The new law received extensive bipartisan support. On Feb. 7, 2022, the Act was passed in the House by a 335-97 vote and just three days later, was passed in the Senate by voice vote. The Act is applicable to predispute arbitration agreements mandating arbitration of future claims and joint-action/class action waivers for sexual assault and sexual harassment disputes. Under the Act, a “sexual assault dispute” is defined as a dispute involving a nonconsensual act or sexual contact, including when the victim lacks capacity to consent. 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. Under the Act, no mandatory arbitration agreement or joint-action/class action waiver relating to sexual assault and/or sexual harassment claims is valid or enforceable absent consent from the complainant making such allegations and/or the named representative of the class action. Now, America’s approximately 60 million workers who are subject to arbitration clauses may go to court rather than mandatory arbitration.
The Act does not apply retroactively and is only applicable to a dispute or claim arising after the Act’s enactment date. Even if employers have an existing arbitration agreement which predates the enactment of the new law, it would not be enforceable against claims arising after the Act’s enactment date. Therefore, employers will need to review their mandatory arbitration agreements and class action waivers and include carve outs for any provisions regarding sexual assault and/or sexual harassment claims.