Congress Passes Ban on Mandatory Arbitration of Sexual Harassment and Assault Claims

SESCO Management Consultants

• · The U.S. House of Representatives and Senate have passed legislation that will invalidate and render unenforceable mandatory arbitration clauses in cases “relating to sexual harassment disputes or sexual assault disputes.” The legislation is now only an expected President Biden signature away from becoming law.
• · Assuming its enactment, the legislation will apply to “any dispute or claim that arises or accrues on or after the date of enactment,” meaning it will not retroactively apply to ongoing arbitrations but will take immediate effect going forward.
• · To invoke the protections of the bill and nullify a mandatory arbitration provision as to the entire case, employers with mandatory arbitration provisions may start to see claims of sexual harassment or sexual assault inserted into cases primarily concerning other protected categories or activities.
• · While the legislation does not go so far as to invalidate a mandatory arbitration clause in any context just because it is written broadly enough to encompass a sexual assault dispute or sexual harassment dispute, employers should still review their mandatory arbitration agreements and consider revising them to carve out claims of sexual assault and sexual harassment.

If employers have any questions or concerns, we recommend they contact us to ensure compliance. For assistance, contact us at 423-764-4127 or by email at [email protected]

To ensure that you are receiving the most up to date information, please subscribe to SESCO News Blasts.