Chances are that if you have bought a car, signed a credit card agreement, or purchased an iPad or iPhone, you have agreed to arbitrate all disputes that you have regarding those transactions. Mandatory arbitration clauses seem to be everywhere.
Arbitration agreements are not limited to purchases. For years, many employers have required their employees, as a condition of employment, to agree to the arbitration of employment-related disputes. Many people do not fully understand what arbitration is. Without an understanding, they cannot fully comprehend the rights they are relinquishing when signing an agreement that contains an arbitration clause.
Recent bipartisan legislation will end the use of forced arbitration in sexual harassment claims.
Arbitration Limits Employee Rights
An arbitration clause in employment agreements does not expand an employee’s rights; it limits them. An estimated 60 million American workers are subject to employment arbitration agreements. Employees don’t choose to arbitrate; arbitration is a condition imposed by the employer.
Mandatory arbitration clauses force employees to waive their right to a trial by a jury of their peers.
Arbitration Allows Secrecy for Companies
Mandatory arbitration clauses in employment contracts are favored by many employers. Arbitration agreements are drafted by the employer for the benefit of the employer.
Under arbitration, employment disputes are conducted in a private forum, not in a court. Many employers rely on mandatory arbitration agreements to keep employment disputes out of court and to keep the details of employment-related disputes confidential. Claims filed in court are publicly disclosed.
The privacy of the arbitration process fails to provide public exposure to discriminatory practices. Moreover, mandatory arbitration sweeps up important statutory rights that have taken years to develop.
Legislation Ends Forced Arbitration
There is a long legislative history behind Congress’s enactment of Title VII of the Civil Rights Act of 1964 and other anti-discrimination statutes. On Feb. 10, 2022, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act”). The legislation was first introduced in the Senate in 2017, by Senator Kristen Gillibrand and Senator Lindsay Graham following Gretchen Carlson’s 2016 sexual harassment case against Fox News.
The Act amends the Federal Arbitration Act (“FAA”) by making pre-dispute arbitration agreements between employers and employees unenforceable for claims of sexual assault or sexual harassment. The Act applies retroactively, invalidating existing arbitration agreements that force the parties to arbitrate claims of sexual harassment and/or sexual assault.
Under the Act, a “sexual harassment dispute” is defined as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.” However, the Act allows an employee to voluntarily choose to arbitrate his/her sexual harassment/assault claim to ensure that otherwise embarrassing and/or sensitive information remains private.
Existing employment agreements with arbitration provisions will still be fully enforceable for claims other than sexual harassment and sexual assault.
Legal Counsel to Fight Workplace Sexual Harassment
The takeaway is that, with the passage of the Act, employers can no longer mandate arbitration for employees’ claims of sexual assault or sexual harassment. Employees now have the power to choose arbitration or to take their claim to court.
Our attorneys at the Law Firm of Morgan Rooks, P.C. have tremendous experience in handling a wide range of employment law cases:
- Sexual Harassment
- Retaliation & Wrongful Termination
- Overtime & Wage Disputes
- Severance Agreements
- Whistleblower False Claims Act
- OSHA Violations
If you have been sexually harassed in the workplace, please contact the Law Firm of Morgan Rooks, P.C. We offer a free initial case evaluation. To schedule your consultation, call (856) 746-6332 or complete our convenient online form.