Senate Passes Bill by Unanimous Consent
On February 10, 2022, the United States Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act by rare unanimous consent. The House passed the bill earlier that week in a 335-97 vote. The bill bars employment contracts from forcing people to settle sexual assault or harassment claims through arbitration rather than in court, stating in relevant part: “[N]o 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 dispute or the sexual harassment dispute.”
A sexual assault dispute is defined as “a dispute involving a nonconsensual sexual act or sexual contact. . .including when the victim lacks capacity to consent.” A sexual harassment dispute is defined as “a dispute relating to any of the following conduct directed at an individual or group of individuals:
The bill is retroactive, meaning it applies even to employment contracts written and entered into prior to the bill’s passing.
It is estimated that 60 million American workers have employment contracts that require them to settle allegations of sexual misconduct in private arbitration proceedings. Critics have long condemned this practice of keeping private what is often systemic misconduct in the workplace, and these concerns were only amplified by the #MeToo movement.
The bill’s language does not automatically render all such provisions of employment contracts as unenforceable but requires the person resisting arbitration to affirmatively challenge the arbitration agreement and gives them the footing to have a mandatory arbitration clause under the Act declared invalid or unenforceable by a court.
A sexual assault dispute is defined as “a dispute involving a nonconsensual sexual act or sexual contact. . .including when the victim lacks capacity to consent.” A sexual harassment dispute is defined as “a dispute relating to any of the following conduct directed at an individual or group of individuals:
- Unwelcome sexual advances.
- Unwanted physical contact that is sexual in nature, including assault.
- Unwanted sexual attention, including unwanted sexual comments and propositions for sexual activity.
- Conditioning professional, educational, consumer, health care, or long-term care benefits on sexual activity.
- Retaliation for rejecting unwanted sexual attention.
The bill is retroactive, meaning it applies even to employment contracts written and entered into prior to the bill’s passing.
It is estimated that 60 million American workers have employment contracts that require them to settle allegations of sexual misconduct in private arbitration proceedings. Critics have long condemned this practice of keeping private what is often systemic misconduct in the workplace, and these concerns were only amplified by the #MeToo movement.
The bill’s language does not automatically render all such provisions of employment contracts as unenforceable but requires the person resisting arbitration to affirmatively challenge the arbitration agreement and gives them the footing to have a mandatory arbitration clause under the Act declared invalid or unenforceable by a court.
Why an Employee Might Want to Arbitrate
The Act does not automatically render all arbitration provisions covered by the bill unenforceable, meaning an employee may still elect to arbitrate a sexual misconduct claim. There are a few reasons why an employee may choose to do so. For example, the relaxed rules of evidence and the greater control parties old in the process can make it simpler and perhaps more rewarding, giving employees the opportunity to speak for themselves knowing their statements will remain confidential. Arbitration can also resolve quicker than litigation.
Why an Employee Would Want to Avoid Arbitration
With the exception of the few appealing characteristics mentioned above that apply only in particular circumstances, the private resolution of these claims in arbitration most often serves to benefit the employer. The conclusion of arbitration is usually accompanied by a non-disclosure agreement, making the outcome contingent upon the continued silence of the parties.
Not only does this prevent other employees and interested parties from hearing about acts of sexual misconduct at the workplace and how they were handled by management, but it inhibits any efforts of forming a class action and may fail to lead to any meaningful change to insufficient employment policies and practices. Monetary damages—often the sole remedy provided in arbitration—may not be enough to deter ongoing and systemic misconduct. Forced arbitration can make it more likely that employer will continue violating workers’ rights.
These concerns do not even address the possibility of bias in the arbitration process. Some employers have arbitrators on retainer, meaning the decisionmaker deciding whether an employer violated an employment law may be on that employer’s payroll. Employees also face a high bar if they later seek to vacate an arbitration award.
Not only does this prevent other employees and interested parties from hearing about acts of sexual misconduct at the workplace and how they were handled by management, but it inhibits any efforts of forming a class action and may fail to lead to any meaningful change to insufficient employment policies and practices. Monetary damages—often the sole remedy provided in arbitration—may not be enough to deter ongoing and systemic misconduct. Forced arbitration can make it more likely that employer will continue violating workers’ rights.
These concerns do not even address the possibility of bias in the arbitration process. Some employers have arbitrators on retainer, meaning the decisionmaker deciding whether an employer violated an employment law may be on that employer’s payroll. Employees also face a high bar if they later seek to vacate an arbitration award.
Takeaway
The newly-passed Act is a win for the millions of workers subject to forced arbitration of sexual misconduct claims and advocates for workers' rights and greater transparency in U.S. workplaces. While employees may still elect to arbitrate, they are no longer forced to do so, even if they entered into an arbitration agreement or class action waiver prior to the bill's enactment.
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