Congress Passes Law Ending Forced Arbitration of Sexual Assaults

The #MeToo movement and the widespread exposure of high-profile and not-so-high profile sexual exploitation and assault in the workplace has led to public discontent with nondisclosure and “forced” arbitration agreements.  Accordingly, Congress has acted to negate these arbitration contracts with the recent passing of the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” This legislation has bi-partisan support and is expected to be signed by President Biden shortly. 

The act, while narrow in scope, is significant and will affect existing and future employment contracts. For all contracts mandating arbitration arising from employment, when the employee-claimant alleges either sexual harassment or sexual assault, he or she will get to elect whether the claim is arbitrated.  Pursuant to this law, even if there is an arbitration agreement in place, a claimed victim of sexual harassment or sexual assault has the discretion to proceed in open court rather than arbitrate privately. 

Once signed, this law will apply to all disputes arising or accruing after the act is passed.  Therefore, it will not impact cases that have already been filed, but it will affect all future cases.

Once the president signs the bill into law, it will take effect immediately, therefore FLB Law encourages employers to start reviewing their employment contracts, specifically related to mandatory arbitration agreements and class action waivers, to determine if revisions are required.

Please contact Partner Joshua Auxier (auxier@flb.law) if you have any questions about your rights and responsibilities regarding employment-related arbitration agreements, and we will help you navigate this and other employment-related issues.