On December 6, 2017, legislation was introduced known as the “Ending Forced Arbitration of Sexual Harassment Act,” which would invalidate the use of mandatory arbitration agreements to resolve disputes involving sexual harassment and discrimination claims falling under Title VII of the Civil Rights Act of 1964.
The legislation, which emerged in response to the plethora of sexual harassment allegations making their way into the daily headlines, would amend the Federal Arbitration Act (FAA) to make pre-dispute arbitration agreements unenforceable. Although the bill has bipartisan support, it will likely be opposed, at least partly, due to its broad reach. Despite its title indicating that it is only meant to target mandatory arbitration of sexual discrimination claims, the legislation as currently drafted applies to all employment contract claims, not just those involving sexual harassment and discrimination.
If passed, the law would make arbitration provisions falling within the broad purview of the FAA, including class action waivers, unenforceable as to employee sexual harassment and other sex discrimination claims. Notably, because of its potential scope, the bill could invalidate significant portions, if not all, of the type of arbitration agreements with class action waivers now being considered by the U.S. Supreme Court, regardless of the Court’s ultimate ruling. See Epic Systems Corp. v. Lewis, No. 16-285, Ernst & Young LLP v. Morris, No. 16-300, and NLRB v. Murphy Oil USA No. 16-307. For a description of the three pending cases, see our blog post here.
Although the bill may be amended, due to its support there’s a good chance it will become law. We will continue to update you on developments of this bill.