March 10, 2022

President Biden Signs Bill To Nullify Pre-Dispute Arbitration Clauses For Sexual Harassment And Abuse Claims

On Thursday, February 10, 2022, Congress approved legislation that bars the use of forced arbitration to address sexual harassment and abuse claims in the workplace, entitled Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act”). President Biden signed the Act into law on March 3, 2022.

The Act amends the Federal Arbitration Act and prohibits the mandatory arbitration of disputes involving alleged sexual misconduct. The Act renders any pre-dispute agreement that encompasses sexual misconduct claims unenforceable, and nullifies existing mandatory arbitration provisions. Pursuant to the Act, employees cannot be required to arbitrate sexual misconduct claims, either as a condition of their employment or otherwise. Employees may, however, choose to voluntarily arbitrate sexual misconduct claims.

In addition, employers should be aware of three additional aspects of the Act:

  • If a dispute arises as to whether the Act applies to a particular allegation of sexual misconduct, the Act provides that a court will determine the applicability of the Act to the agreement, rather than an arbitrator. If a court determines that the Act applies, the case will proceed in court; if the Act does not, then the employer may require that the claim proceed in arbitration.
  • The Act specifies that it will not apply retroactively to any claims that arose or accrued prior to its enactment.
  • The Act applies to sexual harassment and sexual assault claims brought in a joint, class or collective action.

Employers should review their employment agreements and ensure they are devoid of mandatory arbitration of sexual misconduct clauses. If employers have an existing employment agreement that is operational, and the Act has rendered clauses invalid, employers should develop a communications plan that will inform employees of the change to their employment agreement. Employers are encouraged to consult with legal counsel regarding any alterations or amendments to employment agreements and any communication plan to employees. Employers should also prepare for the potential of litigation that could ensure, either for the determination of the applicability of the Act or to litigate sexual misconduct claims. Employers should be proactive in maintaining robust internal investigation and anti-harassment policies to avoid litigation and mitigate risks surrounding sexual misconduct claims.

Employers should examine their sexual harassment and abuse policies, and ensure that they eliminate any forced arbitration of sexual misconduct clauses. The attorneys at Brown & Connery, LLP are available to assist in reviewing employment practices to ensure that they comport with the latest laws and regulations.

By: Molly Doyle and Alyssa I. Lott,  Associates at Brown & Connery, LLP