Many employers require their employees to agree in advance to arbitrate all workplace disputes as a condition of employment or continued employment. As a result of this practice, serious workplace compliance violations may remain hidden from the public because they are adjudicated in a private arbitration forum selected unilaterally by the employer.
In the case of workplace sexual misconduct, mandatory arbitration has served to shield perpetrators, including repeat offenders, whose identities were often left undisclosed in the public record, even when employees prevailed by successfully proving the illegal behavior.
And because mandatory arbitration agreements routinely bar consolidation of actions brought by multiple claimants, employees who allege a pattern of workplace sexual misconduct, and who might otherwise have had the advantage of joining their related claims into a single lawsuit brought in court before one judge, typically do not have that option when arbitration is mandated. Arbitration also eliminates the option of a jury trial.
But effective March 3, 2022, a new federal law known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFASASHA) prohibits pre-dispute arbitration agreements for sexual harassment or sexual assault disputes. The law provides an exception only if the party alleging a claim of sexual harassment or sexual assault elects to have the pre-dispute arbitration agreement enforced. This flips the election to arbitrate such claims — now leaving it up to the employee to decide.
Because women are the vast majority of the victims, recognizing and remedying workplace sexual harassment has evolved into a basic women’s rights concern. Over the past generation, slow but important progress has been made at the federal level.
The Supreme Court first recognized in 1986 that an employer’s demand for sexual favors as a condition of employment was actionable under the civil rights laws. It took more than a decade after that for the Supreme Court to further recognize that a sexually hostile work environment fostered or permitted by the employer — not just overt sexual demands — could also be actionable.
On the legislative side, spurred into action by a string of sexual harassment settlements involving repeat, predatory harassers who had been protected for years at high-profile companies such as The Weinstein Company, Fox and NBC, Congress amended the federal tax code in 2018. The amendment disallowed the deductibility of the employer’s cost of sexual harassment settlements (including attorneys’ fees) if the payment is conditioned on nondisclosure.
Eliminating the employer’s ability to force sexual misconduct disputes to be brought in a confidential arbitration forum is a logical next step in this progression.
It remains to be seen whether this change will motivate employers to implement more robust anti-harassment compliance measures than they had in place before. At the very least, victims of workplace sexual harassment and sexual assault now have the power to choose how those claims will be handled. This board believes this law was overdue and will balance the interests of justice, providing to the individual the right to seek redress in the courts for these acts.
Editorial Advisory Board member Arthur F. Fergenson did not participate in this opinion.
EDITORIAL ADVISORY BOARD MEMBERS
James B. Astrachan, Chair
James K. Archibald
Gary E. Bair
Andre M. Davis
Arthur F. Fergenson
Julie C. Janofsky
Ericka N. King
Angela W. Russell
Debra G. Schubert
H. Mark Stichel
The Daily Record Editorial Advisory Board is composed of members of the legal profession who serve voluntarily and are independent of The Daily Record. Through their ongoing exchange of views, members of the board attempt to develop consensus on issues of importance to the bench, bar and public. When their minds meet, unsigned opinions will result. When they differ, or if a conflict exists, majority views and the names of members who do not participate will appear. Members of the community are invited to contribute letters to the editor and/or columns about opinions expressed by the Editorial Advisory Board.