Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021
By B. Alan Matthews
March 16, 2022
Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” President Biden signed the bill into law on March 3, 2022. H.R. 4445 amends the Federal Arbitration Act by making pre-dispute arbitration agreements between employers and employees unenforceable in cases involving sexual harassment or sexual assault disputes.
H.R. 4445 does not prohibit employers and employees from agreeing to arbitrate their disputes generally. However, if a sexual harassment or sexual assault dispute arises between the parties, the employer cannot enforce the arbitration agreement against the employee. H.R. 4445 further provides that a court has exclusive authority to determine whether the dispute is covered by the new law, regardless of whether the arbitration agreement otherwise assigns questions of arbitrability to the arbitrator. Importantly, H.R. 4445 does not prevent an employee from voluntarily choosing to arbitrate a sexual harassment or sexual assault dispute if the employee decides to do so. H.R. 4445 also extends to class action waivers. Accordingly, a class arbitration waiver would not be enforceable in a class action involving a sexual harassment or sexual assault dispute.
There have been numerous previous unsuccessful attempts at the state level to pass similar legislation. These laws have faced challenges in the face of Supreme Court precedent interpreting the Federal Arbitration Act as strongly favoring the arbitration of disputes. Congress has ensured the bill’s success by amending the Federal Arbitration Act. With the passage of H.R. 4445, we will likely see proposals for additional amendments to the Federal Arbitration Act.
H.R. 4445 likely does not require employers to revise existing employee arbitration agreements. Employers should, however, review their arbitration agreements and consider whether they should implement any changes going forward. As always, employers should continue monitoring legal developments in response to H.R. 4445 and contact their legal counsel when necessary.
This article is for informational purposes only and is not intended to provide legal or tax advice. Receipt of or viewing information on this website does not create an attorney-client relationship. You may contact our firm to establish such a relationship, but in any event, please consult an attorney or tax professional of your choosing for advice on this or any other legal topic.