President Biden signed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (The “Act”) on March 3, 2022. The Act amends the Federal Arbitration Act (“FAA”) by prohibiting mandatory arbitration of sexual assault or sexual harassment claims. The law applies to arbitration agreements anywhere in the country, including Minnesota.
The Act allows such claims to proceed to arbitration at the “election” of the person alleging the conduct. Some claimants may still decide to proceed with arbitration because of the confidentiality of arbitration proceedings. Claimants now also have the choice, however, to speak openly about their experience and pursue claims publicly.
“Sexual assault dispute” is defined in the Act as “a dispute involving a non-consensual act or sexual contact, as such terms are defined in section 2246 of Title 18 or similar applicable Tribal or State law, including when the victim lacks capacity to consent.” “Sexual harassment dispute” is defined as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.”
The Act states that it applies to any case that “relates” to the sexual harassment or assault dispute. Most commentators have interpreted this as applying to claims of retaliation resulting from complaints of sexual harassment or assault. Any issue as to whether the Act applies is to be determined under Federal law in Federal court.
The Act was passed in the wake of the “Me Too” movement to prevent repeat offenders from being able to resolve claims outside of the public eye. The Act applies to any claims that arise after March 31, 2022. Existing claims are not affected.
The Act does not require employers to immediately revise existing arbitration agreements with employees. It would be a best practice, however, to amend new arbitration agreements going forward to reflect the limitations imposed by the Act.