President Biden Signs Bill Preventing Enforcement of Predispute Agreements to Arbitrate Sexual Assault and Sexual Harassment Claims

On March 3, 2022, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The act passed both houses of the legislature with broad bipartisan support. The act, which is an amendment to Title IX of the U.S. Code (the Federal Arbitration Act), takes effect immediately, and renders invalid and unenforceable any predispute agreement to arbitrate with respect to claims relating to a sexual harassment dispute or sexual assault dispute, whether brought in a single plaintiff or class action lawsuit.

Covered Agreements

The act applies to any “predispute arbitration agreement,” “predispute joint-action waiver,” or any agreement—whether or not a part of a formal arbitration agreement—that would “prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not yet arisen at the time of the making of the agreement.” The act does not prevent employers and employees from agreeing to arbitrate a sexual harassment or sexual assault dispute after the dispute has arisen.

The bill also does not affect predispute agreements to arbitrate discrimination, harassment, or retaliations claims based on sex that are unrelated to sexual harassment or sexual assault, or such claims based on other protected categories like age, race, or religion.

Covered Claims

The act broadly defines “sexual harassment dispute” to mean “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” This broad definition will necessarily include the “hostile work environment” and “quid pro quo harassment” claims that tend to arise out of one or more of the following types of misconduct:

• Unwelcome or unwanted sexual advances, attention, or comments;
• Benefit conditioned on sexual activity; or
• Retaliation for rejecting sexual advances, attention, or comments.

The act defines “sexual assault dispute” to mean “a dispute involving a nonconsensual sexual 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.”

The act applies to all claims or disputes that “arise or accrue” after enactment of the bill—so, on or after today.

Determination of Arbitrability

The act requires that the courts, not an arbitrator, determine whether the act applies to the covered agreement and whether the covered agreement is valid and enforceable. Courts are granted this sole authority irrespective of whether the arbitration agreement is challenged specifically or in conjunction with other terms of the agreement, and irrespective of whether the agreement delegates the question of arbitrability to an arbitrator.

Time To Review Those Arbitration Agreement Templates

While employers should keep existing agreements in place, they also should review their standard agreement to determine whether any revisions may be desirable in light of the act. 

More Changes To The Arbitrability of Employment-Related Claims Are Possible

This may not be the only change to the arbitrability of employment-related claims. The White House has stated an intention to pursue broader anti-arbitration legislation that would address the arbitrability of claims regarding discrimination on the basis of race, wage theft, and unfair labor practices. 

Please contact your P&F attorney with any questions.