On March 3, 2022, President Biden signed into law the bipartisan Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which marked a milestone for the #MeToo movement. Indeed, it was the #MeToo movement which brought awareness to the sizable percentage of employees in today's workplace who are subject to mandatory arbitration clauses and class action waivers in employment agreements. Under this new law, which amends the Federal Arbitration Act, individuals asserting sexual harassment and/or sexual assault claims against an employer or other contracting party are no longer forced to arbitrate their claims and can elect to bring their claims in the public forum of federal, tribal, or state court and bring class action lawsuits.
This is significant to the #MeToo Movement because arbitration proceedings are generally private and shielded from public disclosure, and most result in confidential settlement agreements. Proponents argued forced arbitration silenced victims and only served to protect harassers by keeping claims confidential. The new law forces companies to put more effort into addressing sexual harassment and sexual assault issues and the public nature of a court proceeding makes it harder for aggressors to target other victim(s).
Although the law applies to all past and future pre-dispute employment agreements (meaning those employment agreements entered into before a dispute arises), the law only impacts disputes that arise or accrue on or after March 3, 2022. It also does not impact claims of harassment or assault on the basis of other protected characteristics such as race.
Employers that have arbitration and class action waiver provisions in their employment agreements should update their agreements to ensure compliance with the new law. Because private employers in Arizona with one or more employees are covered under Arizona's law against sexual harassment, Arizona employers should also be sure to implement robust sexual harassment policies to curb sexual harassment in the workplace and reduce the risk of liability in the future.
Originally published April 7, 2022
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