Federal Ban on Pre-Dispute Arbitration Agreements Covering Sexual Assault or Sexual Harassment Claims Signed by President Biden
On March 3, 2022, President Biden signed H.R. 4445, known as the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” H.R. 4445 amends the Federal Arbitration Act to bar pre-dispute arbitration agreements of claims alleging sexual assault or sexual harassment, and includes a bar against any waivers of the right to bring such claims jointly and/or on a class basis.
H.R. 4445 will apply to any dispute or claim that arises or accrues on or after March 3, 2022, the date H.R. 4445 became law. Under H.R. 4445, an employee may agree to mandatory arbitration after an incident occurs. For example, an employee who claims sexual harassment on or after March 3, 2022 and signed an arbitration agreement at the time of hire has the option of suing in court or proceeding in arbitration.
H.R. 4445 applies to arbitration agreements signed before disputes arise relating specifically to 1) sexual assault and 2) sexual harassment as defined by state, federal, or Tribal law. This means that H.R. 4445 applies to claims under California’s Fair Employment and Housing Act and Title VII.
Employers in all states, including California and Nevada should seek the advice of qualified employment counsel about using arbitration agreements with employees in light of this new law.