New Sexual Assault and Harassment Claims Opt-Out for Arbitration Agreements

APPLIES TO

All Employers

EFFECTIVE

March 3, 2022

QUESTIONS?

Contact HR On-Call

On March 3, 2022, the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” came into effect. The Act allows employees, at their option, to forego arbitration in the event of a sexual assault dispute or sexual harassment dispute. This means that if an employee has signed an arbitration agreement, any provision requiring arbitration, or waivers prohibiting or waiving the right to participate in a joint, class, or collective judicial, administrative, or arbitral proceeding, regarding sexual assault or sexual harassment disputes are unenforceable at their choice, and they may pursue those claims in court.

The Act defines “sexual assault dispute” as a dispute involving a nonconsensual sexual act or sexual contact, as defined under federal, tribal, or state law. Similarly, “sexual harassment dispute” is defined as a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.

The new law will apply to any dispute or claim that arises on or after the date of enactment. As a result, the Act may restrict arbitration agreements already in existence for any covered claims arising after the Act goes into effect. Notably, the Act does not impact enforceability of an arbitration agreement regarding claims for sexual discrimination or harassment on any other protected basis. Moreover, even though the Act gives employees a choice to opt out of arbitrating sexual assault and harassment claims, the remaining provisions of an arbitration agreement are not impacted. Application of the Act, arbitrability, and enforcement of an agreement must be determined by a court, not an arbitrator.

Action Items

Review the bill here.
Have arbitration agreements reviewed by legal counsel.
Have appropriate personnel trained on managing sexual harassment claims.
Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.