As anticipated, on March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The law takes effect immediately.
As we previously reported, Congress passed the law in February which allows employees who previously entered into agreements requiring all employment disputes to be arbitrated to be entitled to elect to litigate sexual assault and sexual harassment claims in court instead. In addition, if the employment agreement prospectively waived the employee’s right to joint action, they could decide to nullify that agreement as it relates to sexual assault or sexual harassment claims. Employees could still arbitrate if they prefer, but the new law would ensure that they have the option of filing such claims in court. The legislation is not retroactive, and applies only to claims that arise on or after March 3, 2022.
In light of the new law, employers should consider whether to modify their arbitration agreements and class or collective action waivers, including those contained in employment agreements. Should you have any questions or if you need assistance, please contact ALG.