In the last month, the U.S. House of Representatives and U.S. Senate have approved the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (Ending Forced Arbitration Act), which was signed into law by President Joe Biden on March 3, 2022 and became effective immediately. The Ending Forced Arbitration Act amends the Federal Arbitration Act (FAA) by allowing employees who were previously subject to mandatory arbitration agreements to pursue their claims of sexual assault or harassment in court.
The U.S. Equal Employment Opportunity Commission (EEOC) and other public interest groups have fought to exclude the application of arbitration clauses to sexual assault and harassment cases for many years, arguing it increased both litigation costs and the trauma to these sexual harassment claimants. Additionally, these groups argued that forced arbitration allows companies to hide cases of sexual harassment behind closed doors, which often allows the harassment to repeat, pointing to the #MeToo movement for support.
While not all employment arbitration provisions are the same, most clauses provide that all claims, including sexual assault and harassment, must be sent to arbitration. In recent years, some prominent employers discontinued forcing sexual harassment claims into arbitration on their own accord. Several states also adopted laws restricting an employers’ ability to force mandatory arbitration of sexual harassment claims. Before passage of the Ending Forced Arbitration Act, many employees only had two options for pursuing a claim—proceed to arbitration and/or file a charge with the EEOC.
In providing context to the impact this could make—in 2020 alone, the EEOC received more than 6,500 sexual harassment charges. Now, with the passage of the Ending Forced Arbitration Act, potentially thousands of employees may file their sexual harassment claims in civil court instead of being forced into arbitration.
Employers with employment arbitration provisions that include a requirement to arbitrate sexual harassment and/or sexual assault claims should revisit and amend their arbitration agreements to comply with the Ending Forced Arbitration Act, which was effective as of March 3, 2022.