On February 10, 2022, the U.S. Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R.4445), previously passed by the House of Representatives on February 7, 2022. The Act, if enacted by the President, would amend the Federal Arbitration Act (FAA) to enable persons asserting claims of sexual harassment or sexual assault to elect to file their claims in court, despite having previously entered into a pre-dispute arbitration agreement (or class or collective action waivers). The Act would apply to any dispute or claim that arises or accrues after the date of the Act’s enactment. The Act further provides that the validity or enforceability of an arbitration agreement in question will be determined by a court rather than an arbitrator, despite the existence of a contractual term to the contrary.
President Biden has commented that he will sign the Act into law. Employers with mandatory pre-dispute arbitration agreements should carefully analyze their best courses of action going forward. Under this new law, if enacted, it will be up to the employee whether to continue with arbitration or file litigation in court.