Forced Arbitration – The End is Near?

In March, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, amending the existing Federal Arbitration Act. The new law allows for those with sexual assault or sexual harassment claims to file a lawsuit in court, regardless of the existence of an arbitration agreement they signed that prohibits doing so. Parties still may enter arbitration agreements with respect to such claims after the claims are made.

Business Takeaway: Arbitration agreements have been under scrutiny for the past few years. Some states have contemplated banning mandatory employment arbitration altogether (e.g., California’s AB 51), which could have a national impact. Accordingly, it is not at all surprising to see federal efforts to narrow the scope of arbitration agreements, and we might expect more such restrictions in the future.