On February 10, 2022, the U.S. Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The Act will become federal law once President Biden signs it, which is expected to occur soon. Once signed, this law will invalidate any agreement that requires claims of sexual harassment or sexual assault to go to arbitration instead of going to court. The law also will invalidate agreements that prevent multiple workers joining together to file one lawsuit for sexual harassment or sexual assault, even agreements that were signed before the law goes into effect. Plus, if there is a dispute over whether a claim involves sexual harassment or not, a court and not an arbitrator will decide the issue.
Even though sexual harassment is considered a form of sexual discrimination, other types of discrimination are not affected by this upcoming law. Employers are still allowed to require their employees to decide claims involving other types of employment discrimination (national origin, race, religion, sexual orientation, disability, sex, marital status) in arbitration and outside of court.
Employers often prefer to have cases submitted to arbitration instead of to a court for many reasons. Arbitrations are private proceedings, and so everything that happens, and the ultimate decision, are normally not public record or easily found online. Arbitrations do not normally allow as much discovery to occur, meaning that an employee is usually at a disadvantage going into arbitration because of the burdens placed on each employee to prove his/her/their case. Since arbitrations also do not normally allow for an appeal process, the case becomes final much sooner than a case that goes through the court process. Ultimately, the arbitration process is supposed to be less expensive, which decreases the chances that an employer will make the decision to settle because it is cheaper than defending the case.
Practically speaking, the arbitration process usually favors employers in employment case. Most arbitration rules require that an employee pay a modest filing fee, and that the employer pay the balance of the fees to the arbitrator (which are in the thousands of dollars). Since most employees will only have at most one arbitration in their lifetime, with employers possibly having more arbitrations, the arbitrators themselves may feel some bias towards an employer. For instance, if an arbitrator makes a favorable ruling for an employer in one case, the employer is likely to want that arbitrator on future cases. Plus, the arbitrator knows that the employer is going to be paying the bills, and an employer who receives a favorable decision is more likely to use that arbitrator again in the future. The employee, on the other hand, will likely never see that arbitrator again. There is no jury to feel sympathetic for an employee, reducing the possibility that an employee would recover a large damage award in employment arbitrations, and decreasing the value of good cases. Plus, there is a very slim possibility of getting an arbitration award overturned.
At FairLaw Firm, we are familiar with arbitration clauses, sexual harassment cases, how to prosecute these cases for employees, and how to defend them for employers. Contact us to discuss how we can put our experience to work for you.