You can no longer force employees to arbitrate sexual harassment claims

Inspired by the #MeToo movement, the U.S. Senate recently passed H.R. 4445, an amendment to the Federal Arbitration Act (FAA), also known as the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” The acronym would be “EFASASHA,” but that looks kind of silly, so we’ll refer to it as the “Act.” President Joe Biden signed the bill into law on March 3, 2022.

If your employees have signed predispute arbitration agreements (e.g., as part of a contract or offer letter), they can no longer be forced to arbitrate cases involving sexual harassment or sexual assault. The Act also prohibits employers from requiring employees to sign agreements waiving their right to file sexual harassment/sexual assault claims jointly or on a class basis.

Key definitions and legislation summary

The Act defines the term “sexual assault dispute” as a “dispute involving a nonconsensual sexual act or sexual contact . . . including when the victim lacks capacity to consent.” It defines “sexual harassment dispute” as a “dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.”

The Act amends the FAA as follows: