On Thursday, February 10, 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 passed the Senate after previously passing in the House. The bill, which President Joe Biden will reportedly sign, would amend the Federal Arbitration Act and effectively transform how parties resolve allegations of sexual harassment and assault.
The bill would permit a claimant alleging sexual assault or sexual harassment to elect that a pre-dispute arbitration agreement is invalid and unenforceable. In other words, the agreement is not automatically unenforceable, but the claimant can elect to proceed with their case in court. The bill does not prohibit the parties from agreeing to arbitrate after the dispute arises. Similarly, a claimant is permitted to elect to pursue a class or collective action in court alleging sexual assault or harassment even if a pre-dispute agreement says otherwise.
The bill is not expressly limited to employment. In theory, any claimant with a pre-dispute agreement is covered under the bill. Thus, an employee, student or independent contractor can elect to invalidate a pre-dispute agreement when alleging sexual harassment or sexual assault.
Notably, the bill does not purport to be limited only to future arbitration agreements. Instead, the bill appears to apply to existing pre-dispute agreements. In other words, an accuser bound by an existing arbitration clause would be free to elect proceeding in court with a claim of sexual harassment or sexual assault. The bill also prohibits the enforcement of any state or local laws that regulate when a claim of sexual harassment or assault can be brought to a court for resolution.
With the building pressure since the #MeToo movement’s exposure of sexual harassment and sexual assault, the legislation will allow claimants public recourse in the courts if they choose to do so. While the arbitration process has often been viewed by defendants as speedier and less costly, the decision whether to proceed in court or in arbitration is now taken out of the defendant’s hands and is left to the complainant’s discretion.
The liability from harassment claims can be considerable. While the damages for claims brought under Title VII are capped, Title IX has no cap on damages, and allegations of harassment often give rise to other state law claims as well as punitive and non-economic damages.
Practical Takeaways
Once the bill is signed by President Biden, claimants in sexual harassment or sexual assault cases will no longer be limited by pre-dispute agreements allowing them to proceed only in arbitration or forbidding them from seeking class or collective action relief other than through arbitration. Employers, education facilities, non-profit organizations and other institutions with potential liability for such claims should ensure best practices in their policies and procedures. Utilizing best practices will substantially decrease the risk of harassment-based liability and, in case of a lawsuit, show that the organization exercised reasonable care to prevent and promptly correct the alleged harassing behavior.
If you have any questions, please contact:
- Claire Bailey at cbailey@wp.hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
