Tag: sexual harassment

New law ends forced arbitration of sexual harassment claims

By Anita Byer, Setnor Byer Insurance & Risk

A new federal law prohibits employers from forcing employees to arbitrate sexual harassment claims. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act invalidates pre-dispute agreements that force employees to resolve claims of sexual harassment through arbitration instead of litigation. Approximately 60 million American workers are bound by forced arbitration clauses in their employment agreements. However, as of March 3, 2022, those with claims of sexual harassment can have their day in court.

The Act, which passed with broad bipartisan support, amends the Federal Arbitration Act to make pre-dispute arbitration agreements for sexual harassment disputes invalid and unenforceable. A pre-dispute arbitration agreement is any agreement to arbitrate a dispute that had not yet arisen at the time the agreement was made. This definition is broad enough to include most employment agreements that require arbitration. A sexual harassment dispute is a dispute relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal or state law.

The Act also invalidates pre-dispute joint-action waivers. These are agreements that prohibit one party (the employee) from participating in a joint, class or collective action involving a dispute that has not yet arisen at the time the agreement is made. Employees are no longer bound by these pre-dispute joint-action waivers, regardless of whether the waiver is part of the pre-dispute arbitration agreement.

Disagreements regarding the Act’s applicability to a specific claim are resolved by a court, not an arbitrator. As a result, many employers will ultimately end up where they least wanted to be. However, it’s important to note that the Act applies to pre-dispute arbitration agreements. It does not prohibit the parties from mutually agreeing to arbitration after a claim has arisen. The Act also applies at the election of the person making the claim, so employees are free to proceed pursuant to their employer’s pre-dispute arbitration agreement if they wish.

Employers must understand that the Act applies to disputes or claims that arise or accrue on or after March 3, 2022. It applies to all pre-dispute arbitration agreements, even those that predate the new law. Given the popularity of pre-dispute arbitration agreements, many employers will need to review their employment contracts and consult with counsel to determine how the new law will affect them going forward. Employers also need employment practices liability insurance (EPLI) to protect against the uncertainty that accompanies the enactment of any new law.

Please contact us to learn more about protecting your business with Employment Practices Liability Insurance.

EEOC’s Enforcement and Litigation Capabilities Endure Despite COVID-19

The Equal Employment Opportunity Commission released its enforcement and litigation data for fiscal year 2020. COVID-19, it seems, did not impair the EEOC’s ability to enforce the nation’s equal employment opportunity laws. In 2020, the EEOC:

  • received 67,448 charges of workplace discrimination;
  • responded to more than 470,000 calls and more than 187,000 inquiries;
  • resolved 70,804 charges and 165 merit lawsuits;
  • secured $439.2 million for victims of discrimination;
  • recovered $106 million through litigation (the most in 16 years); and
  • was nearly perfect in court (95.8 percent success rate).

Retaliation remained the most frequently cited claim, accounting for more than half of all charges filed last year. Here is a breakdown of the charges received by the EEOC in 2020. Note that charges often allege more than one category of discrimination.

  • Retaliation: 37,632 (55.8 percent of all charges filed)
  • Disability: 24,324 (36.1 percent)
  • Race: 22,064 (32.7 percent)
  • Sex: 21,398 (31.7 percent)
  • Age: 14,183 (21.0 percent)
  • National Origin: 6,377 (9.5 percent)
  • Color: 3,562 (5.3 percent)
  • Religion: 2,404 (3.6 percent)
  • Equal Pay Act: 980 (1.5 percent)
  • Genetic Information: 440 (0.7 percent)

Employers must have a policy prohibiting discrimination and harassment in the workplace. Managers and employees must be trained to prevent and avoid unlawful behavior. Employers need Employment Practices Liability Insurance to cover the high cost of defending actual and alleged claims of unlawful conduct. Why? The EEOC is watching and offending employers are paying.

Please contact us if you would like to learn more about Employment Practices Liability Insurance.

Supreme Court Considering Whether Title VII Prohibits LGBT Harassment and Discrimination

Does Title VII of the Civil Rights Act prohibit discrimination on the basis of sexual orientation, transgender status or sex stereotyping? We don’t know…yet. Three cases currently pending before the United States Supreme Court should give us an answer. Two of these cases involve sexual orientation discrimination. The third involves discrimination based on transgender status.

The Supreme Court heard oral arguments in October 2019, but we don’t know exactly when the Court will issue its highly-anticipated rulings. In the meantime, here is a brief summary of where things currently stand.

  • Title VII prohibits discrimination “because of…sex,” but it does not expressly prohibit discrimination on the basis of sexual orientation or transgender status.
  • Federal appellate courts are split on whether “sex” under Title VII should be interpreted to include sexual orientation, sexual identity, transgender status or sex stereotyping.
  • The Equal Employment Opportunity Commission has taken the position that Title VII prohibits employment discrimination based on gender identity and sexual orientation. 
  • The Department of Justice has taken the position that Title VII does not prohibit discrimination because of sexual orientation.
  • Some states have enacted laws that expressly prohibit LGBT-related employment discrimination. Others have not.

Since the EEOC began tracking LGBT-related discrimination in 2013, there has been a steady increase in the number of charges filed by employees and the amount of monetary benefits recovered from employers. Depending on how the Supreme Court rules, these numbers may increase dramatically or disappear altogether.

Changing laws and uncertain legal obligations substantially increase the likelihood of claims involving unlawful harassment or discrimination. Employers should carry Employment Practices Liability Insurance to protect against any number of employment-related claims. Employers should also provide sexual harassment training to employees, particularly those in managerial and supervisory positions. Please contact us if you would like to learn more about employment practices liability insurance.