Congress Limits Arbitration For Sexual Assault And Sexual Harassment Claims

The U.S. Congress has passed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” This Act prohibits predispute arbitration agreements for claims of sexual assault or sexual harassment.

In an effort to reduce litigation and its expenses, employers often use arbitration agreements to require employees to submit claims arising during their employment to arbitration. These agreements require the employee to waive their right to file a lawsuit for such claims and may also prohibit the employee from joining a class action lawsuit. They are generally entered into at the beginning of an employment relationship.

While employers can still use such arbitration agreements, this new law provides that a predispute arbitration agreement cannot include claims for sexual assault or sexual harassment. In other words, employees have the right to choose whether to file a lawsuit for sexual assault or sexual harassment and cannot be required to waive that right. However, an employee who believes he/she was assaulted or sexually harassed can still agree to arbitrate their claim as long as they make that agreement after their dispute has arisen.

The Act will apply to any claims that arise after its effective date. Thus, if you have existing arbitration agreements, you will not be able to enforce them for new sexual assault or sexual harassment claims (those that are based on conduct that occurs after the effective date of the Act).

KZA attorneys can help you determine whether to continue using arbitration agreements, what to expect where only a part of a case may relate to sexual harassment or sexual assault, and how to modify your arbitration agreements to ensure they will be enforced by the courts and comply with this new law. 

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.