What Does the New #MeToo Inspired Law Mean for Business?

A rare bipartisan effort has brought us a new federal law that was enacted in response to the #MeToo movement. This new law will prohibit companies from forcing employees to use arbitration, rather than the courts, to resolve cases involving sexual harassment or sexual assault in the workplace.

Why do we need this new law? Many people have complained that forced arbitration tends to unfairly favor businesses and keep these types of claims out of the public eye. Businesses generally favor arbitration over jury trials for a number of reasons, including the cost, length of time to resolve claims, and less emotion influencing the result.

As of the effective date of this law, companies will be unable to enforce written arbitration agreements that require employees or former employees to resolve claims of workplace sexual harassment or sexual assault through the arbitration process. This will make these types of claims much more attractive to the plaintiff’s lawyers because the monetary value of these cases, especially egregious ones, will increase substantially.

Pro Tip: Now is a good time for businesses to review their policies and procedures that prohibit harassment in the workplace. And when is the last time that you have done any harassment prevention training? It is not enough to talk to employees and managers about harassment at orientation and never bring it up again. Rather, your business should be taking regular affirmative steps to prevent workplace harassment.