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Federal Law Bans Mandatory Arbitration for Sexual Assault Claims

As of March 3, 2022, the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (“the Act”) took effect. The Act amends the Federal Arbitration Act and bans mandatory arbitration for sexual assault and harassment claims. The Act will cover any sexual assault claims arising after March 3, 2022. Any claim that rose prior to March 3, 2022, is still subject to mandatory arbitration. The Act applies to employees and non-employees, so employers should be sure to also amend contracts with independent contractors.

In addition to the general ban on mandatory arbitration for sexual assault claims, there are other key provisions. This federal Act applies to State, Federal, and Tribal laws. This means if an employee uses state sexual assault laws, which may be more expansive than federal law, mandatory arbitration is not allowed. In addition, Employers may no longer bar joint or class action claims for sexual assault or harassment claims.

Employers may still execute valid arbitration and waiver agreements after a sexual assault or harassment claim arises. Further, employees still may voluntarily choose to arbitrate.

The Act does not address how courts should handle multiple claims in the same lawsuit where part of the complaint contains a sexual harassment claim. Courts may interpret the Act to require all claims relating to the sexual harassment claim remain in court. Alternatively, courts could more narrowly interpret the Act and sever the claims, so the sexual harassment claim remains in court and the other claims are sent to arbitration. Future litigation is necessary to determine the full scope of the Act.

Employers should amend their current arbitration agreements to reflect the new federal law. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560