Congress Passes New Legislation Prohibiting Forced Arbitration of Sexual Harassment Claims
On Thursday, February 10, 2022, the Senate passed H.R. 4445, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The bill, which was passed by the House on February 7, 2022, will be effective once signed by President Biden, who is expected to sign it shortly. As the name indicates, the new legislation prohibits employers from forcing employees to arbitrate sexual harassment and sexual assault claims. Employees will now have the right to litigate those claims in court, though they may still arbitrate if they choose to do so. The law applies to both individual and collective action claims. It does not apply retroactively to claims brought prior to the effective date of the legislation, but it does apply to any claims asserted on or after the effective date, even if those claims arose prior to the effective date and the parties had previously signed an arbitration agreement. That is, the bill overrides any prior mandatory arbitration agreements for sexual harassment and assault claims that are asserted on or after the date the legislation takes effect.
H.R. 4445 marks a major change to the Federal Arbitration Act, which had previously given employers wide latitude to compel sexual harassment and other types of employment claims to arbitration. The bill represents a legislative victory for the #MeToo Movement, which had been seeking for years to abolish mandatory arbitration of sexual harassment claims and give aggrieved employees the right to litigate these claims publicly via the judicial system. Going forward, employers should review and evaluate their arbitration programs in light of this new law.
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Paduano & Weintraub's Employment Group represents employers in all aspects of employment litigation and counseling. For companies of various sizes, ranging from large public companies to small family-owned businesses, we defend employers nationally, and across various industries, in state and federal actions and arbitrations brought by employees alleging discrimination, harassment and retaliation. We defend employers in single plaintiff and collective and class actions throughout the country alleging violations of the Fair Labor Standards Act and its state and local counterparts. We regularly represent employers in matters regarding restrictive covenants. We counsel clients in risk management by creating proactive solutions to workplace issues. We create and implement compliant and practical policies and best practices to help clients build a workplace infrastructure that balances business needs and legal compliance while mitigating short- and long-term risk. In that regard, we provide effective management-level training seminars and conduct employee harassment training and intervention. Our team responds to and manages the complex issues that arise from workplace crises, including high-profile sexual harassment complaints.