Congress passed H.R. 4445 on February 7, 2022. The bill, titled “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” is important to long-term care facilities that enter into arbitration agreements with their residents.
The bill is broad, applying to any dispute filed under federal, tribal or state law relating to sexual abuse or harassment where the complainant is subject to a written arbitration clause. This means the bill is not limited to employment contracts but encompasses a variety of contracts, including long-term care facility arbitration agreements.
Given the broad application of the bill, which had not yet been signed by President Biden at publication, long-term care facilities that utilize arbitration agreements should consider whether carve outs for sexual abuse or harassment are warranted. Carve outs would prevent a situation where allegations of sexual abuse are made to void an otherwise enforceable arbitration agreement for claims that related to care and treatment.
Sexual assault, harassment targeted
The bill bans or makes voidable pre-dispute arbitration agreements, or clauses, and disallows joint, class or collective action waivers that preclude the filing of a lawsuit involving sexual assault or sexual harassment, at the election of the complainant, or in the case of long-term care facilities, the employee or resident. While the continued use of such clauses is neither unlawful nor precluded by the bill, such clauses are voidable, meaning a claimant may consent to the use of arbitration or seek to void the clause, but only after a legal dispute arises.
Arbitration clauses are commonly used by long-term care facilities. Arbitration is considered quicker, less expensive and provides greater flexibility of process and procedure. It also allows for disputes and claimants’ personal information to remain confidential rather than giving way to the public forum of the courts.
Concerns about ambiguity
The new bill has several ambiguities as written. It would apply retroactively, but no timelines are provided. There are no time restrictions on when a challenge to an arbitration clause may be initiated. Moreover, the word “dispute” is not defined within the bill. Therefore, it is not clear whether dispute is intended to mean a claim or merely an allegation. The bill also does not address other forms of alternative dispute resolution, such as the use of private trials or mediation, being part of a contractual agreement.
It defines sexual assault and sexual harassment as follows:
Sexual Assault is “a dispute involving a nonconsensual sexual act or sexual contact, as such terms are defined in section 2246 of title 18 or similar applicable Tribal or State law, including when the victim lacks capacity to consent.”
Sexual Harassment is defined as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal or State law.” Consequently, the boundaries and limits of both defined acts cover a wide range of laws, conduct and interpretation.
In the end, long-term care facilities that use arbitration agreements in their admissions paperwork will have to remain vigilant to protect their rights and weigh varying and new factors like the cost of having two proceedings and the risk of inconsistent outcomes of two proceedings. Even though the bill is limited to circumstances where a party attempts to enforce and compel arbitration against the complainant, many issues are raised by the bill that require planning and preparation with proper legal guidance.
Barb Killian is of counsel with Katz Korin Cunningham’s Health Care practice group. Prior to joining the firm, she served at the Indiana Department of Health as its first regulatory compliance and policy officer and as special counsel for emergency response.
The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.