Both the House and Senate have approved a bill that allows victims of workplace sexual assault and sexual harassment to take their claims to court instead of being forced to arbitration. In a rare show of bipartisanship, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. As of right now, President Biden has not yet signed it into law, but his signature is fully expected.
What Does This Do to Arbitration Agreements?
To be clear, this law does not negate ALL terms of an arbitration agreement. This only applies to claims based on sexual harassment or sexual assault. Plaintiffs will still have to arbitrate other workplace claims. The difference is that a plaintiff with a sexual harassment or assault claim gets to make the choice about whether to take the case to court or go to arbitration. The ability to negate an arbitration agreement will also apply to joint, class, or collective actions based on a sexual harassment or assault claim.
It is important to note that the law only applies to claims filed after the law goes into effect. Pending claims that are already in arbitration are not affected.
What Do You Need to Do to Prepare for This?
Hopefully, employers are already doing their best to prevent any actions in the workplace that would result in a sexual harassment or sexual assault claim. However, it never hurts to refresh this training or maybe expand it a little. The best defense to these claims is still (1) to have a well-publicized and effective policy and (2) that the plaintiff didn’t complain or when the plaintiff complained you put a stop to the behavior. As far as risk management, you should expect that if you get a claim, it may be in court and it may be public. The happiest situation is to make sure that your employees know what behavior is or is not okay at work and how to make a report.