New Law Bans Forced Arbitration of Sexual Assault and Harassment Claims

By Douglas Lipsky

On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act into law. The measure amends the Federal Arbitration Act (FAA) by prohibiting employers from forcing employees to settle sexual misconduct claims in arbitration proceedings that favor big business.

Although New York State previously enacted a statute prohibiting employers’ use of arbitration agreements in sexual harassment claims, the law was preempted by the FAA. Now, workers in the state and around the country can file a lawsuit, but they still have the arbitration option. If you have been harassed at your workplace, talk to a sexual harassment lawyer.

In Focus: Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

The key takeaway of this amendment to the FAA is that employees are permitted to choose whether to litigate sexual assault or harassment claims in court or through arbitration. Also, individuals have the right to choose a venue even if they previously signed an arbitration agreement. Other key provisions of the measure include the following:

  • Plaintiffs can file individual or class-action lawsuits, regardless of whether they signed an agreement waiving their right to collective action.
  • The law applies retroactively – any existing forced arbitration clauses or contracts involving sexual harassment are now voidable. Prior claims that have already been settled through forced arbitration cannot be reopened and litigated, however.

In addition, the measure defines a sexual assault dispute as one involving a nonconsensual sexual act or sexual contact, including when the victim lacks the capacity to consent. Moreover, a sexual harassment dispute is defined to include:

  • Unwelcome sexual advances
  • Unwanted physical contact that is sexual in nature, including assault
  • Unwanted sexual attention, including sexual propositions
  • Unwanted sexual comments
  • Conditioning employment benefits on sexual activity
  • Retaliation for rejecting unwanted sexual advances or attention

Whether you have been subjected to unwanted sexual advances by a supervisor (“quid pro quo” harassment) or unwelcome comments on conduct by anyone in the workplace (e.g. supervisor, coworker, third party), you cannot be forced into arbitration and can recover damages in a sexual harassment lawsuit.

Considerations for Employers

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act is effective immediately. Although employers in New York may have already revised their arbitration agreements to comply with state law, they should take steps to ensure arbitration clauses in existing employment agreements specify that employees have the option to choose litigation or arbitration of disputes involving sexual misconduct in the workplace, and implement new arbitration agreements if necessary. 

Why This Matters

The measure gives victims of sexual harassment and assault greater legal protection and may also prompt employers to take sexual misconduct claims more seriously. Businesses will no longer be able to force aggrieved employees into closed-door arbitration, allowing perpetrators and their employers to avoid scrutiny. 

In addition to greater transparency, the law helps to level the playing field for victims of harassment because arbitration proceedings tend to be skewed in the favor of businesses and can be costly for employees. In a successful sexual harassment lawsuit, plaintiffs will be able to recover attorneys’ fees and costs. If you or someone you know has been the victim of sexual assault or harassment in the workplace, contact an experienced sexual harassment attorney. 

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.