Bi-Partisan Legislation Banning Mandatory Arbitration of Sexual Harassment Claims is Signed into Law

Last Thursday President Biden signed into law the bi-partisan legislation, “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” that amends the Federal Arbitration Act to end compulsory arbitration of sexual assault and harassment claims. The law now allows employees to sue in court with greater public visibility, although employees can voluntarily select arbitration. The Act applies retroactively to void pre-dispute arbitration agreements, including class and claim waivers. The Act defines “sexual assault” as any dispute involving nonconsensual sexual acts or conduct and “sexual harassment” as conduct that constitutes sexual harassment under any federal, Tribal, or state law. Under the Act, the court, not arbitrators, will determine the applicability of this Act to claims presented. Based on this significant legal development, employers are well-served to review their agreements and consult counsel to ensure compliance with the new law.