Congress recently passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which invalidates arbitration agreements that preclude a party from filing a lawsuit in court involving sexual assault or sexual harassment, at the election of the party alleging such conduct.  President Biden is expected to sign it into law soon.  

Specifically, under the new law, employees who previously entered into agreements requiring all employment disputes to be arbitrated, would be entitled to elect to litigate sexual assault and sexual harassment claims in court instead. In addition, if the employment agreement prospectively waived the employee’s right to joint action, they could decide to nullify that agreement as it relates to sexual assault or sexual harassment claims. Employees could still arbitrate if they prefer, but the new law would ensure that they have the option of filing such claims in court. The legislation is not retroactive, but would apply to all claims that arise after the date it is enacted. 

Employers should review their existing employment contracts and policies to ensure compliance with the new legislation. We will continue to monitor developments and any additional guidance that comes out about the law and will continue to keep you updated.