Senate Passes Landmark Bill Ending Forced Arbitration of Workplace Sexual Harassment and Assault Claims
February 16, 2022
By: Adrian P. Castro
I am very pleased to introduce my partner Adrian Castro of our litigation and employment law departments. Adrian is going to tell us about a new federal law which will significantly curtail employers’ ability to require employees to sign arbitration agreements.
On Thursday, February 10, 2022, the Senate passed what is being heralded as a landmark bill ending forced arbitration of workplace sexual harassment and assault claims. Earlier this week the bill was approved by the House, and given President Biden’s support, enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 is practically guaranteed.
The Act, which received rare bipartisan support, will forbid companies from forcing victims of workplace sexual harassment and assault claims to arbitrate their claims in private forums. The Act also prevents “joint-action waivers,” which sought to prevent victims from participating in a joint, class, or collection action. The Act will immediately nullify such agreements upon its enactment. It is believed more than 60 million American workers are presently subject to such restrictions. Federal law will apply to any issues arising under the Act, and all disputes concerning enforcement of such provisions are to be determined by a court.
The Act only prevents forcing an employee to arbitrate; an employee can still voluntarily agree to arbitrate. However, for the reasons discussed below, the jurisdiction for the majority of future claims will almost certainly be the public court system.
Enactment of the act is a win for employees as arbitration is believed to favor employers: (1) arbitration forced resolution of such matters in private settings; (2) arbitration shielded perpetrators from the public, who were free to pursue employment elsewhere without repercussion; and (3) arbitration panels were believed to generally favor employers over employees. With respect to the nullification of joint-action waivers, this will allow multiple victims to bring their claims as one in a class action, a more efficient process that allows victims to band together in one joint action as opposed to numerous individual actions.
Enactment is generally credited to Gretchen Carlson, the former Fox News host, who tried to bring a sexual harassment lawsuit against Fox News in 2016 but was prevented from doing so based on an arbitration provision in her employment contract. As a result of her experience, and based on her efforts to seek reform, in 2017 Senator Lindsay Graham and Senator Kirsten Gillibrand introduced legislation to prevent these practices. Representative Ken Buck, of Colorado, co-sponsored the House bill with Representative Cheri Bustos.
Note the Act technically does not apply to non-disclosure agreements. Such agreements arguably could still prohibit sexual assault victims from speaking out against their perpetrators. Ms. Carlson is lobbying for Congress to examine that issue.
While the Act only pertains to the forced arbitration of sexual harassment and assault claims, White House officials have already signaled it could form the model for addressing the forced arbitration of other employment claims, such as racial discrimination.
You can read the full text the Act here.