How a New Federal Law Will Help Some Workers Pursuing Sexual Harassment Claims in New Jersey

New laws, including a federal bill signed into law this past March, have helped give workers harmed by sexual harassment and/or sexual assault more power over the resolution of those claims. Previously, many employers had successfully moved these cases from the courts to arbitration (via the enforcement of arbitration agreements that they had demanded of their employees at the start of those employees’ employment.) Now, the law places more workers in control of deciding whether their cases go forward in a courtroom or in an arbitration setting. As with any kind of decision about your sexual harassment case, a knowledgeable New Jersey sexual harassment lawyer can provide critical advice about which option makes the most sense for you.

A recent sexual harassment ruling from the Appellate Division court shows the impact of this new law (and others,) and represents a bit of good news for people who are now going to court to file their sexual harassment complaints.

P.R. and his employer signed an employment contract that said that all claims — including issues of discrimination, harassment, and/or retaliation — would be subject to arbitration. In June 2021, the employer fired P.R. Six months later, P.R. sued, alleging sexual assault, sexual harassment, and retaliation. The employer sought to enforce the arbitration clause and move the case to an arbitration setting.

On the surface, P.R. seemed to have some law in his favor. Section 12.7 of the New Jersey Law Against Discrimination says that any “provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.”

Despite the language of Section 12.7, P.R. lost. Why? The key was something called “federal preemption.” That concept, rooted in the Supremacy Clause of the U.S. Constitution, says that when federal and state law conflict, the state law is preempted and federal law governs.

In P.R.’s case, the federal law — the Federal Arbitration Act — said that agreements like the ones P.R. and his employer signed were valid and enforceable. Under the doctrine of preemption, the FAA trumped the LAD and the employer was entitled to demand arbitration.

So how is this outcome good news for other workers? The good news is that in March 2022 — three months after P.R. filed his sexual harassment lawsuit — President Biden signed into federal law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. That federal statute amended the FAA and says that employment agreements to arbitrate sexual assault or sexual harassment claims are invalid and unenforceable if the parties signed them before the sexual assault and/or sexual harassment in question occurred.

If P.R.’s claim had accrued after March 3, 2022, the new act amending the FAA would have controlled and would have made the arbitration provision in P.R.’s employment contract unenforceable. For all workplace sexual harassment victims whose claims accrued after March 3, the amendment does control and will work to invalidate arbitration agreements of this type.

New Law in the Wake of #MeToo: Giving Workers, Not Employers, Control

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act is considered one of the pieces of legislation triggered, at least in part, by the #MeToo movement. While arbitration generally offers greater privacy, some workers — especially recently — have come to prefer the opportunity to present their cases in a public setting in the hopes of exposing their employers’ bad acts and “outing” serial harassers that employers might otherwise try to hide. Additionally, many workers and their lawyers often will view a jury as more receptive to their positions and arguments than an arbitration panel.

One important thing to understand is what the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act and Section 12.7 of the LAD does not do. These newer laws do not demand that you litigate your sexual harassment case in court. If you have signed an arbitration agreement with your employer, these laws simply say that your employer cannot force you to arbitrate. Effectively, these laws allow you to be the one who decides whether your case will proceed in court or in an arbitration setting.

The law of sexual harassment — in particular, the law of sexual harassment in relation to mandatory arbitration of claims — is changing in the wake of the #MeToo movement. If you’ve been the victim of workplace sexual harassment and you’re someone who signed a mandatory arbitration clause, you may today have more options than ever before. The experienced New Jersey sexual harassment attorneys at Phillips & Associates are here to outline all of those options, and which one(s) make the most sense given your specific circumstances and preferences. To find out more, contact us online or at (866) 229-9441 to set up a free and confidential consultation today.

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