Bipartisan bills are hard to come by in today’s political environment. Nevertheless, President Biden signed the bipartisan Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 on March 3, 2022. This law stops a company’s mandatory requirement for using arbitration to address claims of assault or harassment in the workplace. This applies to pre-dispute arbitration agreements or pre-dispute class- or collective-action waivers. Arbitration is still valid in handling other matters, but critics believe that forced arbitration unfairly limited the worker’s options for seeking justice, and it unfairly benefitted the company in these specific circumstances. Instead of arbitrators, the courts can determine the validity of the claims.
Why the change?
Arbitration is generally faster, less expensive and more straightforward than litigation. It also enabled companies to keep the details of the disputes private rather than making headlines as a business that fosters this behavior. But amid the #MeToo movement’s call for change, arbitration involving harassment or assault was associated with coverups and enabling bad behavior by managers and executives.
Former Fox News Anchor Gretchen Carlson was on hand for the signing ceremony. She is one recent high-profile advocate who accused former boss and Fox News CEO Roger Ailes of unwanted advances and damaging her career. Carlson testified before Congress about the need for this change. Public accusations by on-air personalities Carlson, Megyn Kelly, Andrea Tantaros and other employees led Ailes to step down.
What it means for businesses
The law is retroactive, so the estimated 60 million employees who signed forced arbitration agreements (sometimes without realizing it until later) now have the option to litigate. Of course, not every employee will want to go public with their claims and companies are not required to amend existing contracts. Still, companies may wish to reevaluate the process for best handling sexual assault and sexual harassment in the workplace.