Legal Insider: Employers can no longer require arbitration for sexual harassment and assault claims

This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Northern Virginia that specializes in federal employee, security clearance, retirement and private sector employee matters.

By Melissa L. Watkins, Esq.

On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445).

The law took effect immediately and was approved with overwhelming support in the House of Representatives, with a vote of 335 to 97. The Senate followed suit, passing the law, without amendment, by voice vote. This new law is more than just giving victims of sexual harassment and assault “their day in court.” It’s also about forcing employers to put more effort into addressing sexual assault or harassment claims.

What is Forced Arbitration?

Forced arbitration is a controversial employment practice that is used by many employers requiring employees to arbitrate legal disputes with the company rather than going to court. Forced arbitration occurs when an employer conditions initial employment, continued employment, or important employment benefits on the employee’s agreement to arbitrate any future claims against the employer.

Companies use such arbitration agreements to bar access to the courts for all types of legal claims, including employment discrimination and sexual harassment claims. If an employment right protected by a federal or state law has been violated and the employee has signed a mandatory arbitration agreement, that employee does not have access to the courts and instead must handle the claim through the arbitration procedure set out in the arbitration agreement that she or he was required to sign.

Some of the downsides of an employee being forced into arbitration (instead of going to court) often include higher costs/fees for employees, less opportunity to obtain key evidence in preparation for cases and the employer’s ability to force a less convenient location (i.e. in another state far away) for the arbitration; many other downsides exist.

What Does the Law Change?

The law allows an employee alleging sexual harassment or sexual assault in the workplace to opt out of the pre-dispute arbitration agreement. However, the law only applies to disputes that arise after March 3, 2022. In other words, the new law does not apply to sexual harassment or sexual assault claims that occurred prior to March 3, 2022. However, this new law applies regardless of when the employee may have signed an arbitration agreement.

What Does the Change Mean for Employees?

Employees should understand that arbitration agreements are not automatically invalid as a result of the new law, but an employee can choose to avoid them where the law applies. The employee, not the employer, now gets to choose whether to litigate their sexual assault or harassment claims in court or through arbitration.

Often, employees alleging sexual assault or sexual harassment also allege other claims, such as discrimination or retaliation. Given the recency of the law, it is not yet fully known whether the law will allow all claims brought in a case involving sexual harassment or sexual assault, including discrimination and retaliation, to avoid an arbitration agreement.

However, given the wording of the law, referring to “cases” and not just “claims” it is likely that the law will allow employees to bring all claims in a case, even those not involving sexual harassment, into court rather than arbitration.

It is also important to note that even if an employee does not wish to sue in court, the employee can still raise a claim with the Equal Employment Opportunity Commission (EEOC). We have also included a link to the EEOC table showing the number of claims involving sexual harassment in the private sector filed since 2010. These numbers illustrate just how pervasive this problem is in workplaces throughout the country.

There are multiple ways in which an employee can going about raising such concerns and speaking with experienced legal counsel can allow you to evaluate all of your options. This new law is just the first step in freeing employees from forced arbitration in sexual harassment and assault cases.

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