On Thursday, the Senate passed a bill banning mandatory arbitration for harassment and sexual assault claims.
The bill is called the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” and the House of Representatives passed it in a 335-97 vote on Monday. On Thursday, the Senate approved it with a voice vote and it will head to President Joe Biden’s desk for signature.
The Washington Post reported that the bill “would nullify agreements between employees and their employers in which the employees waive their rights to sue in the case of sexual assault or harassment. Instead, those agreements require the employees to settle their disputes with an arbitrator.”
It was created as a reaction to the #MeToo movement which brought to light the sexual harassment claims of high profile individuals and everyday citizens.
Senator Kirsten Gillibrand (D-NY) first introduced the bill in 2017 along with Senator Lindsey Graham (R-SC).
On Thursday, Gillibrand said, “This bill represents one of the most significant workplace reforms in American history,” adding, “It will help us fix a broken system that protects perpetrators and corporations and end the days of silencing survivors. … The arbitration process not only allows the corporations to hide sexual harassment and assault cases in this secretive and often biased process, but it shields those who committed serious misconduct from the public eye.”
Majority Leader Chuck Schumer (D-NY) also discussed the legislation on Thursday, saying, “All of us have heard the searing testimonies of those who have faced harassment or abuse at work, only to discover their jobs offered precious little in accountability.”
Schumer noted, “We can’t ignore a basic reality of these clauses: They deprive victims of sexual harassment and assault of their basic rights by mandating they seek remedy only behind closed doors of private arbitration with no other alternative. This is wrong. It is unfair. And it’s about time it changed.”
“It not only affects the future, but affects those who signed in the past,” Schumer noted, as the legislation would serve to void such agreements even if parties have already signed them.
The specific clauses that the bill addresses are mandatory arbitration and are typically included in the small print of various agreements ranging from employment to credit cards or ride-shares, per The Wall Street Journal.
Organizations that support the clauses say that the course of arbitration is more efficient, but others say that the clauses aid organizations in avoiding being held responsible in public.
The Journal also noted that the U.S. Chamber of Commerce has raised issues with the bill, writing in a letter to legislators last year that the bill was too widespread and argued that arbitration “provides a fair, effective, and less expensive means of resolving disputes compared to going to court.”
Senator John Cornyn (R-TX) said legislators need to ensure that arbitration deals are fair, but he said it could be the first action in an attempt to get rid of all contractual arbitration, which he said “would be a huge disservice.”
“I think it should be renamed the trial lawyers bonanza bill,” said Cornyn. “Having access to a jury trial, a court of law, isn’t necessarily the only way or even the most efficient or cost effective way of resolving disputes.”
Senator Graham discussed the bill prior to the vote and addressed criticism that it would be harmful to businesses.
“It does not hurt business to make sure that people who are harassed in the workplace get treated fairly,” Graham said. “It’s better for business. So I just want to say, this just shows that we can function up here, that we’re listening to the world as it is.”
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