Member Article

March 3, 2022

By: Tracy A. Warren, Kathryn B. Fox, and Michelle K. Meek

On March 3, 2022, President Biden signed into law a bill that prohibits companies from compelling to arbitration cases where there are allegations of sexual harassment or assault. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act makes arbitration agreements that require arbitration of individual and class claims of sexual harassment or assault invalid and unenforceable at the election of the person or class alleging the misconduct.

Now, employees with claims of sexual harassment or assault may choose to file lawsuits against their employers and alleged perpetrators in public courtrooms instead of submitting their claims to private arbitration. The new law also requires that a court, not an arbitrator, decide whether a claim constitutes sexual harassment or sexual assault, even if the arbitration agreement includes a provision delegating these decisions to the arbitrator.

This is the latest in a large number of legislative changes stemming from the #MeToo movement. Since the #MeToo movement gained international attention in 2017, there has been a push on a national, state, and local level to prevent companies from keeping allegations of sexual assault and sexual harassment, as well as resolution of claims involving these allegations, private.

The law takes effect immediately and applies to all existing arbitration agreements, even those signed prior to the law’s enactment. Employee sexual harassment or assault claims that arise after enactment of the law would not be arbitrable under such existing arbitration agreements. Employers should act quickly to review their mandatory arbitration agreements and class action waivers for any necessary revisions. Should you have any questions about how law may impact your company, please reach out to any of the attorneys in Buchalter’s Labor & Employment Practice Group.

Buchalter attorneys partner closely with clients to provide broad, protective counsel that minimizes risk exposure. Our critical risk-management solutions allow clients to focus on managing their businesses while we manage the details of their employment problems. We work closely with business management to ensure workplace compliance and an immediate response when conflict arises. We prepare and implement employee handbooks, advise on personnel matters and union relations, negotiate employment and severance agreements and defend lawsuits. Our clients vary from closely-held companies to major financial institutions, restaurant chains, manufacturers and retailers, with offices and locations nationwide.

This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.