Ending Forced Arbitration Of Sexual Assault, Sexual Harassment Act Of 2021

Recently, the U.S. Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445). The bill passed the House last month and the President is expected to sign it into law.

The legislation was introduced by Senators Lindsey Graham (R-SC), Kirsten Gillibrand (D-NY) and by Reps. Morgan Griffith (R-VA) and Cheri Bustos (D-IL).

When enacted, the legislation will amend the Federal Arbitration Act to prohibit the enforcement of any agreement that would require a worker to submit a claim of workplace sexual harassment or assault to arbitration.

While a worker can still choose to pursue a claim through arbitration, this new law will prevent agreements under which employees are asked to prospectively waive their right to pursue a claim of sexual harassment or assault through in the courts.

What remains to be seen here is how courts will interpret and apply the law. In particular, the legislation prohibits the enforcement of an arbitration agreement “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 open question is what will happen with cases that involve both claims of sexual harassment or assault and other claims, such as discrimination or retaliation.

A narrow reading of the statute would mean that a case could be split with the non-sexual harassment or assault portions being sent to arbitration while the sexual harassment or assault allegations remain in litigation.

On the other hand, a broad reading of the statute would mean that, as long as a case included a claim of sexual harassment or assault, no part of the case could be compelled to arbitration under an otherwise enforceable arbitration provision.

The legislative history and comments made by the bill’s sponsors suggest that Congress intended the former narrower approach.

However, the U.S. Supreme Court has expressly held that legislative history should not be used in evaluating the Federal Arbitration Act, meaning that courts interpreting the law may find themselves restricted in what they can look to interpret the meaning of the new law.

The big take-away here is that any business that has historically used arbitration agreements or clauses with its workers should carve out claims of sexual harassment or assault from its mandatory arbitration provisions and should consider the potential implications of having a case split between arbitration and the courts.

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