Employment Update: Forced Arbitration In Sexual Harassment Cases

On February 10, 2022, the U.S. Senate passed H.R. 4445, entitled "Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021." The purpose of this Act is to outlaw forced arbitration clauses and joint-action waivers in employment contracts for sexual harassment and assault cases.

The Act, which is soon expected to be signed by President Biden, renders mandatory arbitration clauses and joint-action waivers for these type of claims unenforceable. The Act is silent as to whether these provisions will be enforced in similar cases involving, for example, claims of racial harassment, age discrimination, etc.

The Act expressly applies "to any dispute or claim that arises or accrues on or after the date of enactment." Whether a claim filed after enactment of the Act based on conduct that occurred prior to enactment will be exempt from arbitration and class action remains to be seen, but plaintiffs' attorneys will surely favor of such a reading.