The Ending Forced Arbitration of Sexual Assault and Sexual Harassment (“EFA”) Act was signed into law by President Biden on March 3, 2022. In the first part of the two-part series, Employer Agreements Can No Longer Require the Arbitration of Sexual Harassment or Sexual Assault Claims, we examined how the EFA Act amends the Federal Arbitration Act. This blog examines how the new federal law prevents employers from requiring that employees arbitrate sexual assault or sexual harassment disputes against employers that arise on or after March 3, 2022.
Do employers have to revise their arbitration agreements?
Employers should first examine the arbitration agreements currently in place to determine whether a revision is necessary since employees can no longer be required to arbitrate sexual harassment and sexual abuse claims. A court may be more likely to enforce an arbitration agreement if it contains a catch-all clause, such as “employment law claims must be arbitrated to the extent allowed by federal and state law.” The EFA Act makes it clear that there is no required arbitration of sexual harassment or sexual abuse claims under federal law.
However, if an employer’s current arbitration agreement contains no such catch-all clause, the employer may wish to revise its form of agreement. A revised employer arbitration agreement should include language that carves out an exception to the requirement that all employment law claims must be arbitrated. In addition, that language should specify that sexual abuse and sexual harassment employment disputes are not required to be arbitrated under the agreement.
Is there anything employers can do to dissuade employees from choosing to litigate sexual harassment or sexual abuse claims?
The EFA Act does not prevent employers from offering the choice to arbitrate a sexual abuse or sexual harassment claim. However, the option must be entirely the employee’s decision. Accordingly, employers may want to include incentives in their employment arbitration agreements that are attractive to employees with sexual harassment or sexual abuse claims. For example, the employer may offer to pay all arbitrator fees and costs of the arbitration. The employer may also want to pay for pre-arbitration mediation of employees’ claims which may be attractive to some employees who wish to avoid the possible unpleasant experience of a formal hearing.
TAKEAWAY: Employers should review their arbitration agreements to ensure compliance with the new law against requiring arbitration of employee sexual harassment or sexual abuse claims and determine whether to include incentives to encourage employees to choose arbitration of those claims. If you need help reviewing an employment arbitration agreement or regarding any other federal or New Jersey employment law, contact Stephanie Gironda or any member of the Wilentz Employment Law Team.
The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services. Although we attempt to ensure that the postings are complete, accurate, and current as of the time of publication, we assume no responsibility for their completeness, accuracy, or timeliness. The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel.
This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk. We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability. Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein. We will remove a link to any site from this blog upon request of the linked entity.
We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.
If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com. One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.