Biden to Sign Law Ending Mandatory Arbitration of Sexual Harassment Cases

Congress recently passed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (H.R. 4445).  This bill received increasingly rare bipartisan support and we expect President Biden to sign it into law any day.

Let’s take a quick look at what this law does and what it means for employees.

The new law prohibits employers from requiring mandatory arbitration in sexual assault or harassment cases.  Employers often include mandatory arbitration policies in places like employee handbooks, offer letters and contracts.  An employee may still voluntarily agree to arbitrate a sexual harassment case, but cannot be forced to do so.

Unlike a civil lawsuit, arbitration is a private proceeding and not a matter of public record.  This means that employers have been able to shroud harassment claims (and many other types of employment claims) in secrecy.

Effective Date?

Even though the Bill states that it applies to “any dispute or claim that arises or accrues on or after the date of enactment of this Act”  the law is retroactive in the sense that if an employee has a claim in the future, a previously signed arbitration agreement would not be enforceable for sexual harassment or assault claims.

Employees are at a significant disadvantage in negotiating these mandatory arbitration provisions which are oftentimes tied to hiring, promotion or compensation increases.  Typically, employers present these agreements as ‘take it or leave it’ propositions, meaning that if an employee chooses not to agree she can look elsewhere for a job.  This new law aims to create transparency and and level the playing field, at least when it comes to sex harassment cases.

It is important to note that this Law does not pertain to or have any impact on any other types of discrimination claims or employment disputes.  Hopefully in the future we will see a new law that does.

If you believe that you have experienced sexual harassment at work, our attorneys are able to help.