On Feb. 10, 2022, the Senate passed HR 4445, which, upon President Joe Biden’s expected signature, will amend the Federal Arbitration Act to allow an individual who is alleging sexual harassment or a sexual assault to elect to bring their claims to court, notwithstanding an arbitration agreement to the contrary. The amendment will be effective immediately once signed.
What Is the Goal of This Amendment?
The idea behind the amendment is to ensure that companies are not hiding behind the confidentiality that arbitration provides. In other words, the amendment is designed to ensure that employers are not permitting harassment to occur behind closed doors and out of the public eye. Within the past few years, several instances involving high-profile individuals (think Harvey Weinstein, Steve Wynn, Matt Lauer) who were alleged to have harassed/assaulted women within their workplaces were brought to light, sparking confidential settlement agreements or arbitrations that were kept out of the public eye and were unbeknownst to others who had worked with the alleged harassers. Ideally, forcing these matters into courts with a public record should force companies to address the allegations head-on and prevent the behavior from occurring in the first place.
What Does This Change?
Well, a lot and nothing at the same time. The amendment still allows for arbitration to apply if the person alleging harassment or assault chooses to use arbitration rather than the courts; so in some instances, companies may still be using arbitration in sexual harassment and assault claims, but they will now lose the power to enforce those agreements against claimants who want their day in court.