Contractual arbitration has become increasingly popular for employers over the years, and so it is important for victims of sexual harassment to check to see if they are bound to arbitration, or whether they can instead file a lawsuit in Superior Court. It is important to determine if a victim is bound to arbitration before time and resources are spent pursuing a civil lawsuit.
In March 2022, Congress enacted a law that precludes employers from requiring employees to arbitrate disputes related to sexual assault or harassment. The new act, formally known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFASASHA), went into effect immediately.
Contractual arbitration occurs when two parties agree that if they have a dispute in the future, they will resolve the dispute through arbitration instead of through the court system. An arbitration is a hearing in which the parties bring their dispute to an unbiased and neutral third person, who acts as a judge and makes a ruling. Both parties have an opportunity to be heard at the arbitration. In a contractual arbitration, the parties generally have agreed in advance to be bound by the award that the arbitrator issues after the hearing.
Many employers require new employees to sign arbitration agreements upon being hired. If an employee signed an employment agreement with an arbitration clause, then the employee may be forced to go to contractual arbitration instead of filing a lawsuit. However, there are rules which must be followed in order for an employee to be bound to arbitration, and an attorney can assess an employee’s rights after reviewing the arbitration clause.