The House passed the measure earlier this week. President Biden is expected to sign it. It prohibits employers from requiring employees to settle harassment or sexual assault cases by arbitration. This process often benefits employers and prevents misconduct allegations from being made public.
The bill is also retroactive. It nullifies the language in contracts across the country and opens the door to people who were bound by it to file legal action.
Senator Kirsten Gillibrand from New York, who spearheaded the effort, described it as "one of America's most significant workplace reforms".
Gillibrand stated that the arbitration process was secretive and biased, and denied people a fundamental constitutional right: a day in Court.
She stated that survivors of workplace sexual assault and harassment will no longer be able to come forward and receive a legal prohibition from suing their employer, as there was a forced arbitration clause in their employment contracts.
Gillibrand, who is focused on sexual harassment and misconduct in the military, first introduced the legislation with Senator Lindsey Graham (a Republican from South Carolina).
In a divided Congress, the legislation enjoyed unusually broad bipartisan support. The Senate passed the bill by unanimous consent, a process almost never used in significant legislation, particularly one that affects tens or millions of Americans. This week, the House approved the bill on a strong bipartisan basis with a vote of 335 to 97.
Gretchen Carlson (former Fox News anchor) testified in support for the legislation. Certain employee contracts included binding arbitration clauses.
Carlson was present with Gillibrand, other senators, and at a press conference following Senate passage. She said that she couldn't have imagined that her allegations, which she made five years ago, would lead to a law change that would be supported by both Democrats and Republicans.
"Marching on the streets can be inspiring. Our minds can be opened by editorials. Carlson stated that although hashtags can be a catalyst, legislation is what lasts.
A staggering 60 million Americans have clauses in their employment contracts that require them to settle sexual misconduct allegations in private arbitration proceedings rather than in court. This widespread practice, which is criticized in light of #MeToo, forces employees to seek recourse without recourse to a jury or the opportunity to appeal against a decision.
New York's Senate Majority Leader Chuck Schumer said, "If you could ever claim any legislation was long overdue. This is it." It was "almost medieval" in its ability to make victims of harassment or assault shut up and not tell anyone and not seek justice.
Critics claim that binding arbitration is secretive and protects both companies and perpetrators. It also allows corporations to avoid changing policies or removing serial abusers.
These clauses prohibit lawsuits not only apply to employment contracts, but also to other service agreements. This prevents anyone who was sexually assaulted in nursing homes or massage parlors to bring their claims to court.
The arbitration process is supported by business groups as it is faster and cheaper than lengthy courtroom proceedings.
Graham stated on the Senate floor, "It doesn't harm businesses to ensure that people harassed at work get treated fairly."
This is good news for businesses. He said that this was good news for America.
Gillibrand stated that many workers don't know they are bound by the forced arbitration rules. Employers can also benefit from the process, which typically results in smaller settlements.
The legislation's cosponsors were senators from ideologically polar opposites such as Cory Booker, New Jersey Democrat, and Josh Hawley, Missouri Republican. This is a clear sign of the power and support for #MeToo and broad support for the change.
Graham stated at the news conference that Washington can sometimes be "pretty screwed-up", but that the legislation shows "that there's still hope" if people listen to one another and work together to improve lives.
The White House issued a statement in support of the bill earlier this month.