[co-author: Hannah May]*

This morning, the United States Senate passed a bill creating the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” The U.S. House of Representatives passed the bill earlier this week, meaning the bill is heading to President Biden’s desk for signing into law. If signed, the legislation will prohibit employers from relying on mandatory arbitration agreements to force disputes relating to allegations of sexual harassment or assault into arbitration as opposed to proceeding in court.

If the Act passes, pre-dispute arbitration clauses and class action waivers in agreements, such as employment contracts, would be void as applied to sexual harassment or assault claims. Notably, the proposed legislation only applies to sexual harassment and assault; it does not apply to sex discrimination, or harassment or assault based on a protected status other than sex. Therefore, the proposed law does not stop employers from requiring non-disclosure agreements or affect mandatory arbitration for other types of employment related lawsuits where the plaintiff or named representative of the class alleges conduct unrelated to sexual harassment or sexual assault.

The legislation was first introduced in the Senate in 2017, by Senator Kristen Gillibrand and Senator Lindsay Graham following Gretchen Carlson’s 2016 case against Fox News, as well as other high profile sexual harassment claims against employers, such as the numerous claims made against Harvey Weinstein and Miramax. The bill was passed in the House on a bipartisan basis, passing with a vote of 335-97 on Monday, and quickly passed in the Senate this morning. The bill is expected to be signed by President Biden.

Practice Pointer:

Many employers rely on mandatory arbitration agreements to keep employment disputes out of court, to reduce exposure to class or collective action litigation, and to keep the details of employment disputes confidential. This proposed legislation does not prohibit the use of mandatory arbitration agreements in all cases, but it will prohibit public and private sector employers from enforcing such agreements to keep claims involving allegations of sexual assault or sexual harassment out of the court system.

*Third-year law student at Loyola University Chicago School of Law and a Loyola Education Practicum Student at Franczek P.C. The Practicum, part of Loyola’s education law curriculum, was created to provide law students with practical experience at education law firms and organizations. Students receive academic credit for their Practicum experience.