Update on March 3, 2022 at 4:40 pm PT: On Thursday, March 3, President Biden signed the Ending Forced Arbitration act into law. At the signing, the president called it a “momentous day for justice and fairness in the workplace.” The law will go into effect immediately.
On Feb. 10, 2022, Congress passed legislation to void forced arbitration agreements and collective action waiver clauses for sexual harassment and assault claims in any contract. The law, which is now heading to Biden’s desk for his signature, prohibits employers from requiring employees to sign away their rights to sue for sexual harassment and assault in the workplace. Advocates celebrated the legislation—a long-term priority since Alyssa Milano’s #MeToo tweet went viral in October of 2017.
“Since that start, we’ve seen the #MeToo movement expand, and with it, we’ve seen how pervasive and insidious forced arbitration clauses can be,” said Congresswoman Cheri Bustos (D-Ill.), lead sponsor of the legislation in the House. “Sexual harassment, quid-pro-quo arrangements for sexual favors, abuse and even rape within a company were all being hidden behind closed doors because of a simple legal technicality in the employment paperwork. My bill to void this legal language for sexual assault and harassment claims will let survivors’ voices be heard.”
“Studies estimate that almost a quarter to more than eighty percent of women experience sexual harassment in the workplace in their lifetimes,” said Representative Carolyn Maloney (D-N.Y.). “Yet many survivors are forced to enter into a private system of arbitration instead of resolving their claims in a court of law. Forced arbitration is a trap — one that many employees do not even know they have entered until after an incident occurs.”
Surprisingly, at a time when Republicans are opposing every piece of legislation that might expand or protect women’s rights, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 received bi-partisan support. The legislation passed the House by a vote of 335-97 and the Senate by a voice vote.
Former Fox News host Gretchen Carlson worked to win Republican support for the legislation. The 2019 film Bombshell portrayed Carlson’s story of sexual harassment and abuse at Fox News.
“Ending the use of forced arbitration for sexual harassment and assault will create safer work environments and protect millions of people,” said Gretchen Carlson, co-founder of Lift Our Voices. “Everyone deserves the right to be heard, to have choices and to be free from mechanisms that silence their voices.”
For years, employers have been able to preemptively silence workers through forced arbitration clauses in employment contracts, which today prevent more than 60 million workers from filing complaints in open court. In forced arbitration, a company may limit discovery of evidence, skew rules in their favor, block access to counsel, and bar similar claims. Employers choose the arbitrators who decide the cases and pay them. If they like the results, they hire them again.
“What we know about mandatory arbitration is that it favors employers,” said civil rights attorney Debra Katz. “All the research shows that employers get a better shake when they go to a confidential system of mandatory arbitration where there is no record and no public transparency.”
Brian Spitz—counsel for Lora Henry, a sexual assault survivor who testified before the House Judiciary Committee in favor of the legislation—explained why employers like mandatory arbitration. “Those who oppose letting women present their accounts of being sexually harassed to a jury in open court keep chanting their mantra that arbitration is easier, quicker, and cheaper. First off, jumping out of a twentieth-story window is a much easier and faster way to reach the ground, not to mention much less costly than running an elevator, but I’d still prefer the elevator,” said Spitz. “The truth is that employers are willing to pay $100,000 or more per case to arbitrate a case because it gives them two significant advantages: secrecy and a significantly higher win rate.”
In addition to voiding mandatory arbitration clauses, the new law also voids collective action waiver clauses that forfeit employees’ rights to join together in class-action lawsuits. These clauses, which employers require employees to agree to, effectively prevent them from proving the pervasive nature of the workplace harassment.
In a 2018 decision authored by Neil Gorsuch, the Supreme Court upheld mandatory arbitration and collective action waiver clauses as enforceable.
Sexual assault survivor Andowah Newton, who testified before the House Judiciary Committee on the bill, applauded the new legislation for “sending a powerful message that the type of sexual harassment, assault, and retaliation which my employer has inflicted upon me will no longer be buried and forced in secretive, biased, and unjust proceedings that penalize and disfavor survivors.”
Forced arbitration and collective action waiver clauses appear in the fine print of contracts not only for employment, but also for property leases, nursing homes, insurance, ride-share apps, movers, maintenance services and more, affecting tens of millions of Americans each year. These clauses silence survivors and grant impunity to perpetrators and the companies that harbor them and cover up their abuse.
“From employment paperwork and lease agreements to the terms and conditions for apps and services, the majority of Americans have unknowingly signed their rights away, and don’t realize it until they’re the one being silenced,” said Rep. Bustos.
The legislation not only frees survivors to file a claim in court, but also allows them to share their experiences with co-workers, discuss their cases publicly and warn job applicants and customers about companies that tolerate harassment and abuse of women.
“This bill will give thousands of survivors of sexual violence their voices back,” said Spottiswoode, a sexual assault survivor who testified for the bill before the House Judiciary Committee “They will not have to go through a secret process, designed by their employer, and keep their experiences secret forever. This is going to make such a real, meaningful difference in their lives.”