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Congress Passes New Law Ending Forced Arbitration For Sexual Harassment And Assault Claims

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Despite the bitter partisan divide in Congress, both the House of Representatives and Senate recently passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445). This law received extensive bipartisan support, as it passed the House 335 to 97 and the Senate by voice vote. And it’s expected to be signed into law by President Biden given his administration’s support of this proposed law. Let’s take a look at what this law does and what it means for employees.


The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021

Compared to many other laws passed by Congress H.R. 4445 is pretty short and straightforward. Basically, it amends the Federal Arbitration Act to make it easier for victims of sexual assault and/or harassment to bring suit in court and not be forced to arbitrate their legal claims. H.R. 4445 provides the following:

First, prospective plaintiffs, not the defendants, get to choose whether to litigate their sexual assault or harassment claims in court or through arbitration. Individuals are no longer forced to arbitration and have this right to choose even if they previously signed an agreement limiting their legal remedies to arbitration only.

Second, individuals may choose to bring suit individually or as a class (through a class-action lawsuit). This right also exists regardless of whether the individual signed an agreement waiving their right to collective legal action.

Third, the applicability of H.R. 4445 to a given case is to be decided under federal law and by a federal judge, not an arbitrator.

Fourth, this law would partially apply retroactively. What this means is that any existing forced arbitration clauses or contracts are now voidable, even if the individual signed the forced arbitration agreement before H.R. 4445 officially becomes law. However, prior cases that have already been completed through forced arbitration cannot be reopened and litigated in court.

Fifth, H.R. 4445 isn’t just limited to the employment context. In addition to employees, other people potentially affected by this law include clients, customers, patients and consumers. This is because many consumer services, like property leases, ridesharing apps, home improvement contracts and so on, often require the consumer to sign a contract forcing them to arbitrate any legal claims concerning sexual harassment or assault (instead of going to court).


Why H.R. 4445 Is So Important

This new law is more than just giving victims of sexual harassment and assault “their day in court.” It’s also about forcing companies to put more effort into addressing sexual assault or harassment claims.

Now that companies know it’s far more likely allegations of sexual misconduct could result in a public lawsuit, they will try harder to prevent it from happening in the first place. It’s true that arbitration isn’t always confidential. However, it’s usually easier for a company-defendant to keep what goes on during arbitration private compared to a conventional civil suit in state or federal court.

So H.R. 4445 is also about greater transparency. As we’ve seen with the #MeToo movement, sometimes it’s not a legal judgment or court case that will motivate companies to change. Instead, it’s an incident or allegation going viral and/or becoming a major topic of discussion from the water cooler to the dinner table.

When things aren’t public, it’s all too easy for companies to make sexual harassment claims go away by offering the accuser a confidential settlement. Sure, this might bring justice to that particular victim. But the confidential nature of the settlement means that the harasser can more easily find a new victim.

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