Arbitration clauses and waivers are agreements between parties to arbitrate a dispute that hasn’t yet arisen at the time of the agreement; employers often include these clauses in employee contracts, and consumers may even be asked to enter into a pre-dispute arbitration agreement (with lenders, advisers, etc.). According to a study by the American Association of Justice, forced employment and consumer arbitration increased in 2020, and when arbitration occurred, only 4.1% of claimants in consumer cases and 1.6% of claimants in employment cases won monetary awards.
This past March, President Biden signed H.R. 4445, “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” into law. The passing of this legislation is a major #MeToo win as the bill aims to protect the rights of victims/survivors of workplace sexual assault or harassment.
Specifically, H.R. 4445 prohibits employers from implementing pre-dispute arbitration clauses and waivers and nullifies existing agreements between employees and employers concerning an employee’s right to bring a sexual assault or harassment case to court. It is important to note that this legislation only restricts pre-dispute arbitration and joint-action waiver agreements, so arbitration agreements entered into after a claim arises can still be enforced.
While many are happy and applauding the passage of this bill, others still have questions and concerns about how H.R. 4445 will apply to cases involving other non-covered claims. The bill protects those who may have been forced into an arbitration agreement with a business, such as contractors or patients. However, pre-dispute forced arbitration agreements and waivers can still affect those seeking justice concerning discrimination or harassment due to race, sexual orientation, religion, and other forms of discrimination.
Recommended Action for Employers
Employers should take steps to ensure they are compliant with the new law and stay up-to-date on their state laws (as state legislators may take steps to eliminate arbitration agreements entirely). Companies should also consider:
- Consulting with experienced employment law attorneys concerning how to deal with future disputes and revise their existing policies/agreements
- Revising their existing pre-dispute arbitration agreements to remove sexual harassment and sexual assault claims
- Reviewing class action waivers and arbitration agreements in all employment-related contracts
Comprehensive Employment Law Services
At Badame Law Group, our legal team is dedicated to providing our clients with high-quality representation. Our attorneys have over 60 years of collective experience and are known for being fierce, determined, and attentive (to details and our clients’ needs). In ensuring that we can best help our clients and advise them of their legal options and rights, we stay abreast of legislation news and updates and can answer your questions.
If you are the victim/survivor of sexual harassment, sexual assault, or another form of discrimination, our attorneys can help you make an informed decision for your case. We are equipped to help clients navigate a wide variety of employment law issues, including:
- Class action lawsuits
- Disability & leaves of absences
- Hostile work environment
- Wage & hour disputes
- Whistleblower retaliation
- Wrongful termination
To schedule a free, initial consultation, call (949) 393-4249 or reach out to us online. While legal issues involving discrimination, sexual assault, or harassment, especially those in the workplace, can be stressful, we are here to help you alleviate the stress and handle the case legalities.