In the wake of the #MeToo and #TimesUp movements, as well as high profile allegations of sexual harassment in the workplace, a number of states – including New York – have passed new laws banning the mandatory arbitration of sexual harassment claims. While the stated purpose of these States’ recent anti-sexual harassment laws is noble, there is serious doubt as to whether their anti-arbitration provisions will have lasting effect. This is because there is a strong argument – especially in light of controlling Supreme Court of the United States (the “Supreme Court”) decisions – that the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), preempts these state anti-arbitration provisions, rendering them largely unenforceable.
Writing for the majority in the Supreme Court’s recent decision in Epic Systems Corp. v. Lewis, 584 U.S. __, No. 16-285 (May 21, 2018), 138 S.Ct. 1612 (2018), Justice Neil Gorsuch reviewed the FAA’s legislative history, which he explained justifies both a broad and liberal application of the FAA, and deference to parties’ arbitration agreements thereunder. Thereafter, Justice Gorsuch rhetorically asked: “You might wonder if the balance Congress struck in 1925 between arbitration and litigation should be revisited in light of more contemporary developments. You might even ask if the Act was good policy when enacted. But all the same you might find it difficult to see how to avoid the statute’s application.” Id. at 1621-22.