The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 can have far-reaching implications for actual property employers that, like in lots of different industries, have relied on necessary predispute arbitration agreements to resolve sexual harassment claims introduced by workers. The Act limits the usage of predispute arbitration agreements and sophistication motion waivers masking sexual assault and sexual harassment claims.
Many business and residential actual property corporations require property consumers to signal arbitration agreements. Arbitration typically is used as a substitute for litigation and is meant to be extra inexpensive and quicker than litigation. Relatively than a choose and jury deciding a case, an arbitrator that the events choose makes the choice. This can be preferable as a result of the events can choose an arbitrator with a background in actual property transactions, fairly than having a randomly chosen determination maker. If the arbitration is binding, which most are, there are usually no appeals by utilizing this course of, so it has better finality than litigation.
The Act supplies that an worker alleging sexual assault or sexual harassment towards their employer could unilaterally invalidate a predispute arbitration settlement or class-action waiver. This implies workers could select to arbitrate these claims or pursue them in courtroom — individually or as class members or representatives — no matter any contractual agreements with their employer.
The Act applies prospectively, which implies it applies solely to sexual assault and sexual harassment claims that come up or accrue after it was signed into regulation, March 3, 2022, whatever the date of the arbitration settlement at situation.
The Act shouldn’t have an effect on any settlement to arbitrate a dispute that had not but arisen on the time of the making of the settlement.
The Act doesn’t have an effect on in any other case legitimate arbitration agreements for claims apart from for sexual assault or sexual harassment.
Sensible Impression for Actual Property Employers
As an preliminary matter, employers might want to assess whether or not to proceed utilizing necessary predispute arbitration agreements with workers, understanding that sexual assault and sexual harassment claims have to be excluded from necessary arbitration. Employers additionally might want to fastidiously contemplate litigation technique and whether or not to hunt to implement present arbitration agreements. If an employer needs to proceed utilizing arbitration agreements, some steps needs to be taken.
Assessment the prevailing arbitration settlement to find out whether or not it needs to be revised. Listed below are a couple of concerns for actual property employers:
- Does the arbitration settlement have a severability provision?
- Think about including an exclusion clause explicitly excluding claims for sexual assault and sexual harassment from the settlement.
- In states the place it’s nonetheless permissible, contemplate together with a jury trial waiver within the arbitration settlement for non-arbitrable claims.
- Add language particularly requiring arbitration of claims which can be arbitrable the place included with non-arbitrable claims.
The Future for Actual Property Employers
Primarily based on the language of the Act, there will definitely be litigation over judicial interpretation. President Joe Biden’s Assertion of Administrative Coverage additionally foreshadowed attainable extra restrictions on the usage of necessary arbitration agreements. He said that his administration appears to be like ahead to working with Congress on broader laws on different pressured arbitration issues involving race discrimination, wage theft, and unfair labor practices.