WORK WITH US
New Federal Law Prohibits Arbitration For Predispute Sexual Assault And Sexual Harassment Claims
On March 3, 2022, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (Act), which amends the Federal Arbitration Act (FAA). The Act prohibits mandatory pre-dispute arbitration agreements and class action waivers for claims of sexual harassment and sexual assault. The Act applies to future and existing arbitration agreements, but only “with respect to any dispute or claim that arises or accrues on or after” March 3, 2022. Individuals asserting such claims can now elect to bring the claims in court even if they had agreed to arbitrate such disputes before the claims arose. Additionally, the new law allows individuals to bring such claims via a class or collective action even if they previously waived those claims.
The Act also provides that a court, rather than an arbitrator, shall resolve disputes on whether a claim is a sexual assault or sexual harassment claim within the scope of the Act, even if the arbitration agreement specifically delegates that question to the arbitrator. This is a significant departure from typical practice, in which parties to delegate interpretation and applicability of arbitration agreements to an arbitrator.
Private K-12 schools, colleges, and universities should consult with an LCW attorney about the impact of this new law on existing agreements and how to proceed with new arbitration agreements moving forward.