New Law Lets Sexual Harassment Claimants Get Out of Arbitration Agreements
A new federal law allows employees to avoid arbitration agreements with respect to sexual harassment or sexual assault claims. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 applies to pre-dispute arbitration agreements, such as those included in employment contracts or stand-alone arbitration agreements entered into at the time of hire. Many employers have adopted arbitration agreements because such agreements can contain enforceable waivers of the right to bring collective or class actions. They also avoid the risk of run-away jury verdicts.
The new law still allows the parties to agree to arbitrate a claim after it has arisen. The law applies to claims arising after its enactment.
According to press accounts, the impetus for the law was a meeting between former Fox News journalist Gretchen Carlson and Senator Lindsay Graham. Carlson was blocked by an arbitration agreement from suing Fox News for sexual harassment but found a way around it by suing former Fox New President Roger Ailes, resulting in a $20 million settlement.