Congress Passes Bill Banning Mandatory Arbitration and Class Action Waivers for Sexual Harassment and Assault Claims

On February 10, 2022, the Senate adopted H.4445, the Act to End Forced Arbitration of Sexual Assault and Sexual Harassment (the “Act”), by voice vote. The bill had previously passed the House of Representatives by a vote of 335 to 97. The White House has indicated President Biden will sign the bill.

If signed into law, the law would amend the Federal Arbitration Act to prohibit the enforcement of binding pre-dispute arbitration agreements, as well as agreements prohibiting participation in joint, class, or collective action in any forum, “at the election of the person alleging conduct constituting a dispute of sexual harassment or sexual assault, or the designated representative of a class or in a class action alleging such conduct. The law also provides that any dispute whether a claim falls within the scope of the prohibitions of the law will be determined by a court and not an arbitrator, whether or not the arbitration agreement at issue purports to delegate such determinations to an arbitrator.

A “sexual assault dispute” is defined as “involving a non-consensual sexual act or sexual contact, as such terms are defined in Title 18 Section 2246 or similar applicable tribal or state law, including where the victim does not have the capacity to consent”. A “sexual harassment dispute” is defined as one “relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal, or state law.”

The new restrictions would apply “with respect to any dispute or claim arising on or after the date of enactment of this Act,” meaning that once enacted, millions of American workers could choose to be released from existing arbitration agreements and/or class and class action waivers with respect to sexual harassment and sexual assault claims that arise after the law takes effect. However, because the law only addresses pre-dispute arbitration agreements and class action waiver/recovery agreements, any claims arbitration agreement entered into by the parties after the claims arise remains binding.

About Michael S. Montanez

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