Effective March 3, 2023, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act prohibits employers and others from requiring that sexual assault and sexual harassment claims be arbitrated if the operative clause was executed before the claims arose. This effectively eliminates the enforceability of blanket requirements to arbitrate imposed on employees, patients, customers, and others.
The Act also serves to prohibit a waiver of the ability of an employee, and others, who have signed agreements to arbitrate to participate in joint, class, and collective actions involving sexual harassment and sexual assault claims if the dispute arose after the date the arbitration clause, and waiver of court actions, was signed. The Act amends the Federal Arbitration Act.
A sexual assault dispute means a dispute involving a non-consensual sex act or sexual contact as defined in 18 U.S.C. § 2246 or similar Tribal or state law. This would include a situation in which the victim lacks the capacity to consent to the act.
A sexual harassment dispute means a dispute relating to conduct that is alleged to constitute sexual harassment under federal, Tribal, or state law.
Federal law will be applied to determine whether this Act applies to any dispute between parties who have entered into an agreement waiving rights to seek redress in court of a sexual assault or harassment clause, in lieu of arbitration. This includes the enforceability of an agreement to arbitrate any of the two covered disputes. Regardless of which party challenges the determination of the arbitration clause, its validity and enforceability can be challenged only to a court and not by an arbitrator. This applies to a clause requiring arbitration of these sexual claims regardless of whether other aspects of an agreement containing the clause are properly before an arbitrator who will retain jurisdiction of those other claims. Even if the agreement purports to delegate to the arbitrator the authority to determine the validity and enforceability of a prohibited arbitration clause for these two claims, only a court has the authority to make these decisions.
Clearly, this Act applies to agreements that were executed before the claim arose; parties can still agree to binding and enforceable arbitration of these sexually related claims after the claim arises. If they do, it would be wise to advise the claimant of his or her rights under the Act in a written, signed document.
It is not illegal for pre- or post-Act agreements to contain these terms, and existing agreements need not be amended to delete these unenforceable provisions. Simply put, if the claim arises after the agreement is made, the Act applies and prevents its enforcement. While the Act does not provide for sanctions should a party not amend an agreement to remove an arbitration clause or attempt to enforce an otherwise unenforceable provision to arbitrate claims of a sexual nature covered by the Act, it is easy to imagine a court granting sanctions under Rule 11 against any feckless person who violates its provisions.
Clauses entered into before the date of the Act are voidable; however, arbitrated cases that are completed are not disturbed by this Act. And finally, the Act applies to more than employees. There is nothing in its short structure that prevents its provisions from being applied to any other person who may have signed an arbitration clause, such as a customer, patient, consumer, or tenant.
Perhaps in addition to giving victims of sexual harassment and assault an opportunity to try their cases in court, the Act will force employers to take more seriously the obligation to weed these activities and actors out of their organizations, knowing that if they do not, this reckoning will be both costly and very public. We think that all human resources professionals should take careful note of this Act and advise their employer’s management.
If you have questions about the Ending Forced Arbitration of Sexual Assault and Sexual Act, please contact the author, Jim Astrachan of Goodell DeVries, at jastrachan@gdldlaw.com.
