implications in the employment context, it is not limited to employment relationships. It also applies to independent contractors, patients, customers and any other individual with whom a business might attempt to enforce mandatory arbitration.

© 2022 BARNES & THORNBURG LLPNational Law Review, Volume XII, Number 54
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About this Author

David B. Ritter Barnes Thornburg Law Firm Labor and Employment Law Attorney Chicago
Partner

David B. Ritter is a partner in the Chicago office of Barnes & Thornburg LLP. He is a member of the firm’s Labor & Employment Law Department and co-chairs the Logistics and Transportation Practice Group. He represents management nationwide in virtually all areas of labor and employment law, including employment discrimination and harassment claims, wage and hour disputes, non-compete, trade secret and restrictive covenants and employment torts.

With nearly 30 years of experience representing public and private companies, Mr. Ritter has...

312-214-4862
Douglas Oldham Labor and Employment Law Attorney Barnes Thornburg Law Firm
Of Counsel

Douglas M. Oldham is of counsel in the Columbus and Chicago offices of Barnes & Thornburg LLP and a member of the firm’s Labor and Employment Law Department.

Mr. Oldham has represented employers in employment discrimination litigation since entering the firm in 2004. He has accumulated significant labor and employment litigation experience throughout that time, including:

  • briefing numerous successful motions for summary judgment and motions to dismiss, as well as copious nondispositive motions, in federal...

312-214-5605
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