March 8, 2022
As expected, President Biden on March 3, 2022, signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” H.R. 4445, which invalidates predispute arbitration agreements that preclude a party from filing a lawsuit in court involving sexual assault or sexual harassment, at the election of the party alleging the misconduct, including in class actions.
Commenting in celebration at the signing of H.R. 4445, Vice President Kamala Harris said: “Forced arbitration silences survivors of sexual assault and harassment. It shields predators instead of holding them accountable and gives corporations a powerful tool to hide abuse and misconduct. And it compels the people of our nation—and most often the women of our nation—to sign away one of their most fundamental rights: the right to seek justice in court.”
Alleged survivor determines forum. Specifically, the new law provides that, “at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no 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 sexual assault dispute or the sexual harassment dispute.”
Courts determine arbitrability. Importantly, whether the new law applies to a dispute will be determined under federal law, and the applicability of the Act to a particular arbitration agreement and its validity and enforceability will be determined by a court, rather than an arbitrator, no matter whether the party opposing arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract in which it is included, even where the agreement purports to delegate such determinations to an arbitrator.
Only sexual harassment/assault claims targeted. Before the Senate vote on the bill, Senator Lindsey Graham (R-S.C.) explained that legislative supporters were working “to stop the practice of someone signing an employment contract, having a sexual harassment or assault problem in the workplace, and being forced into arbitration that is skewed for the employer against the employee for these things to be hidden. We do not intend to take unrelated claims out of the contract.”
What the bill prevents, Graham continued, is “sexual assault and sexual harassment claims being forced into arbitration, which perpetuates the problem. The light of day in a courtroom is what we are hoping for.”
#MeToo effect. The EEOC noted that, as the #MeToo movement brought to light, in the most egregious cases, secrecy can shield serial harassers from accountability and permit them to repeatedly abuse employees. But a court’s decision and orders make the identity of those who violate the law and their conduct public, which in turn, can influence behavior and deter sexual harassment and assault from occurring in the first place.
The federal antidiscrimination agency also noted that some of the most prominent U.S employers have already voluntarily discontinued mandatory arbitration for sexual harassment claims. Further, several states have passed laws aimed at restricting mandatory arbitration of harassment claims.
EEOC Chair Charlotte Burrows also pointed out that the EEOC “cannot be forced into arbitration, nor are we bound by class action waivers in employment discrimination claims—including workplace sexual harassment disputes.” Thus, although private employers may be bound by arbitration agreements, the EEOC is not, and aggrieved individuals can continue to file charges with the agency.
No small workplace problem. In Fiscal Year 2020, 6,587 sexual harassment private sector charges were filed with the EEOC. A report by the EEOC’s Select Task Force on the Study of Harassment in the Workplace found that most people who experience harassment in employment do not report it, with 50-70 percent of women having faced some form of unwanted or unwelcome sexual harassment in the workplace.
Source: Written by Pamela Wolf, J.D.
From WCI's HR Answers Now ©2022 CCH Incorporated and its affiliates. All rights reserved.
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