In a resounding win for employees, Congress passed (with bipartisan support) the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021“, which bars the use of forced arbitration to address sexual assault and harassment claims in the workplace. The legislation passed the House on February 7, 2022, and the Senate on February 10, 2022.
[Update: On March 3, 2022, President Biden signed this bill into law.]
Specifically, the law amends Title 9 of the United States Code by adding, at the end, a new chapter (Chapter 4), titled “Arbitration of Disputes Involving Sexual Assault and Sexual Harassment.”
For example, new § 402 provides:
Notwithstanding any other provision of this title, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.
While New York had relatively recently enacted CPLR 7515, which by its terms prohibits mandatory arbitration clauses in employment discrimination cases, it only applied “[e]xcept where inconsistent with federal law.” Numerous courts, citing this “exception” (and pointing to the liberal federal policy favoring arbitration, as embodied in the FAA), issued rulings compelling arbitration in discrimination cases. See, e.g., Latif v. Morgan Stanley & Co., 18-cv-11528 (SDNY June 26, 2019).
Now, with this new law, certain employment discrimination plaintiffs have a new arrow in their quiver.
President Biden is expected to sign the legislation.