On Thursday, March 3, 2022, President Biden signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” As noted in Michael Best’s previous alert, this bill was passed by the Senate on February 10, 2022 after being passed by the House of Representatives earlier in the week. Now, employees who are parties to arbitration agreements with their employers will have the option of bringing sexual assault and sexual harassment claims either in court or in arbitration.
Employers should begin reviewing any current arbitration agreements or arbitration clauses in their employment agreements. While employers do not necessarily need to carve out any claims related to sexual assault and sexual harassment in future agreements (although future litigation on this question is likely), employers should be aware that they cannot enforce the agreement in the event an employee raises a sexual assault or sexual harassment claim and chooses to litigate in court. Employers should be aware of and closely monitor specific state laws that they may also have to comply with (unless otherwise preempted) and that may add additional requirements beyond this new federal law.