President Biden Signs Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act into Law

Five years after actress Alyssa Milano brought the term #MeToo into the mainstream, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act is officially federal law.  Congress passed the law with bipartisan support on February 10, 2022, and President Biden officially signed it on March 3, 2022.  The law is effective immediately.

The law will apply to all sexual assault or sexual harassment disputes that arise on or after March 3, 2022.  It defines sexual assault dispute as a dispute involving a nonconsensual sexual act or sexual contact, including when the victim lacks capacity to consent. A sexual harassment dispute is defined as a dispute relating to: (a) unwelcome sexual advances; (b) unwanted physical contact that is sexual in nature, including assault; (c) unwanted sexual attention, including unwanted sexual comments and propositions for sexual activity; (d) conditioning professional, educational, consumer, health care, or long-term care benefits on sexual activity; or (e) retaliation for rejecting unwanted sexual attention.

The law gives individual employees the ability to elect whether a pre-dispute arbitration agreement would be considered valid and enforceable as it pertains to their individual sexual harassment or sexual assault dispute.  The same is true of any pre-dispute class and collective action waivers; individual employees have the discretion as to the enforceability of the waiver agreements.  These provisions cover any agreement involving sexual assault or sexual harassment claims regardless of whether they arise under federal, state, local, or tribal law.

Beyond this, the law mandates that courts decide the question of whether the new law applies to a specific dispute or a specific agreement.  Any provisions in the arbitration agreement delegating such issues to the arbitrator are invalid under the law.  Altogether, the law represents a seismic shift on the playing field between employers and employees in the context of sexual assault and sexual harassment claims.

Employers should note that the law does not impact post-dispute arbitration agreements or class and collective action waivers.  Practically speaking, this may not make a huge difference. However, from a technical standpoint it does mean that employers may choose to offer employees an opportunity to enter into an arbitration agreement after such disputes or claims have arisen.  Employers should also take notice that the law does not affect ongoing arbitrations, nor does it invalidate arbitration agreements to the extent that an employee has asserted claims prior to March 3.

Now is a good time to have in-house counsel or outside counsel review and revise existing arbitration agreements or employment contracts containing dispute resolution clauses in order to avoid issues in the immediate future.  Experts say that arbitration agreements in general are under scrutiny on Capitol Hill and we could see more legislation aimed at limiting the applicability of such agreements in future legislative sessions.  As always, O’Hagan Meyer’s experienced attorneys and advisors are willing and able to assist you in navigating all aspects of the Ending Forced Arbitration Act.

Authored by: Michael D. Pierce, Esq.