Can My Employer Force Me To Go To Arbitration For My Sexual Harassment Claim?

If you have ever experienced sexual harassment at work, it’s important to know you have rights when it comes to filing a legal claim against your employer and/or the harasser. In the wake of the #MeToo movement, there have been many positive changes to the law, especially for employees who have suffered sexual misconduct in their work environments.

One of those changes, outlined below, is the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” which greatly helps victims of sexual misconduct.

What Is Forced Arbitration?

Arbitration is one of various methods used to resolve legal disputes outside of the courtroom. Unfortunately, this process is usually not favorable for employees and requires the parties’ to agree to a “neutral” third party – known as an arbitrator – who will review the evidence and have sole discretion to decide the outcome of the case. This process is much less formal than a trial and is also a private process, which means your claims will be shielded from public view.

Almost all cases that end up in arbitration are due to an arbitration clause in a contract that was signed. For employees, this clause will often be contained in a job offer letter or in the company’s employee handbook – documents which employees are usually required to sign before they begin to work for their new employer. Typically, arbitration clauses in employment-related contracts are written in a manner so as to force an employee to arbitrate any future legal claims that may arise out of their employment. This usually includes any and all types of workplace discrimination, harassment and wrongful termination claims.

Arbitration is widely viewed as more favorable to employers for several reasons. First, a major benefit of arbitration for employers is that the entire arbitration process is secret and confidential. This means that when an employee alleges some type of misconduct that arose from their employment, the employer may resolve the case privately, ensuring the public never learns about it. As a result, employers are allowed to hide their patterns of misconduct and avoid the negative backlash that often occurs when news of wrongdoing becomes public.

A second (and major) benefit for employers is the fact that arbitration is a “for-profit justice system” that heavily favors large, corporate “repeat players” – i.e. your employer. Large employers can have dozens or even thousands of arbitrations over the course of many years and, since the employers pay for the costs and fees of arbitration, arbitration companies stand to lose hundreds of thousands, or even millions of dollars of future income if they do not keep the employers  (i.e. returning customers) “happy” with the results.

This is why numerous studies have confirmed that employees win less often and recover much less damages in arbitration rather than civil court.

Further, and yet another huge benefit for employers, is the fact that wronged employees who are subject to an arbitration agreement will find it very difficult to retain a qualified lawyer for their case. This is because all employee-side attorneys are well aware that arbitration is a very risky endeavor, and that even the strongest case is still likely to lose at the hands of an inherently corrupt arbitration system.

However, in the past year, recent legislation has been enacted to now prevent claims relating to sexual misconduct in the workplace from being forced into secret, binding arbitration.

Do I Have to Go to Arbitration for a Sexual Harassment Case?

California has recently passed many new laws, some of which apply to arbitration. On the Federal level, President Biden recently signed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” (“The Act”) which now prohibits forced arbitration of claims relating to sexual harassment and sexual assault. It is important to note The Act does not apply retroactively to past cases, but does apply to disputes or claims that occur after the Act was signed into law in March of 2022 (even if there is an existing arbitration agreement that was signed before the enactment of this law).

There is also another proposed California law enacted in 2020 (currently under court review) making it illegal for companies to force their employees to sign  mandatory arbitration clauses relating to violations of the Fair Employment and Housing Act (FEHA). However, the status of this law is uncertain as it is being challenged in federal court, and is under review by the Ninth Circuit.

It is important to note that just because an employee is no longer forced to file their claims relating to sexual misconduct in arbitration, this does not mean they are unable to pursue their claims in arbitration on their own accord. As long as the arbitration agreement (or clause) was signed voluntarily, an employee may still choose to arbitrate a sexual misconduct claim if they wish to do so privately due to the sensitive nature of the issue.

Consider The Following Situation:

Monique works as a physical therapist for a large physical therapy practice. Her direct supervisor has been making lewd comments and inappropriately touching various parts of Monique’s body on several occasions while she was working. Monique complains to the owner of the practice about the sexual misconduct she has experienced and is terminated the next day. Soon thereafter, Monique files a lawsuit against her former employer. In response, the employer produces a signed mandatory arbitration agreement in an effort to compel Monique’s claims to arbitration so the company can “save face.” However, as a result of the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” Monique’s case will remain in state court rather than being forced to go to arbitration since she is able to show that the harassment and termination occurred after March 2022 (when the bill was signed into law). 

If you have been subjected to sexual harassment, sexual assault, or another form of sexual misconduct at work, you may be able to file a claim against your employer. Give our law office a call at 949-771-8173  or fill out our online contact form to schedule a free consultation with an Orange County sexual harassment attorney.