Arbitration Agreements and Class Action Waivers on Sexual Assault and Sexual Harassment

On March 3, 2022, President Joe Biden signed a law that limits the use of pre-dispute arbitration agreements and class action waivers covering sexual assault and sexual harassment claims.

President Biden has signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The Act amends the Federal Arbitration Act (FAA) to give employees who are parties to arbitration agreements with their employers the option of bringing claims of sexual assault or sexual harassment either in arbitration or in court. The FAA provides that written agreements to arbitrate are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 

The Act amends the FAA to include a new section, which states, in part: 

"[A]t the election of the person alleging conduct constituting a sexual harassment dispute or a sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute."

1. ​The Act gives employees the option to invalidate arbitration agreements and class or collective action waivers with respect to sexual assault and sexual harassment claims. This means employees may choose to either arbitrate these claims or pursue them in court regardless of any contractual agreements with their employers. 

2. The Act applies to all claims that arise or accrue after March 3, 2022, regardless of the date of the agreement at issue. The Act, however, does not affect claims that arose or accrued before March 3, 2022.

3. The Act does not affect otherwise valid arbitration agreements for claims that are not related sexual assault and sexual harassment.

4. Future litigation is anticipated over the scope and interpretation of this law.

What Employees Should Know

The National Sexual Violence Resource Center estimates that only 25% of sexual assaults are reported to the police, with false reports estimated between 2 to 10 percent of total reports. The Data Analysis team at Zippia research had studied and concluded the following regarding workplace sexual harassments: 

• Most women — between 54% and 81% — report experiencing some level of sexual harassment at work.

• Despite this prevalence, between 58% and 72% of victims don't report instances of workplace sexual harassment.

• Workers in accommodation and food services account for 14% of harassment charges. This number increases in academia, with 50% of female faculty and staff and between 20% and 50% of female students encountering sexual harassment.

• Workplace sexual harassment costs companies $2.6 billion in lost productivity and $0.9 billion in other costs.

• Half of the women (50%) who were victims of sexual harassment stated that it hurt their careers.

• While most adults (74%) believe their companies take sexual harassment seriously, only 30% of women strongly agree that their employer properly handled harassment incidents.

Zippia

These studies provide significant data on the prevalence of workplace sexual assault and harassment. Knowing that most employees who are victims of this behavior will never speak up, it is important to understand that you are far from alone. This issue will not be going away any time soon and it is imperative that you report to your supervisor, or Human resources any instance of Sexual harassment before the behavior worsens or becomes dangerous. 

With the passing of this law, we anticipate that more victims of sexual assault and harassment will be willing to speak up, knowing that they will in fact be able to have their day in court. Although arbitration agreements do allow for a speedy, cost-effective resolution for the company; arbitration often limits discovery and provides confidential decisions, preventing others from learning of these dangerous injustices and preventing other employees from gathering the courage to speak of their own experience by the hands of some of these same bad actors. If you believe you have been subject to Sexual Assault or Sexual Harassment in the workplace, it is important that you report the behavior within the Company, to the EEOC if necessary, and if your employer decides to take any adverse employment action against you for filing a report, contact an attorney skilled in sex based discrimination or harassment immediately to discuss the next steps.