A bipartisan group of federal legislators introduced a new bill in Congress in early December that would prevent businesses from enforcing mandatory arbitration agreements in instances where employees allege workplace sexual harassment or gender bias. Proponents of the bill argue that mandatory arbitration clauses shield harassers and perpetuates the continuation of hostile work environments due to the private nature of arbitration. Employers often prefer arbitration not only because of the private nature of the resolution, but also because it is generally a quicker and less expensive process.

Named the “Ending Forced Arbitration of Sexual Harassment Act of 2017”, the new bill is believed to have a better chance of becoming law than past attempts to restrict arbitration agreements given the timing of the dozens of sexual harassment stories in the news. The legislation, which would amend the generally pro-arbitration Federal Arbitration Act, would make pre-dispute arbitration agreements unenforceable in any sex discrimination case dispute under Title VII or that could have been brought under Title VII. However, the legislation as currently drafted may apply to all sex discrimination disputes, which would include pay equity disputes, generic sex discrimination disputes, pregnancy discrimination and accommodation disputes and, in some places, disputes based on LGBT discrimination. It would leave other employment disputes still arbitration-eligible.

Employers often have new employees sign agreements to arbitrate any disputes that may arise during the course of the new employee’s relationship with the employer, and generally courts have enforced such agreements if they allow employees to exercise their legal rights and aren’t too one-sided in favor of the employer. The Ending Forced Arbitration of Sexual Harassment Act, which is currently in committee in Congress, would invalidate those agreements as they relate to sexual discrimination claims. If the legislation were to pass (it likely has a fairly long road ahead of it before it could be voted on by both houses of Congress), employers may have to alter the arbitration provisions contained in their employment contracts, depending on how broadly or narrowly the language of the bill is drafted. Martin Pringle’s employment attorneys will be tracking the bill as it works its way through the legislative process.