LEGAL ADVISORY: Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

On February 10, 2022, the United States Senate joined the House of Representatives to pass the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”.) The Act, which President Biden is expected to sign, bans forced arbitration in cases involving sexual misconduct and allows victims the option of bringing up the dispute in federal, tribal, or state court. The Act will have wide-standing implications in the field of employment litigation. The Act amends the Federal Arbitration Act (the “FAA”), Title 9 of the United States Code, with respect to the arbitration of disputes involving sexual assault and sexual harassment. A sexual assault dispute is broadly defined as a dispute involving a nonconsensual sexual act or sexual contact, including when the victim lacks capacity to consent. Likewise, a sexual harassment dispute is broadly defined as a dispute relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal, or state law. In general, the Act states that, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no pre-dispute arbitration agreement or pre-dispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under federal, tribal, or state law and relates to the sexual assault dispute or the sexual harassment dispute. Of course, pre-dispute arbitration agreements are frequently found in employment agreements and such arbitration agreements typically require arbitration of employment-based claims involving quid pro quo sexual harassment, hostile work environment based on sex, and retaliation claims based on reporting sexual harassment and participating in investigations of sexual harassment. Those types of employment-based claims would now fall within the Acts prohibition of forced arbitration of sexual assault and sexual harassment claims in the workplace. The determination of whether the Act applies with respect to a dispute shall be determined under Federal law by a federal or state court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator. Further, under the FAA, states are prohibited from passing or enforcing laws which are inconsistent with the FAA.

Update on Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act – March 4, 2022

On March 3, President Biden officially signed H.R.4445. The law went into effect immediately upon signing, effectively voiding any mandatory arbitration clauses in Employment Agreements when it comes to claims of sexual harassment or assault in the workplace. Employers are strongly advised to consult with legal counsel for full review and revision of existing employment agreements and should immediately negotiate the conclusion of any active or in progress arbitrations in these matters. For more information or to seek counsel from our Employment group, please reach out to request a consultation or call us at 216-696-1422. _____ This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.