On February 10, 2022, Congress passed the landmark #MeToo bill. H.R. 4445, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, amends the Federal Arbitration Act (FAA) and will prohibit the enforcement of contract provisions that mandate third-party arbitration for workplace sexual harassment and assault claims.
This new bill, which gained bipartisan support, is a significant step in protecting victims of workplace sexual harassment and assault. Instead of being forced to settle their claims in a legally binding out of court process without the right to appeal, victims of sexual harassment and assault can now bring their claims to court.
H.R. 4445 will cover all claims of sexual harassment or assault whether they arise under federal, state, local, or tribal law. Title VII defines sexual harassment as, “unwelcome conduct that is based on sex (including sexual orientation, gender identity, or pregnancy) where enduring the offensive conduct becomes a condition of continued employment, or the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive”.
It is important to note that this bill does not completely prohibit entering arbitration for sexual harassment or assault claims. The #MeToo bill gives the employee a choice in the matter. The employee can still elect to participate in arbitration if they choose.
More than 60 million American workers are currently subject to mandatory arbitration clauses in their employee contracts. Arbitration clauses require that any workplace claims, or disputes are to be resolved by using a third-party out of court arbitrator. Agreements reached in arbitration are legally binding and cannot be appealed.
Over the past few years as the #MeToo movement gained momentum, this movement shed light on the fact that mandatory arbitration clauses silence the victims of workplace sexual harassment and assault. If a victim had a sexual harassment or assault claim, they would be forced into a confidential dispute forum without the right to file a claim against their aggressor in court.
Arbitration clauses disproportionately favor employers and therefore can end up shielding repeat violators of the law and keep allegations hidden from the public. The goal of the #MeToo bill is to allow victims of sexual assault and harassment in the workplace the freedom to pursue their claims outside of arbitration and in a court of law.
Arbitration clauses are common in employee contracts. Companies, especially larger companies that may garner media attention, prefer arbitration because it keeps disputes and unsavory claims against the company out of the public eye.
With the passing of H.R. 4445, employers will no longer be able to force employees into arbitration if there is a claim of sexual harassment or sexual assault. Employers still can enforce mandatory arbitration for other claims in the workplace.
Employers should also be aware that this bill is retroactive and invalidates any pre-dispute agreements entered prior to its enactment. However, it is not retroactive for claims. This bill only applies to claims that arise on or after the date of enactment.
Employers who use arbitration clauses in their employee contracts should begin to reassess and revise their contracts. Employers should also monitor litigation surrounding this new bill to help determine the scope and application of H.R. 4445.
In light of this bill, employers should take time to review their workplace anti-harassment policies, procedures, and training, to ensure all policies are updated and employees are informed.
This bill allows victims to pursue sexual assault and sexual harassment claims publicly in court. This will bring previously confidential claims into the public eye and could have consequences for companies who benefited from the privacy that forced arbitration afforded.
It is difficult to tell the consequences this bill will have moving forward because it has not yet been determined how courts will enforce and apply the #MeToo bill. Courts will have to interpret phrases like when the dispute or claim “arises or accrues”. Does this mean when the assault or harassment occurred or when it was reported?
It is yet to be determined how H.B. 4445 will interact with other employee contract clauses like confidentiality agreements and non-disparagement clauses and whether other claims like race discrimination claims can be pursued in court along with the sexual harassment or assault claims.
If you feel that you are being taken advantage of and a victim of sexual harassment, you should speak with the attorneys at Moshes Law.
About the Author
Gennady Litvin, Esq. is an associate with Law Office of Yuriy Moshes, P.C. Mr. Litvin graduated Pace university with a Bachelor’s Degree in Business Economics, and earned his J.D. at the University of Miami School of Law where he was a member of the Business Law Review.