News & Insights

President Biden Signs Federal Law Restricting Sexual Harassment And Assault Arbitration

On March 3, 2022, President Joe Biden (“President Biden”) signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“the Act”), a law that limits the use of pre-dispute arbitration agreements and class action waivers covering sexual assault and sexual harassment claims. The Act amends the Federal Arbitration Act (“FAA”) to give employees who are parties to arbitration agreements with their employers the option of bringing sexual assault or sexual harassment claims either in arbitration or in court.

The Act amends the FAA to include a new section, which states, in part: 

“[A]t the election of the person alleging conduct constituting a sexual harassment dispute or a 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 the sexual assault dispute or the sexual harassment dispute.”

The Act gives an employee that is asserting allegations of sexual harassment or assault, either on an individual basis or as a proposed class representative, the option to invalidate arbitration agreements and class or collective action waivers.  Employees may elect to either arbitrate these claims or pursue them in court, regardless of contractual agreements with their employers.

The Act applies to all claims that arise after March 3, 2022, regardless of the date of the agreement at issue. However, it does not affect claims that arose before March 3, 2022. The Act also provides that any disputes as to whether the Act applies will be decided by a court, rather than an arbitrator.

Future litigation is expected over the interpretation of this law. Employers should keep themselves apprised of the ongoing developments regarding this law. Further, employers should review their arbitration agreements to ensure compliance with the Act.