On March 3 of this year, Congress passed, and President Biden signed into law, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (Act). An employer can no longer require arbitration with an employee for any sexual harassment or assault disputes. The new law says employees who claim they were sexually assaulted and/or harassed can now go to court and have a public jury trial instead of a quiet, secret proceeding. Essentially, this is a win for the employee and a new challenge for employers.
“This change will likely mean an increase in the number of sexual assault and harassment claims filed against employers,” says FBFK Shareholder/ Employment Law Attorney Mark Zeidman. “The onus is on employers to act quickly and review and revise their employment handbooks and agreements to ensure they don’t misrepresent this issue with employees.”
Zeidman adds that “Beyond the obvious change to a public forum, jury trials in a courtroom greatly increase the chances of recovering a large judgement.”
If your company previously required arbitration of all employment related claims, employee handbooks should be amended to reflect that sexual assault and sexual harassment claims are no longer subject to mandatory arbitration you should also strongly consider issuing a bulletin to employees advising them of the change.
In short, pre-dispute arbitration clauses mean that if the agreement to arbitrate is entered into before the problem arises, such as part of the initial employment agreement, arbitration cannot be forced by the employer. If, after the problem arises, both sides agree to arbitrate the claim at that time, that is still lawful under the new Act.