Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act Signed into Law

President Joe Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act) on March 3, 2022. The Act amends the Federal Arbitration Act and gives individuals asserting sexual assault or sexual harassment claims under federal, state or tribal law the option to bring those claims in court even if they had agreed to arbitrate such disputes before the claims arose. In addition, those individuals or a named representative bringing sexual assault or sexual harassment claims may choose to proceed via a class or collective action even if they had waived the right to proceed collectively before the claims arose. The Act is effective immediately and applies to arbitration and class- and collective-action waiver agreements entered into by employees before its effective date.

The Act specifies that the enforceability of predispute arbitration provisions and class- and collective-action waivers is "at the election of the person alleging conduct constituting a sexual harassment dispute or a sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct ... ." In other words, such agreements are not per se invalid, but the party bringing sexual assault or sexual harassment claims can elect to avoid them. Arbitration agreements and class- and collective-action waivers are still enforceable if the parties enter into those agreements after a dispute arises (though it will be the unusual case in which a claimant will prefer to have the dispute arbitrated and not subject to class or collective proceedings).

The Act gives the court, not an arbitrator, the power to determine the validity and enforceability of an agreement requiring arbitration of sexual harassment and sexual assault claims and the power to determine whether the Act applies. Under the Act, the court has that power even if the agreement purports to give the power to determine enforceability to the arbitrator.

Often, complaints alleging sexual assault or sexual harassment also allege other claims. It remains to be determined whether the option to avoid predispute arbitration or class- or collective-action waivers applies only to sexual assault or sexual harassment claims (as some commentators have posited) or to all claims at issue in a case. The Act provides: "[N]o predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute." Parties bringing sexual harassment and sexual assault claims likely will argue that the statute's use of the word "case" renders the statute applicable to all claims in the case.

Employers are not required to amend or replace existing arbitration and class- or collective-action waiver agreements. Nor are employers required to remove sexual assault or sexual harassment claims from their arbitration and class- or collective-action waiver agreements going forward. As explained above, claimants still can elect to use the arbitration process they previously agreed to and abide by the class-action waiver voluntarily, and may wish to do so to preserve privacy or because of a belief that the claim will be resolved more expeditiously than in the courts.

For more information or to examine the impact that the Act may have on your business, contact the authors or another member of Holland & Knight's Labor, Employment and Benefits Group.

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