February 11, 2022
Congress’ recent passage of legislation banning mandatory arbitration for sexual harassment and assault claims marked a rare bipartisan effort to make a meaningful change to federal employment law.
Experts told Law360 that aside from legislation created in response to the COVID-19 pandemic, they believe the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act is the first big workplace reform law since the Lilly Ledbetter Fair Pay Act of 2009, as well as the most significant arbitration law in recent memory.
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It’s a Big Deal for Everybody
If signed by Biden, the bill will modify the Federal Arbitration Act to invalidate predispute mandatory arbitration agreements for workers who claim they were subjected to sexual harassment or assault. Proponents of the bill have said it would give employees the ability to choose where and how they pursue such claims.
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There remains widespread disagreement over whether the arbitration process is fair, or favors employers over workers. Several experts also noted that some victims of workplace sexual misconduct may in fact prefer arbitration because of its confidential nature, given the intimate nature of their claims.
But Julie G. Reiser, a partner at plaintiff-side Cohen Milstein Sellers & Toll PLLC, said she’s “relieved” that the bill passed, saying it at least gives victims and survivors agency in how they pursue those claims.
“I do think there are instances where the parties can agree to an arbitrator, after the misconduct is known, and that’s their choice. But the idea that as a term and condition of your employment, you must agree to mandatory arbitration, is what bothers me,” she said.
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Tip of the Iceberg?
Adler-Paindiris noted that the Biden administration has expressed interest in broadening the arbitration ban to other kinds of claims.
“I think this could be the tip of the iceberg,” she said. “I think that this type of exclusion about mandatory arbitration could be expanded.”
Cohen Milstein’s Reiser referenced California’s “Silenced No More” Act, which went into effect last month and broadened restrictions on the use of nondisclosure agreements when settling employees’ bias and harassment lawsuits. She said she’s rooting for bipartisan support for a similar law on the federal level.
“It would not surprise me if this legislation gets expanded in several years,” she said of the new federal bill, later adding, “It would be even better if the statute extends to other forms of workplace discrimination, including race.”
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