Biden Limits Arbitration Agreements for Sexual Assault and Sexual Harassment Claims

On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which is informally known as the “#MeToo bill.” This Act amends the Federal Arbitration Act to include the following:

“[A]t the election of the person alleging conduct constituting a sexual harassment dispute or a sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.”

This means that employees who file sexual assault or sexual harassment claims may litigate their claims in court, despite having previously agreed to arbitrate. Further, employees may proceed with their claims on a joint, class, or collective basis, even if they previously waived that right. The Act applies to all claims or disputes that “arise or accrue” on or after March 3, 2022, regardless of when the arbitration agreement or waiver was entered into.            

The Act does not affect arbitration or waivers of claims that are unrelated to sexual harassment or sexual assault, such as wage and hour claims, or claims based on race, age, or national origin. Thus, for now, employers are likely to continue benefiting from predispute agreements and waivers. However, this may change as Biden’s Administration has indicated that it “also looks forward to working with the Congress on broader legislation that addresses these issues as well as other forced arbitration matters, including arbitration of claims regarding discrimination on the basis of race, wage theft, and unfair labor practices.”