On March 3, 2022, President Biden signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” The new law amends the Federal Arbitration Act (“FAA”) to prohibit the required arbitration of sexual harassment and sexual assault claims. The law applies not only to individual claims, but also class and collective claims. The law essentially overturns, with respect to sexual harassment and assault claims, a string of U.S. Supreme Court cases that allow businesses to require not only arbitration of claims, but also waiver of the right to maintain a class or collective action. By some estimates, more than 60 million American workers are subject to arbitration agreements.
The law further provides that the determination of whether a particular claim is exempted from mandatory arbitration as provided by the new law will be made by a court instead of an arbitrator, even if the agreement provides that an arbitrator is to make such a determination.
While the law prohibits businesses from requiring or mandating arbitration of sexual harassment or assault claims, it does not prohibit employees from voluntarily agreeing to arbitrate such claims if they wish to do so.
The law applies to any dispute or claim that arises or accrues on or after March 3, 2022 (the date of enactment of the law), meaning that even if an employee is subject to a current mandatory arbitration agreement, the agreement would be ineffective with respect to a sexual harassment claim that arose or accrued on or after March 3, 2022.
by Attorney Bryan Tyson