New Federal Legislation Raises Multiple Questions Regarding Litigation of Sexual Abuse and Sexual Harassment Cases and Affects Recent State Legislation
| Publication year | 2022 |
| Author | Written by Hon. Allan J. Goodman (Ret.)* |
Written by Hon. Allan J. Goodman (Ret.)*
Federal law affecting predispute arbitration agreements in sexual assault and sexual harassment matters changed significantly in March of this year. This article discusses what those changes are or may be. It also addresses related California legislation.
Key provisions of the Federal Arbitration Act (FAA) are set out in chapter 1 of title 9 of the United States Code. Section 1 of this chapter contains definitions of terms, including of the term "commerce." Section 2, with exceptions not necessary for discussion here, has provided the federal statutory basis for arbitration of disputes: that the disputes involve contracts "evidencing a transaction in commerce" ... "save upon such grounds as exist at law or in equity for the revocation of any contract." At least, that was the reach of the FAA until section 2 was amended, effective March 3, 2022.
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (H.R. No. 4445, Pub.L. 117-90) (approved by the House of Representatives 335 to 97 and by voice vote in the Senate and enacted upon President Biden's signature on March 3, 2022) (the Act)), modified two sections of, and added a new chapter 4 to, title 9 of the United States Code. (Chapters 2 and 3 address procedures on enforcement of foreign conventions.)
The terms "predispute arbitration agreement," "predispute joint-action waiver," "sexual assault dispute," and "sexual harassment dispute" are defined in newly enacted chapter 4, section 401 of title 9. The term "sexual assault dispute" includes the breadth of offenses defined in section 2246 of title 18 of the United States Code, but also such "similar applicable [conduct defined in] Tribal or State laws...." The term "sexual harassment dispute" is defined as "a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law."
New section 402(a) of the same title and chapter provides that the person alleging conduct constituting either a "sexual assault dispute" or a "sexual harassment dispute," or the named class
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representative for a such matter, may elect to proceed in court and thereby avoid a pre-dispute contractual provision mandating arbitration. This section applies both to claims as defined, and also to cases that "relate to" the defined claims. Arguably the quoted phrase expands the reach of the new law to include claims related to the underlying defined conduct such as claims for intentional infliction of emotional distress and wrongful termination that may be consequences of the expressly defined conduct.
This new statutory right to avoid a contractual term which otherwise would mandate arbitration of the types of disputes which are subjects of the Act applies "with respect to a case which is filed under Federal, Tribal, or State law which relates to such a dispute." (Emphasis added.) (The impact of the just-quoted phrase is discussed below.) This right to elect to proceed in court rather than in arbitration applies "[n]otwithstanding any other provision of this title."
The Act also added as the concluding clause of section 2 of chapter 1 the following: "or as otherwise provided in chapter 4." With this amendment, section 2 now provides: "A written provision in any ... contract evidencing a transaction involving commerce to settle by arbitration a controversy...
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