On March 3, 2022, President Joe Biden signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” commonly referred to as the “Me Too” law. The act, which amends the Federal Arbitration Act and becomes effective immediately, prevents employers from utilizing employment agreements that require mandatory arbitration of workplace sexual assault and harassment claims — enabling victims of the same to pursue relief through the courts if they so desire.
What does the bill say?
The main provision of the bill is short and to the point, stating:
“[A]t the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.”
What does the bill do?
- First, employers may no longer require the arbitration of claims of sexual harassment or sexual assault brought under federal or state law.
- Second, employees are prohibited from waiving their right to bring claims of sexual assault or sexual harassment via a class action.
- Third, the act applies to claims of both sexual harassment and sexual assault, and is not limited to employment disputes. Thus, to the extent an organization’s terms of service, or some other agreement, mandates arbitration of claims of sexual assault brought by a customer against an employee, such provisions are no longer enforceable.
- Fourth, because the act states that it “appl[ies] . . . to any dispute or claim that arises or accrues on or after the date of enactment of the Act,” even arbitration agreements currently in effect are impacted.
- Fifth, where applicable, the act does not prevent an employee from voluntarily choosing to arbitrate their claims.
- Finally, the act tasks the courts, not arbitrators, with determining whether the new law applies, regardless of the language contained in any arbitration agreement.
What does the bill not do?
Subject to applicable law, employers remain free to mandate arbitration or waiver of class action rights for most other forms of employment claims, including wage claims and other types of discrimination.
Next Steps and Takeaways
If your company does not mandate arbitration of sexual harassment and/or sexual assault claims, this act likely changes nothing for your business.
However, if your company does require its employees (or customers) to agree to mandatory arbitration of such claims, you may want to review and revise the terms of such agreements. Importantly, many such agreements will exempt claims that cannot be arbitrated under applicable law. If your agreements contain similar language, it may not be necessary to go through the expense of having your employees re-execute new agreements, but it is advisable to make prospective changes to your agreements for new employees.
On the practical side, the primary emphasis should always remain on prevention, regardless of the forum in which disputes are resolved. With this change in the law, employers would be wise to assess the steps they are taking to address the prevention of sexual harassment and sexual assault in the workplace, including:
- Ensuring their anti-harassment policy complies with best practices and all federal, state, and local laws.
- Regularly training all employees on their policy and reporting procedures.
- Regularly training supervisors and managers on their obligation to report any concerns of sexual harassment or sexual assault to human resources so an appropriate investigation can be initiated.
Importantly, as with any changes to the state of employment law, this act will likely be subject to many challenges regarding its scope in the coming months. If you intend to utilize arbitration agreements moving forward, it is advisable to remain up to date on any court decisions affecting the scope or enforceability of this act.
Finally, if you have any questions about this development or how to properly address sexual assault and harassment in the workplace before you end up on the wrong side of a complaint, we encourage you to contact an experienced employment law attorney.