On February 10, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act and sent the Act to President Biden for signature. President Biden is expected to sign the bill this week, which will become law immediately upon signature by the President.
This Act makes pre-dispute arbitration agreements relating to sexual assault or sexual harassment void. Similarly, any class or collective action waiver in pre-dispute arbitration agreements involving sexual assault or sexual harassment are void. This means that employees who allege sexual harassment in the workplace will be able to pursue their claims in court (after filing with the appropriate administrative agency, if necessary under state or federal law), regardless of whether they previously signed an arbitration agreement.
Some initial California observations and unsolicted legal commentary:
- The initial reading of the law is that it is retroactive in the sense that if an employee has a claim in the future, a previously-signed arbitration agreement would not be enforceable as to sexual harassment or assault complaints or claims. It is yet to be tested on existing claims and of course anticipated litgiation challengign the law may take years.
- An employee may still agree to arbitrate a dispute at the time the dispute arises, which may be worth exploring in some situations, especailly when an employer is sentive to costs and fees as arbitration is prohibitvely expensive for the employer in California.
- The law does not have any impact on other discrimination claims or other employment disputes, so arbitration agreements may still be advisable for some companies who can afford to arbitrate and pay their legal bills on time.
- Employers should review and revise any arbitration provisions in their employment-related agreements (wage & hour, nondisclosure, nonsolicit, noncompetition, employment agreements and any other agreements utilized by the company). If the arbitration clause attempts to mandate arbitration for sexual harassment and/or assult claims, a court could invalidate the entire clause and allow the entire claim into Court. Our firm can help with the drafting of appropriate employee handbooks and limited arbitration clauses.
- Employees should generally refuse to sign arbitration agreements as a condition of employment despite this carve out in the law. If allowed, have legal counsel review the agreement.
What Should Employers and Employees Do?
California-based employers and out-of-state-employers with employees in California should immediately review their policies, procedures, and practices to ensure compliance with the new laws and this new statute.
If you are an hourly worker and have any questions about whether you have been paid properly or paid all minimum wages or asked to work off the clock or whether you should have received a complaint paystub, or you believe you may have a claim against your employer for any violation of the California Labor Code, please feel free to call us at 949.458.9675 or email Rich Quintilone II Esq. at email@example.com if you have any questions. www.quintlaw.com