President Expected to Sign Mandatory Arbitration Ban for Sexual-Harassment Claims

Lisa Nagele-Piazza, J.D., SHRM-SCP By Lisa Nagele-Piazza, J.D., SHRM-SCP February 11, 2022
woman reading contract

A bill has been sent to the president's desk that would ban pre-dispute employment arbitration agreements for sexual-harassment and sexual-assault claims.

The House overwhelmingly approved H.R. 4445 in a 335-97 vote on Feb. 7. The Senate passed the measure on Feb. 10, and President Joe Biden is expected to sign the bill into law.

"This bipartisan, bicameral legislation empowers survivors of sexual assault and sexual harassment by giving them a choice to go to court instead of being forced into arbitration," the White House said in a statement.

We've gathered articles on the news from SHRM Online and other media outlets.

Employees Can Still Choose Arbitration

Although the bill bans pre-dispute agreements to arbitrate sexual-harassment claims, employees can opt for arbitration after the claim arises.  "You will have survivors of sexual assault or sexual harassment who may not want to go to court," said Rep. Cheri Bustos, D-Ill.

A spokesperson for Bustos said, "The bill would apply to any new claims, regardless of when the bad behavior occurred and barring any state or local law that might limit when a claim is brought."

(NBC News) and (Bloomberg Law

The Details

"Effectively, the bill says that any arbitration agreement signed before a claim or dispute involving sexual assault or sexual harassment arises is voidable at the option of the individual with the claim," said Eric B. Meyer, an attorney with FisherBroyles in Philadelphia. "In plain English, if my employer requires me to sign an arbitration agreement and someone later sexually assaults/harasses me, I can arbitrate my claims if I want. Or I can sue in court under state or federal law or both. It's entirely up to me."

The proposed legislation would also apply to sexual-harassment and sexual-assault claims brought in a joint, class or collective action.

(The Employer Handbook)

Significant Workplace Reform

The bill's supporters say it gives survivors the choice to speak publicly about their experiences and about how to pursue their claims. "This bill is one of the most significant workplace reforms in American history and is a major step forward toward changing a system that uses secrecy to protect perpetrators and silence survivors," said Sen. Kirsten Gillibrand, D-N.Y.

(The Wall Street Journal)

Check State Law

Employers should note that some states, including California and New York, already ban mandatory arbitration of sexual-harassment claims and that some large companies have stopped enforcing arbitration agreements in such cases.


Litigation Continues Over Broad California Ban

A California law, AB 51, which was originally set to take effect in 2020, would broadly prohibit employers from requiring workers to arbitrate state-law discrimination and labor code claims. A federal court prevented the law from taking effect initially, but a September 2021 federal appellate court decision upheld the law (Chamber of Commerce v. Bonta). This ruling is currently being challenged, and, for now, a trial court's decision enjoining enforcement of the law remains in effect. In the meantime, employers in the state are encouraged to consult with counsel regarding their arbitration agreements.

(SHRM Online)



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