Forced Arbitration for Sexual Harassment or Assault Ends with New Legislation

Five years after being introduced by Senators Kirstin Gillibrand, D-N.Y. and Lindsey Graham, R-S.C., a bill banning clauses forcing arbitration for victims of sexual assault and harassment has passed both the U.S. House of Representatives and the Senate. Senator Gillibrand called it, “one of the most significant workplace reforms in history.” Once signed the law will retroactively invalidate any clause that is preventing victims in ongoing cases from taking their cases to court, and provide additional options for future victims.

Prior to the law’s passage, victims of workplace sexual assault or harassment whose employment contracts contained language requiring forced arbitration were limited in their ability to pursue justice. The issue gained national prominence after former Fox News anchor Gretchen Carlson sued Fox News chairman and CEO Roger Ailes. Though her attorneys found a workaround to the arbitration clause contained within her contract (and she eventually won $20 million in compensation), their strategy remains a mystery that Carlson cannot discuss, and few victims of harassment have the resources that she did.

Calling mandatory arbitration “a pervasive epidemic,” Carlson has spent the past several years working to end it in cases of sexual harassment and assault. Speaking of the legislation on its way to President Biden’s desk for signature she said, “Bad actors will know that women’s voices will be heard when they speak up about what’s really happening at work.”

Arbitration clauses are contained in an estimated 60 million Americans’ employment contracts. They take away the right to a jury trial, requiring instead that those in disputes with their employers agree that an arbitrator will resolve their situation. These clauses keeps employees from speaking publicly about both the problem and any solution or settlement that is reached. In the case of sexual harassment, this air of secrecy allows predators to go unpunished and to harass again.

Beyond taking harassers out of the public eye, Carlson says that forced arbitration keeps companies from improving their internal policies surrounding sexual assault and harassment. “The more that a person has the ability to make something transparent, I think, the greater the possibility that people stop doing it.” With reference to the new legislation, she expressed hope that it will “help companies get on the right side of history.”

In 2018, the U.S. Supreme Court ruled that it was legal for companies to require employees to sign arbitration clauses in their employment contracts. This made it impossible for workers to file either class action lawsuits or personal injury claims against them. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act passed with bipartisan support, eliminating the shields they afforded to perpetrators and providing individual employees with the choice of going to court or going to arbitration based on their own preference.

Senator Lindsey Graham expressed satisfaction with the bill’s passage, predicting that companies that have relied upon its protections in the past will now have to “up their game.”

If you have been the victim of sexual assault or harassment on the job, you are not alone. Our experienced sexual harassment attorneys can help you understand your rights and the options available to you. Contact us today for more information or to set up a time to discuss your situation.

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