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NY employers will want to note this arbitration-pact legislation

On Behalf of | Jul 23, 2021 | Business Law

New York business owners necessarily maintain a constant and broad-based focus on problematic – both potential and actual – labor-tied challenges arising in their enterprises.

And for good reason. Problems on the employment front occasionally surface in every company. When they do arise, it is essential that they are addressed as efficiently and cost-effectively as possible.

Many business principals anticipate and prepare for occasional fallout through the execution of select agreements with their employees. One such commonly crafted contract is an arbitration agreement.

An arbitration pact can confer distinct advantages on an employer. The process is often much cheaper than formal litigation in court. Importantly, too, it can be optimal for ensuring a high level of privacy.

New York employers need to take note, though. A broadly bipartisan bill is currently moving through Congress that seeks to materially alter the applicability of the existing Federal Arbitration Act.

The so-called Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 aims to bar recourse to arbitration of any workplace sex discrimination complaint brought under protective federal laws (Title VII of the seminal Civil Rights Act). Bill language would prohibit arbitration of any dispute not yet existing when a worker inked an arbitration agreement with an employer.

That is unquestionably a powerful change, and legislation drafters/sponsors say that it is broadly endorsed by wide-ranging advocacy and business groups.

It is of course presently uncertain how the bill will precisely play out. An in-depth commentary on it notes, though, that employers can prepare for any outcome by taking proactive steps now to mitigate future problems. Those centrally include things like revamped company policies and training programs.