The End to Mandatory Arbitration for Sexual Misconduct Claims

The following article was first posted on Berchem Moses’ Labor and Employment Law Journal. It is reposted here with permission.

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In an effort to remove clouds of secrecy that may surround sexual misconduct claims, President Joe Biden recently signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act into law.

Arbitration is typically a confidential process, while court proceedings are public. To bring more sexual misconduct claims into public forums, this act amends the federal Arbitration Act to prohibit mandatory arbitration of claims of sexual assault and sexual harassment.  

Most employers do not have contracts with employees that specifically state that claims of sexual assault and sexual harassment must be arbitrated.

However, it is common for employment contracts to require the arbitration of all disputes related to the employment relationship. Such agreements are affected by the new law.

Arbitration Mandates

The law prohibits pre-dispute arbitration agreements and pre-dispute joint-action waivers (prohibiting the right to class actions and similar actions) to the extent they apply to disputes regarding sexual assault or sexual harassment.

It does not prohibit an agreement to arbitrate once a dispute has arisen.  

For contracts already in place, arbitration mandates are no longer valid or enforceable with respect to sexual assault disputes or sexual harassment disputes. 

For contracts already in place, arbitration mandates are no longer valid or enforceable with respect to sexual assault or sexual harassment disputes.

In the event an agreement provides for mandatory arbitration, the person alleging sexual assault or sexual harassment has the right to choose whether to pursue it in arbitration or in another forum. 

When there is a dispute as to whether arbitration is mandatory in a particular case (such as a disagreement as to whether to characterize the dispute as pertaining to sexual harassment), the issue will be determined by a court, rather than the arbitrator.

Employment Agreements

Going forward, employers should ensure that they draft employment agreements that do not impose unenforceable arbitration requirements. 

One consideration is how to handle claims that may involve sexual misconduct alongside other claims against the employer (such as race discrimination). 

If the employer prefers to litigate claims that do not pertain to sexual misconduct in other forums, the employer may wish to specify in its employment agreements that only the sexual harassment/sexual assault claim would be exempted from arbitration. 

Employers should ensure they draft employment agreements that do not impose unenforceable arbitration requirements.

However, the employer may prefer to consolidate claims into a single forum and thus keep hybrid claims outside of arbitration.

As always, employers should ensure they are complying with all applicable laws regarding sexual harassment. 

Connecticut’s Time’s Up Act requires that employers train all new and existing employees and supervisory personnel in sexual harassment prevention. 

Employers are also subject to certain notice and posting requirements regarding their sexual harassment policies. 

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About the author: Rebecca Goldberg is an associate with Berchem Moses PC, focusing on labor and employment matters.