For years, it has been the policy of most, if not all, larger employers in Chester County to have new hires agree that if they ever bring a legal claim of sexual harassment against the company, the matter must go to arbitration instead of trial. This is seen as advantageous for employers because it keeps the matter out of the public record.
That policy came to an end in March when President Joe Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act into law. The law prohibits employment contracts from containing a clause requiring arbitration for these types of employment discrimination claims. Instead, employees now have the option to choose to pursue a lawsuit in court.
The law is retroactive, which means that it applies to all current employees, not just future hires. An estimated 60 million American workers who have been bound by an arbitration clause in their employment contract will now have options, at least when it comes to sexual harassment and sexual assault incidents.
The bill passed both the House and Senate easily, showing broad support for this change in federal employment law. At the same time, it took several years to become law, having first been introduced in the Senate back in 2017.
Possible implications for future harassment claims
Whether you are an employer or employee, this new law could have a major impact on you if you ever get involved in a sexual harassment dispute. The possibility of trial will certainly affect settlement negotiations in such cases. The prospect of an expensive and highly public court case could cause more employers to favor a settlement.