On March 3, 2022 President Biden signed a new law limiting the use of arbitration agreements and class action waivers for allegations of sexual harassment and/or assault. H.R. 4445 – known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act)– allows an individual to invalidate a predispute arbitration agreement[i] that would otherwise prevent them from filing a lawsuit in civil court alleging sexual assault or sexual harassment. Specifically, the Act provides that no predispute arbitration or class action waiver will be valid or enforceable under federal or state laws with respect to a case alleging sexual assault or sexual harassment.
What This Means For Employers
Determinations of applicability. The Act makes clear that any dispute over application of the Act to an agreement to arbitrate – including issues of validity and enforceability – will be determined by the court - not an arbitrator – applying federal law. This mandate cannot be changed by language in the arbitration agreement.
Application. The Act applies to any dispute or claim alleging sexual assault or sexual harassment arising on or after its March 3, 2022 enactment date. This includes individual and class action claims associated with sexual assault or sexual harassment.
Effect. An otherwise valid arbitration agreement, not associated with claims of sexual assault or sexual harassment, remains enforceable as to any other type of claim(s) alleged. For example, an employee subject to a valid arbitration agreement may allege both a wage and hour violation and sexual assault. Under such circumstances, the employee’s duty to arbitrate may be set aside as to the allegation of sexual assault, but not as to their wage and hour allegation; this claim would remain subject to the terms of the arbitration agreement.
Members with questions about the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 should contact Western Growers.
[i] The term “predispute arbitration agreement” means any agreement to arbitrate a dispute that had not yet arisen at the time of making the agreements.
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