On March 3, 2022, President Biden signed a bill into law that prohibits the enforcement of contract provisions mandating third-party arbitration of workplace sexual harassment or assault claims and allows victims to have their “day in court.” The new law is known as the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (“The Act”) and amends Title 9 of the United States Code with respect to arbitration of disputes involving sexual assault and sexual harassment. The law has been referred to as the #MeToolaw because the #MeToo movement, which gained widespread attention in 2017, exposed the prevalence of employment contracts that included arbitration agreements mandating workplace sexual harassment and assault claims be resolved through arbitration and kept out of court.

Arbitration is a private, out-of-court means of alternative dispute resolution that gained popularity in the employment law sector in the late 1990s/early 2000s. There is no jury or ability to appeal. Some employers prefer arbitration over trial as a more streamlined and less public means to resolve employment disputes, and require their employees to sign arbitration agreements as a result. The new law guarantees victims of workplace sexual harassment or assault the ability to pursue a lawsuit in court as opposed to confining them to the limitations of arbitration.

The Act will apply with respect to any dispute or claim that arises or accrues on or after the date of enactment. It also is retroactive, in that it nullifies any current mandatory arbitration agreements, giving victims the ability to pursue a lawsuit in court for any disputes that arise on or after March 3, 2022 – the date of the law’s enactment. Notably, the Act does not ban arbitration outright for sexual harassment or assault allegations and allows employees to still opt for arbitration if that is their preference. The text of the Act may be accessed, here.

In light of this new, significant law, employers should review their employment contracts and agreements for any language mandating arbitration of workplace sexual harassment or assault claims and revise these agreements accordingly.