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New law ends mandatory arbitration for sexual misconduct cases

On Behalf of | Mar 8, 2022 | Workplace Sexual Harassment |

A new federal law has ended the ability of employers to require employees to use arbitration to settle claims of sexual abuse or harassment. This law, called the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, passed with bipartisan support in Congress and was signed shortly thereafter by President Joe Biden.

Mandatory arbitration clauses are a part of many employment contracts. Some 60 million American employees have them in one contract or another.  They’re also included in many contracts between service providers and customers as well as between doctors and patients.

Mandatory arbitration has “shielded perpetrators”

While arbitration is often preferable to going to court, when used to settle sexual misconduct claims, it has “shielded perpetrators and silenced survivors,” as President Biden noted at the signing ceremony. This has allowed those with a history of sexual misconduct to more easily continue their behavior with unsuspecting employees and allowed companies to escape the reputational harm that comes with being known for allowing and even encouraging sexual misconduct. As the president put it, the secrecy around forced arbitration has also “kept survivors from knowing if others have experienced the same thing.”

The law doesn’t take away the choice of employees to use arbitration for those claims. However, as President Biden said, “It should be their choice and nobody else’s choice.”

Victims can still be silenced by NDAs

The new law doesn’t just apply to contracts signed going forward. It applies retroactively to contracts already in place. It’s important to note, however, that the law doesn’t address non-disclosure agreements (NDAs) that have also been widely used to prevent people from speaking out. In many cases, these NDAs have been part of the settlement reached with sexual harassment, abuse and assault victims. These have yet to be prohibited for sexual misconduct cases under federal law. Although, if a case is settled in court, it’s more likely to become public regardless of any NDAs.

If you have been the victim of sexual harassment, abuse or assault in the workplace, it’s crucial to determine what your best course of action is if your employer doesn’t take the appropriate steps. It may be worthwhile to seek legal advice.


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