Federal legislation forbidding mandatory arbitration in sexual harassment and assault cases will lead to higher legal costs and possibly higher employment practices liability rates, experts say.
H.R. 4445, the Ending Forced Arbitrations Sexual Assault and Sexual Harassment Act of 2021, passed Congress on bipartisan votes last month and is expected to be signed by President Joe Biden.
The measure would amend the Federal Arbitration Act and may create the complication of two-track litigation, where sexual assault and harassment charges are heard by a court and other charges in the same case are arbitrated.
While most employers do not require arbitration, those that do have such policies should review and revise them, experts say.
The measure forbids pre-dispute arbitration agreements in sexual harassment and assault cases and leaves it up to a judge to determine if it is applicable.
The original bill, which experts say resulted from the #MeToo movement, was more broadly worded to include other areas of employment litigation but was amended to gain bipartisan support.
The White House has said it would like to expand the mandatory arbitration ban beyond sexual assault and harassment claims, but such a move likely would not gain bipartisan support, observers say. ...
The court’s 2018 ruling in Epic Systems Corp. v. Lewis, for instance, reaffirmed that the Federal Arbitration Act requires courts to enforce agreements to arbitrate according to their terms.
“There will be an uptick in the sexual harassment types of cases that will be filed, because plaintiff attorneys will know they will be able to succeed in having those litigated in court,” and before a jury, said Emily T. Patajo, a member of Epstein Becker & Green P.C. in Los Angeles.