On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 into law. The Act amends the Federal Arbitration Act and outlaws forced arbitration in sexual assault and sexual harassment cases.
Over the last two decades, employers have increasingly resorted to forced arbitration agreements to deny their employees the right to a jury trial in the event an employment-related dispute arises between them. Many employers require new employees to give up their rights to a jury trial by signing arbitration agreements as a condition of employment — if you don’t sign, you don’t work. Often these arbitration agreements are hidden among the piles of documents new employees are required to sign, frequently without sufficient time to review the documents. The result is that many employees aren’t even aware that they’ve signed away their rights to a jury trial. A 2017 report by the Economic Policy Institute estimated that as many as 56% of non-union employees in the U.S. are subject to forced arbitration.((Alexander J.S. Colvin, The growing use of mandatory arbitration: Access to the courts is now barred for more than 60 million American workers, https://www.epi.org/publication/the-growing-use-of-mandatory-arbitration-access-to-the-courts-is-now-barred-for-more-than-60-million-american-workers/)) By contrast, in 1992 only about 2% of the workforce in the U.S. had signed forced arbitration agreements.
Employers often attempt to justify forced arbitration agreements by claiming that arbitration is a faster, more efficient way to resolve legal disputes. In reality, forced arbitration is designed to drastically limit the legal rights of workers, make it harder to prosecute legal claims against lawbreaking employers, and reduce the amounts injured workers can receive in compensation. Forced arbitration clauses effectively allow employers to break the law without ever being held accountable by the legal system. Arbitrations are often subject to confidentiality and non-disclosure requirements and, as a result, take place in secret making it easier for lawbreaking employers to hide their bad acts.
For the time being, employers can still mandate that employees arbitrate non-sexual harassment-related claims as a condition of employment. Additionally, this new law only applies to sexual harassment and sexual assault claims arising after March 2, 2022. However, effective March 3, 2022, thanks to the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, employers can no longer force employees who have been the victims of sexual assault or sexual harassment to arbitrate their claims even if the employee signed an arbitration agreement in the past. This step is hopefully the beginning of the end of arbitration in all settings.
If you have questions about whether you are subject to an arbitration agreement at your job contact the employment attorneys at Abney Law for a free consultation today.