The President has signed a bill prohibiting mandatory arbitration of sexual harassment and sexual assault claims. The law’s name is a mouthful, the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.”
The new law also forbids mandatory waivers of an employee’s right to bring class actions or their cousins, “collective actions.”
The Act states the predispute mandatory agreements are invalid and unenforceable with respect to “cases” involving sexual harassment or sexual assault; that would seem to suggest that if other claims are brought in case with sexual harassment or sexual assault claims, none of the claims would be subject to mandatory arbitration.
The law does not forbid agreements to arbitrate disputes after they arise. Like that’s going to happen very often….
The applicability of the Act to a dispute must be decided by a judge, not an arbitrator. That may sound a bit mundane, but it’s actually very important.
The Act was signed March 3rd, and applies to any claim or dispute that arises “or accrues” on or after the date of enactment.
We will now see if Congress and the President have any appetite to extend the ban on arbitration to other kinds of employment claims or even to claims outside the employment realm.