Why Was Forced Arbitration Made Illegal? - Barrett & Farahany

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Why Was Forced Arbitration Made Illegal?

Why Was Forced Arbitration Made Illegal?

forced arbitration

Forced Arbitration is No More

For over two years, the act known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFASASHA), has protected workers in the United States. It works as the name suggests; it makes it illegal for businesses in the U.S. to force their employees to enter arbitration in cases of sexual assault and sexual harassment.

This benefits and protects workers who have been abused in their workplace by their employers, managers, and supervisors, but not everyone knows about this law. Many may not know what forced arbitration is, how it works, and how it works to benefit their employer, not them. The arbitration and sexual harassment attorneys at Barrett & Farahany will explain everything you need to know.

What is Forced Arbitration?

Before March 2022, when the EFASASHA was signed into law, many employers were adding clauses for forced arbitration into their contracts. These binding clauses forced employees to promise that if they were to file lawsuits against their employers for specific reasons, they would settle it in arbitration, not court.

Arbitration is a form of alternative dispute resolution, where both parties present their side of the story and provide evidence to an arbitrator rather than a judge. The arbitrator makes the final decision.

When someone has to sign an agreement to arbitrate in their employment contract, it’s called forced arbitration. Forced arbitration is only illegal for cases of sexual assault and sexual harassment in the workplace.

The Issues With Illegal Arbitration

While there are reasons and situations where an employee may want to enter arbitration, in many cases, arbitration, when on an employer’s terms, will only benefit the employer. When employers are forced into arbitration, the employer commonly picks the arbitrator, the time, the place, and more. This can lead to several issues, including but not limited to:

  • Limited Legal Recourse: Arbitration offers limited legal action compared to court litigation. Before it was illegal, employees would have to sign away the right to court litigation.
  • Bias Arbitrators: Arbitration will favor employers when they’re picking arbitrators that they have ongoing relationships with. This can and has led to biased outcomes against the employee.
  • Confidentiality: While an employee may want privacy, forced arbitration takes away the choice. Employers do this so they can keep the public from hearing about issues in their company. This is especially important to their bottom line if they’re a publicly traded company.
  • Cost: Arbitration is usually cheaper overall, but it may not be for the employee who didn’t get the compensation they deserved, especially if their employment contract forces them to share in the arbitration fees.

Should You Consider Arbitration?

Utilizing arbitration is not a bad idea for the employee on its own. Arbitration on the employer’s terms is where the issues arise. When you and your employer can choose an arbitrator that you can trust to be unbiased and whose shared costs are affordable to you, arbitration can be better than court litigation.

When it comes to issues such as sexual assault and sexual harassment, the victim may want their privacy. Most arbitration agreements swear all parties to a non-confidentiality clause. But, if you don’t want to keep what happened to you a secret, you should have the freedom to avoid forced arbitration.

Contact Barrett & Farahany For Help With Your Sexual Harassment Case

Don’t let your employer try to back you into a corner and force you into arbitration or sign a forced arbitration clause. An employer may be preying on your ignorance if they do this. A sexual harassment attorney at Barrett & Farahany can help you.

Our attorneys have extensive experience with helping victims of sexual harassment and assault in the workplace. We can lead you through the litigation process, arbitration, or mediation if you and your employer would prefer it. Contact us today to schedule a consultation.

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