Congress recently passed HR 4445, the Ending of Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which prohibits the enforcement of mandatory arbitration or joint class action waivers in cases of alleged sexual assault or sexual harassment. Upon President Biden’s signature on March 3, 2022, the law took effect immediately. The legislation amends the Federal Arbitration Act (FAA) and will be effective for any disputes or claims arising on or after March 3. In sum, the bill lets all those alleging sexual assault or sexual harassment to take their cases to court.
HR 4445 Inspired by #MeToo
HR 4445 was initially introduced in 2017 by Senators Kristen Gillibrand (D-New York) and Lindsay Graham (R-South Carolina). The House passed the bipartisan bill 335-97 on February 7, 2022, while the Senate approved it in a voice vote on February 10. President Biden signed HR 4445 on March 3, 2022.
The bill revises the FAA by:
- Allowing anyone, including a named representative of a class or collective action alleging sexual harassment or sexual abuse, to invalidate an arbitration agreement or class action waiver;
- Permitting employees the right to participate in joint, class, or collective actions;
- Requiring a federal district court, not an arbitrator, to determine the validity or enforceability of an arbitration or class/collective action waiver covered by HR 4445; and
- Allowing individuals to voluntarily choose to arbitrate any claims including sexual harassment and sexual assault charges provided the parties enter into the arbitration agreement after the dispute has arisen.
The bill also specifies “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 or the sexual harassment dispute.”
Next Steps for Employers
It appears employers aren’t required to revise their existing arbitration agreements as HR 4445 removes sexual harassment and sexual assault claims from the FAA. Nevertheless, you should review your arbitration agreements and consider carving out sexual harassment and sexual assault claims from new and existing agreements.
With HR 4445’s passage and similar moves in various states, now would also be a good time to (1) reconsider your approach to mandatory arbitration for racial, disability, national origin, or other types of discrimination and harassment claims and (2) determine whether the current policy still aligns with your company’s objectives after #MeToo and #BlackLivesMatter.
H. Juanita Beecher is an attorney with FortneyScott in Washington, D.C. You can reach her at nbeecher@fortneyscott.com.