Plaintiffs Alleging Sexual Harassment or Assault Disputes may “Opt-Out” of Mandatory Arbitration
The Federal Arbitration Act (FAA) was recently amended to permit plaintiffs alleging sexual harassment or sexual assault disputes to opt-out of predispute arbitration agreements. The amendment applies to cases arising under federal and state law whether filed in federal or state court.
The harassment and assault disputes covered the amendment are broadly defined. Sexual harassment disputes are defined to include claims “relating to” any of the following: unwelcome sexual advances; unwanted physical contact that is sexual in nature, including assault; unwanted sexual attention, including unwanted sexual comments and propositions for sexual activity; conditioning professional, educational, consumer, health care or long-term care benefits on sexual activity; or, retaliation for rejecting unwanted sexual attention. Sexual assault disputes are defined to include disputes involving a nonconsensual sexual act or sexual contact, as such terms are defined in 18 USC 2246 or similar applicable tribal or state law, including when the victim lacks capacity to consent.
The amendment’s substantive provisions state that, notwithstanding anything else in the FAA, at the election of a person alleging conduct constituting a sexual harassment or sexual assault dispute, a predispute arbitration agreement is invalid and unenforceable under federal, tribal, or state law. The same right to opt-out may be exercised by a class representative in a class action. The amendment goes on to provide that its applicability must be decided by a judge, not an arbitrator, and according to federal law. Not specifically addressed, and not entirely clear, is what happens to unrelated claims alleged in a complaint that also alleges a sexual harassment or sexual assault dispute? Do such claims move forward in arbitration? And, if they do, what are the preclusive effects, if any, of an arbitration award handed down while a civil action concerning a sexual harassment or sexual assault dispute is pending? Unfortunately, these and other questions may only be resolved through litigation.