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President Biden Signs Into Law Ban on Mandatory Arbitration of Sexual Harassment Claims

On March 3, 2022, President Biden signed the bill into law making it illegal to compel an employee to arbitrate a claim of sexual assault or sexual harassment. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 amends the Federal Arbitration Act (FAA) by banning mandatory arbitration of sexual assault or harassment causes, and claims of retaliation resulting from internal complaints of sexual assault or harassment, and gives claimants the option either of participating in arbitration of such claims on a voluntary basis or pursuing them in federal, state, or tribal courts.

New York has already passed laws limiting the use of mandatory arbitration provisions in sexual harassment claims, but these laws were challenged as preempted by the FAA. With this amendment to the FAA, these preemption arguments are now irrelevant.

Arbitration agreements that compel arbitration of sex/gender discrimination, Equal Pay Act, and related claims are still enforceable.Only sexual harassment claims are affected.

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