The Modern Workplace

One legal issue highlighted by the #metoo movement is the use of arbitration to resolve workplace sexual harassment claims. Some employers require employees to sign agreements at the time of hire, or at some other time before any claim arises, in which both sides agree that any later workplace disputes will be resolved by arbitration and not in court. Because arbitration is a private dispute resolution process, some #metoo advocates have argued that arbitration of sexual harassment claims allows the misdeeds of bad actors to be concealed and, perhaps, facilitates repeat offenses. Supporters of arbitration counter that, due to the sometimes emotional and highly personal nature of these claims, a plaintiff may be more comfortable litigating in a private setting and not in public for all the world to see. 

Congress has resolved this debate with the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, passed by the Senate on February 10, 2022, after earlier passing the House. This Act amends the Federal Arbitration Act by declaring that a pre-dispute arbitration agreement is unenforceable, at the election of the claimant, if the claim relates to a Sexual Harassment Dispute or a Sexual Assault Dispute. A Sexual Harassment Dispute is defined as a claim relating to “conduct that is alleged to constitute sexual harassment” under applicable law, while a Sexual Assault Dispute is defined as a claim involving “a nonconsensual sexual act or sexual contact”. The Act likewise makes a pre-dispute waiver of proceeding in a class or collective action unenforceable at the election of the claimant in a Sexual Assault or Sexual Harassment case.

The claimant, therefore, has the power to decide whether the arbitration agreement should be enforced or not, allowing the matter to proceed by private arbitration if that is how the claimant would prefer to have the matter handled. Also, the Act applies only to pre-dispute arbitration agreements, so the parties could agree to arbitrate a claim if the agreement is reached after the dispute has arisen. These provisions allow a claimant to utilize the private arbitration process if that is preferred, without being forced into arbitration if the claimant would rather be in court.

The Act does not affect the enforceability of arbitration for any other type of employment claim. And, as noted above, a claimant could elect to utilize the procedure set forth in the pre-dispute arbitration agreement even in a case claiming Sexual Harassment or Sexual Assault. Therefore, employers do not need to revoke an existing pre-dispute arbitration provision or to stop requiring employees to sign such an agreement. However, as if any further motivation was needed for making sexual harassment prevention a priority, this Act may very well make defense of sexual harassment claims more public and more expensive.