New Law Negates Mandatory Arbitration Agreements for Claims of Sexual Assault or Sexual Harassment
On March 3, 2022, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act”). The Act voids pre-dispute arbitration agreements that require a party to arbitrate sexual assault or sexual harassment claims. As a result, it is now unlawful throughout the United States to require employees to arbitrate a claim of sexual assault or sexual harassment rather than pursue their claim in court.
Before the Act, it was common place for large employers to require employees to sign mandatory arbitration agreements as a condition for their employment. These arbitration agreements would require employees who believed they were a victim of discrimination to bring claims in secretive arbitration. The Act took effect immediately and retroactively applies to all existing arbitration agreements including those signed prior to the Act’s enactment.
Other claims of employment discrimination may still be subject to mandatory arbitration agreements.