Key Takeaways

• Pre-dispute arbitration agreements for sexual assault or sexual harassment claims will no longer be enforceable.

• Even if an agreement provides otherwise, the court will determine whether a particular claim qualifies as a “sexual assault dispute” or “sexual harassment” dispute.

• Employers should review their mandatory arbitration agreements to exclude language involving sexual harassment and sexual assault claims.

On February 10, 2022, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act), barring an employer’s enforcement of pre-dispute arbitration for claims of sexual assault or sexual harassment. President Biden is expected to sign the bill, turning it into law.

The Act specifically amends the Federal Arbitration Act and allows employees to invalidate a pre-dispute arbitration agreement with their employer to the extent their claims involve sexual assault or harassment. The Act also invalidates any pre-dispute agreement that prohibits or waives an employee’s right to participate in a joint, class, or collective action in court, arbitration, or any other forum that involves a pre-dispute sexual assault or sexual harassment claim. Accordingly, for any existing pre-dispute arbitration agreements, it will be up to the employee to elect whether to arbitrate their sexual harassment or assault claim or go to another forum.

The Act defines “sexual assault dispute” as a dispute involving a nonconsensual sexual act or sexual contact, including when the victim lacks the capacity to consent, and “sexual harassment dispute” as a dispute relating to (1) unwelcome sexual advances, (2) unwanted physical contact that is sexual in nature, including assault, and (3) unwanted sexual attention, including unwanted sexual comments and propositions for sexual activity. Additionally, a “sexual harassment dispute” includes disputes relating to conditioning professional, educational, consumer, health care, or long-term care benefits on sexual activity and retaliation for rejecting unwanted sexual attention.

Further, if a question arises as to whether a particular claim qualifies as a “sexual assault dispute” or “sexual harassment dispute,” then a court will make that determination, even if the underlying agreement contains contrary language.

Employers should reassess their mandatory arbitration agreements to comply with the Act and exclude pre-dispute claims involving sexual harassment and sexual assault. Additionally, employers may consider implementing a policy for requesting arbitration for sexual harassment and sexual assault disputes after such a dispute arises.

If you have any questions about this proposed law and how it may affect your business, please contact:

• Jacqueline K. Siegel
• Charles A. Lazo
• Kristin Klein Wheaton
• Caroline J. Berdzik
• Scott R. Green
• Or another member of the Employment and Labor group.