Many employers have adopted arbitration agreements to limit costly employment litigation, potential runaway juries, and workplace disputes that become tried in the court of public opinion. But employers should reconsider their legal strategy in light of a recent amendment to the Federal Arbitration Act (FAA) resulting from the #MeToo movement, the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” This Act was passed by Congress and became effective on March 3, 2022, when it was signed by President Biden.
As employers who have adopted arbitration agreements are likely aware, many state legislatures have sought to limit the use of arbitration in workplace disputes, including Washington and California. Courts have sometimes found these state laws to be preempted by the FAA, so Congress’s passage of this amendment to the FAA could eliminate that potential roadblock.
