As of March 3, 2022, employers can no longer contractually require that sexual harassment and sexual assault lawsuits be arbitrated. In the wake of the #MeToo movement, the 100-year-old Federal Arbitration Act has been amended by the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. The Act provides that pre-dispute arbitration agreements and class action waivers are unenforceable as applied to claims for sexual assault or sexual harassment. Claimants may still agree to engage in arbitration after the dispute arises.
The Act is part of a broader effort to create exceptions to the Federal Arbitration Act’s general policy of favoring arbitration over litigation. Specifically, the view of many lawmakers is that employees with claims involving race discrimination, wage and hour disputes, and other labor claims should have their day in court and have the opportunity to make the public aware of their experiences, with the goal of deterring employers and other perpetrators from engaging in bad behavior.
The Act applies “to any dispute or claim that arises or accrues on or after” March 3, 2022. For arbitrations already pending or for claims that accrued before March 3, 2022, the Act will not apply retroactively. The Act does, however, apply to invalidate pre-dispute arbitration agreements and class or claim waivers to the extent claims have not already accrued.
Employers should review any existing arbitration agreements and claim waivers – including those involving not only employees, but also contractors, vendors, customers, and others – to ensure that any requirements that claims of sexual assault or harassment be arbitrated are removed.
For more information, contact a Clyde Snow Labor & Employment Attorney at (801) 322-2516.