Biden Signs FAA Amendment Banning Mandatory Arbitration of Sexual Assault and Sexual Harassment Claims | Practical Law

Biden Signs FAA Amendment Banning Mandatory Arbitration of Sexual Assault and Sexual Harassment Claims | Practical Law

On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445), passed with bipartisan support in Congress on February 10, 2022. The law amends the Federal Arbitration Act (FAA) and renders unenforceable, at the claimant's option, predispute arbitration agreements and joint-action waivers regarding sexual assault and sexual harassment disputes. The law is effective immediately.

Biden Signs FAA Amendment Banning Mandatory Arbitration of Sexual Assault and Sexual Harassment Claims

by Practical Law Labor & Employment
Published on 03 Mar 2022 • USA (National/Federal)
On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445), passed with bipartisan support in Congress on February 10, 2022. The law amends the Federal Arbitration Act (FAA) and renders unenforceable, at the claimant's option, predispute arbitration agreements and joint-action waivers regarding sexual assault and sexual harassment disputes. The law is effective immediately.
On February 10, 2022, after years of legislative and political debate over the issue, Congress passed with bipartisan support the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445). President Biden signed the bill into law on March 3, 2022.
Effective on enactment, the law adds a new Chapter 4 to the Federal Arbitration Act (FAA) and renders invalid and unenforceable, at the claimant's option, predispute:
  • Arbitration agreements with respect to a case relating to a sexual assault or sexual harassment dispute.
  • Joint-action waivers prohibiting or waiving the right to participate in a joint, class, or collective judicial, administrative, or arbitral proceeding relating to a sexual assault or sexual harassment dispute.
(9 U.S.C. § 402(a).)
Chapter 4 defines:
  • A "sexual assault dispute" as one "involving a nonconsensual sexual act or sexual contact" as those terms are defined in 18 U.S.C. § 2246 or similar applicable tribal or state law, including when the victim lacks capacity to consent (9 U.S.C. § 401(3)).
  • A "sexual harassment dispute" as one "relating to conduct that is alleged to be sexual harassment" under federal, state, or tribal law (9 U.S.C. § 401(4)).
Chapter 4's application must be determined:
  • Under federal law.
  • By a court, not an arbitrator, regardless of whether:
    • the objecting party challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing the arbitration agreement; or
    • any provision in the agreement purports to delegate arbitrability to an arbitrator.
(9 U.S.C. § 402(b).)
The new law applies to any dispute or claim arising or accruing on or after the date of enactment.
The law does not:
  • Restrict the enforceability of an agreement to arbitrate other employment-related claims, including:
    • sex discrimination claims; or
    • harassment claims based on other protected classes, such as race or religion.
  • Prohibit or restrict an agreement to arbitrate sexual harassment or sexual assault disputes after the claims arise.
  • Apply retroactively to preclude arbitration of claims that arose pre-enactment, but may be applied to arbitration agreements entered into before the law's enactment regarding claims arising or accruing post-enactment.
Employers should review their existing arbitration agreements in light of the new law and consider it when weighing the benefits and drawbacks of mandatory arbitration generally (see Practice Note, Employment Arbitration Agreements (US): Benefits and Drawbacks of Arbitration Versus Court).
For more on employment arbitration generally, see Employment Arbitration Toolkit (US).