New Jersey Employment Lawyer Blog
Arbitration is widely believed to favor big business over individuals. I have written numerous articles about forced arbitration, including cases that enforced arbitration of employment law claims, and ones that overturned such provisions. In my law practice, I have fought against forced arbitration on many occasions.
Yesterday, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 into law. As its name suggest, this law now prohibits forced arbitration of sexual harassment and sexual assault claims. The law received bipartisan support in Congress, a rare feat in the current political climate.
The new statute deems that a person who files a case in which he or she alleges sexual harassment or sexual assault cannot be forced to be bound by an arbitration agreement or class or collective action waiver that he or she entered into before the dispute arose. However, the person asserting the sexual harassment or assault still can chose to enforce an arbitration agreement. Likewise, parties still can agree to enter into arbitration agreements after a dispute involving sexual harassment or sexual assault if that is their preference, and either party can enforce such an agreement.
The new law defines “sexual harassment” to mean any conduct that is alleged to constitute sexual harassment as defined by federal, tribal or state law. Notably, under both New York and New Jersey law, as well as under federal law, that includes all forms of harassment due to gender or sex, whether or it involved any sexual component. The statute also applies to claims of sexual assault, which it defines to mean ones involving an alleged non-consensual sexual act or sexual contact.
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act makes it clear that the determination of whether it applies must be decided under federal law, and must be decided by a court even if the arbitration agreement states that such determinations must be made by an arbitrator.
This new statute, which amended the Federal Arbitration Act (“FAA”), applies to all disputes or claims that arise on or after the date on which the law is enacted. In other words, it applies to all claims involving sexual assault or harassment that occur on or after March 3, 2022, including any ongoing patterns of sexual harassment. Accordingly, it will invalidate existing arbitration agreements that otherwise would have required such claims to be brought in arbitration rather than in court.
It is not entirely clear how the law will apply to cases in which there is a claim of sexual harassment or sexual assault, and another causes of action such as a retaliation claim. However, it appears the employer would be prohibited from requiring the employee to arbitrate any portion of any such cases.
This is a very important advancement of employee rights. Hopefully, it will not stop with sexual harassment and assault, but rather forced arbitration will be banned in all forms of discrimination and retaliation.
A copy of the full text of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 is available here.