This month, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, limiting the use of mandatory employment arbitration agreements. Until now, under the Federal Arbitration Act, employers, by use of valid arbitration agreements, could require employees to submit most claims against the employer to arbitration.
The new law amends the Federal Arbitration Act to create a carve-out for claims of sexual harassment and sexual assault. Individuals with such claims can opt to file suit in court, notwithstanding an arbitration agreement to the contrary. There remains much about this new law that is uncertain, such as how retaliation claims will be treated if they arise from sexual harassment or sexual assault claims, or how the law will apply if the employee asserts multiple causes of action, only one of which is sexual harassment or assault. The new law is effective immediately and applies to all claims that arise or accrue on or after March 3, 2022.
Employers do not need to update their existing arbitration agreements but should be aware that going forward, the agreement will not be enforceable against an employee claiming sexual harassment or sexual assault. If you need assistance with your business’s arbitration agreements, Vandeventer Black’s labor and employment law attorneys are available to assist you.