In early March 2022, President Biden signed an anti-arbitration bill shaking up the human resources world. The “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” amends the Federal Arbitration Act, which generally favors arbitration in employment-related disputes. Please keep reading to learn more about President Biden’s new anti-arbitration bill and its implications for employers.

What is arbitration, and how does it work?

Before we discuss President Biden’s new anti-arbitration bill, it is helpful to understand what arbitration is and how it works. Arbitration is a method of resolving disputes outside of court. Both parties will discuss their disagreement with an arbitrator, who then reviews the evidence and decides on the outcome.

President Biden’s New Bill

With the signing of the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” President Biden is effectively ending forced arbitration for workers who are victims of sexual assault and harassment. Before this bill was signed into law, employers could force their workers to settle sexual misconduct claims through closed-door arbitration. Often, closed-door arbitration led to outcomes that favored perpetrators over victims. With the signing of this historic bill, employees still have the option to seek arbitration privately. Still, they can also sue perpetrators in court with their legal representation instead. 

Essential Elements of the Bill

Not only does this bill ban forced arbitration for workplace allegations, but there are several other additional factors included within it:

  • This bill renders existing agreements to arbitrate as null and void, meaning that ongoing cases can now be brought to court if the victim wants to go down that path.
  • The bill also states that agreements cannot ban class-action lawsuits when allegations arise. 
  • It is now up to the courts (not arbitrators) to decide whether the new law applies to a particular agreement.
  • Employers will be held accountable now as they cannot avoid bad press, which was traditionally the case with closed-door arbitration.

Currently, around 60 million workers in the United States are bound by forced arbitration clauses in their contracts. This new bill is a game-changer for workers’ rights and justice for assault victims. “Forced arbitration shielded perpetrators and silenced survivors, enabled employers to sweep episodes of sexual assault and harassment under the rug, and kept survivors from knowing if others have experienced the same thing,” said President Biden before signing the bill into law.

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