Now is the time for employers to carefully review any arbitration or employment agreements they have in place. On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (HR 4445).
In cases of sexual assault or harassment in the workplace, many employers ask employees to sign arbitration agreements. In this case, employees give up their right to sue in court over job-related issues. Previously, an employee could not take their case to court but instead had to go to a private arbitration forum.
The Chair of the U.S. Equal Employment Opportunity Commission (EEOC) also released a statement about the act.
The Act ends forced arbitration in workplace sexual assault or harassment cases and allows employees to file lawsuits in court against perpetrators. Employees can also choose how to pursue their claims, individually or through a class-action lawsuit. Individuals are no longer forced into arbitration and have the right to choose, even if they previously signed an agreement limiting their legal remedies to arbitration only.
“This law will affect the more than 60 million workers who are subject to mandatory arbitration clauses in the workplace, often without realizing it until they come forward with a claim against their employer.” – White House press briefing
The Act went into effect immediately and applied to disputes from March 3.
What to do next
Employers that ask employees to sign arbitration agreements should begin reviewing those documents. Partner with an employment attorney to review the language in any of your current agreements.
You may find that employee handbooks will need an update. We also recommend making these changes with the help of an attorney.
While we cannot provide legal advice, Nextep HR experts are happy to help our clients update handbooks with recommendations from an employment attorney. Contact us online or at 888.811.5150.