As a result of a new law amending the Federal Arbitration Act (FAA), employers will no longer be able to use arbitration clauses to prevent employees from filing sexual harassment or sexual assault claims in court. H.R. 4445 (“Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021”) invalidates pre-dispute arbitration agreements prohibiting an employee from filing a lawsuit in court involving sexual assault or sexual harassment, and also bars employers from requiring employees to waive their right to bring such claims in a “joint, class, or collective action.”
Importantly, the law is effective immediately and is retroactive, and therefore applies to all existing agreements. However, it only applies to claims involving a “sexual assault dispute” or “sexual harassment,” and not to any other type of employment claim, such as discrimination actions or wage disputes.
An April 2018 report from the Economic Policy Institute found that more than half of American employees are subject to mandatory arbitration clauses. Businesses often favor arbitration because the process is more private, efficient, cost-effective, and predictable than the procedures in state or federal court. In light of this law, employers utilizing mandatory arbitration clauses would be wise to review existing agreements and policies with their counsel, and determine if any language needs to be updated for compliance.
This change in the law is an excellent opportunity for employers to engage in a broad review of their sexual harassment policies, including written policies, training practices, and reporting and investigative procedures.
Employers with questions about how H.R. 4445 impacts their workplace, or about sexual harassment policies in general, should contact one of Conn Kavanaugh’s experienced employment lawyers.
This column, which may be considered advertising under the ethical rules of certain jurisdictions, is intended as a general discussion of the topics covered, and does not constitute the rendering of legal advice or other professional advice by Conn Kavanaugh Rosenthal Peisch & Ford LLP or its attorneys.Share with your network: