Late yesterday, the United States Senate approved a bill that will ban employers from requiring employees to settle sexual harassment and sexual assault claims in arbitration without the option of filing a civil lawsuit. The House of Representatives passed the bill earlier this week. Accordingly, the bill, which had broad bipartisan support, was sent last night to President Biden, who is expected to sign it promptly. The statute, titled the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, applies to any dispute or claim that arises on or after the date of enactment, which will be when President Biden signs the bill into law. An organization’s arbitration program being in place before the law was passed will not protect it for claims filed on or after the effective date of the new law.
 
The law affords the victim of sexual harassment or assault (individual claims and representatives in class action claims) the right to nullify any arbitration agreement and provides that a court applying Federal law--not an arbitrator--will determine the applicability of the new law. While the law is narrowly tailored to sexual harassment and assault claims, there is some concern by proponents of employment dispute arbitration that it may usher in similar laws barring mandatory arbitration of other discrimination and harassment claims (e.g., race, national origin, age, etc.). 
 
If your organization currently utilizes an arbitration agreement for sexual harassment and sexual assault claims, it is important that you examine it carefully and discuss it with your employment lawyer in order to plan for the impact of this new legislation.
 
If you have any questions about this legislation or its effect on your business, please contact us.