The U.S. Senate has approved a new bill that could change the outlook for many workplace sexual harassment claims. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act prohibits employers from forcing employees to agree to mandatory arbitration of any claims of sexual assault or harassment in the workplace. Once President Biden signs the bill, it will take effect immediately.

What Is Mandatory Arbitration?

Many employers require employees to sign mandatory arbitration agreements as a condition of employment. These contracts mean that employees agree to arbitrate any disputes or claims against an employer rather than filing a complaint with a government agency (like the EEOC) or seeking justice through the legal system. Often, these clauses are part of the onboarding process, along with payroll documentation and a company handbook.

Although arbitration can be a faster and easier method of dispute resolution than litigation, claimants are often limited in the types and amount of damages they can pursue. Further, requiring claimants to arbitrate grievances also prevents them from joining similar claims together in class-action lawsuits against their company or its representative. Many mandatory arbitration clauses also include non-disclosure and confidentiality requirements, ensuring employees cannot discuss their claims (or the terms of any settlement) with their coworkers.

Why Prohibit Mandatory Arbitration for Sexual Assault and Harassment Claims?

For many victims of workplace sexual assault or harassment, mandatory arbitration clauses effectively strip away their rights to any compensation or recovery. By limiting the types of damages victims can pursue, these clauses often prevent the recovery of compensation for non-economic losses like pain and suffering. Caps on economic damages can mean laughably low awards, even for serious offenses that cause significant damage to a victim’s career or earning potential. An arbitrator also may lack the authority to order equitable relief, such as requiring reinstatement of a claimant or disciplinary action against a harasser.

Proponents of the bill alleged that the confidentiality provisions in mandatory arbitration agreements contributed to protecting repeat offenders in the workplace, allowing them to continue patterns of abuse and harassment without significant repercussions. The greater transparency of litigation holds both bad actors and companies up to greater public scrutiny, encouraging appropriate disciplinary action and changes to workplace culture.

Can Claimants Still Choose Arbitration to Resolve Claims?

Yes! One factor that garnered bipartisan support for the proposed lawis the inclusion of language allowing a victim of workplace sexual harassment or assault to choose arbitration. The bill recognizes that arbitration has many benefits to both employers and claimants, including lower costs, quicker resolution of claims, and more privacy. COVID-19’s impact on the judicial system has logjammed many courts, resulting in even longer delays for civil litigation. Resolving a lawsuit can take many months (or even years), and paying legal fees for the duration can be oppressive. Choosing arbitration can allow claimants to have their claims heard much more quickly by a neutral arbitrator or panel of arbitrators so they can move on with their lives.

How Does This Bill Impact Employees?

The new legislation invalidated all existing forced arbitration clauses for workplace sexual harassment or assault claims. The protection applies to all claims that arise or accrue on or after the date the legislation takes effect. Unfortunately, workers who have cases related to events occurring before that date will still be subject to the applicable arbitration restrictions.

Legislators were careful to point out that the law only bars companies from requiring employees to use arbitration for cases related to sexual assault or harassment in the workplace. Other claims against employers, including wage theft and other harassment or discrimination claims, would still be subject to applicable mandatory arbitration clauses.

If you have been sexually harassed or sexually assaulted at work, you should contact an experienced workers’ rights attorney to discuss your options.

Tad T. Roumayah

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Tad T. Roumayah

Tad Roumayah focuses his practice primarily on employment litigation, representing employees who have encountered discrimination, retaliation, wrongful discharge, whistleblower protection claims, wage and hour violations and other employment issues and disputes.