Does an arbitration clause in your employment contract block a harassment claim?
Usually not anymore. Since March 2022, federal law lets employees set aside a sexual harassment arbitration agreement and file in court instead, and that choice belongs to the employee. What matters is when the harassment happened, not when you signed. An employment lawyer can confirm whether your situation falls inside that window.
Most people find the clause after the fact. It surfaces during a search of an old onboarding folder, buried in a document signed on a first day alongside tax forms and a laptop policy, and it says any employment dispute goes to private arbitration.
For years, that clause did what it was designed to do. It moved harassment claims out of public courtrooms and into closed proceedings chosen and often paid for by the employer. Congress changed that in 2022, and a meaningful number of New York employees are still operating under the old assumption.
Key Takeaways About Arbitration and Harassment Claims
- Federal law allows employees to void a predispute arbitration clause for sexual harassment and sexual assault claims, at their own election.
- The trigger is when the dispute arose or the claim accrued, not the date the agreement was signed. An agreement from 2016 does not control harassment from 2024.
- A court, not an arbitrator, decides whether the law applies, even if the contract says otherwise.
- The same law voids class and collective action waivers for these claims.
- Employers frequently continue to invoke arbitration clauses that no longer hold up, and employees who do not know the law simply comply.
Key Dates That Decide Whether Arbitration Applies
- March 3, 2022. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act became law as Public Law 117-90. It applies to any dispute or claim that arises or accrues on or after that date.
- December 7, 2022. The Speak Out Act made predispute nondisclosure and nondisparagement clauses unenforceable in sexual harassment and sexual assault disputes.
- November 17, 2023. Amendments to New York General Obligations Law § 5-336 reshaped what a settlement agreement involving harassment claims may require of the person bringing them.
What Does the Federal Arbitration Law Actually Say?
It gives the employee a choice. At the election of the person alleging conduct constituting a sexual harassment or sexual assault dispute, a predispute arbitration agreement or joint-action waiver is not valid or enforceable with respect to a case filed under federal, tribal, or state law relating to that dispute.
Three words in that sentence carry most of the weight.
"At the election of"
The clause is not automatically void. It is voidable, and only you can void it. Some employees prefer arbitration for its speed or privacy, and the law preserves that option. What it removes is the employer's ability to force the choice.
"Predispute"
The protection covers agreements signed before the dispute existed, which describes nearly every onboarding arbitration clause. An agreement to arbitrate that you enter into after a dispute has already arisen, with counsel and with real negotiating room, is treated differently.
"A court, rather than an arbitrator"
Many arbitration agreements contain a delegation clause saying the arbitrator decides questions about the agreement's own validity. The statute overrides that. Whether the law applies is decided by a judge, regardless of what the contract says.
Does It Matter When You Signed?
No. This is the point most employees get backwards, and it is the reason people who could file in court do not.
The statute applies to any dispute or claim that arises or accrues on or after March 3, 2022. The agreement's signing date is irrelevant. A clause signed in 2014 has no force over harassment that occurred in 2025.
In 2024, the Second Circuit held that where harassment continues as an ongoing course of conduct rather than a single incident, the claim can accrue after March 3, 2022, even though some of the conduct began earlier.
For New York employees whose situation spanned the enactment date, that reading matters a great deal. What ended the harassment is often more important to this analysis than what started it.
Does the Entire Case Leave Arbitration, or Only the Harassment Claims?
This is genuinely unsettled, and any lawyer who tells you otherwise is overstating it.
Federal judges in New York have split. Some have held that once the law applies, the whole lawsuit stays in court, including claims for discrimination, retaliation, and unpaid wages brought alongside the harassment claim. Others have severed the harassment claims and sent the rest to arbitration.
In February 2026, a federal appeals court became the first to hold that the statute keeps a plaintiff's entire case out of arbitration. That decision is persuasive in New York rather than binding, and the Second Circuit has not yet resolved the question for this circuit.
The practical consequence: how your claims are pleaded, and how tightly the non-harassment claims are tied to the harassment, can determine whether your case stays together. That is a drafting decision made at the outset, not a problem fixed later.
Does the Law Cover Retaliation for Reporting Harassment?
In most decisions so far, yes. Courts have generally treated retaliation against someone who reported sexual harassment as part of the same dispute, on the reasoning that the retaliation relates to conduct alleged to constitute harassment.
The Second Circuit has not settled this either, and results have varied where a claim has little factual connection to the harassment itself. If your termination followed a complaint, that link is worth establishing carefully rather than assuming.
What About New York's Own Arbitration Ban?
New York passed CPLR § 7515 in 2018 to prohibit mandatory arbitration of discrimination claims. It contains its own limitation: it applies "except where inconsistent with federal law."
Federal courts have repeatedly found the state law preempted by the Federal Arbitration Act for agreements the FAA covers, which is most of them. The state provision remains on the books, but the federal statute is what does the real work today. Relying on the state law alone is a mistake employees make with some regularity.
Common Problems People Run Into
The employer invokes the clause anyway
Companies still send letters demanding arbitration on claims the federal statute plainly reaches. Some do it knowing the argument is weak. An employee without counsel typically reads the letter, believes it, and stops.
The claim is described as something other than harassment
Recharacterizing a matter as a general discrimination or performance dispute is a common defense move, because it argues the statute does not apply. How the underlying conduct is described in the pleading matters.
The deadline runs while the forum is being argued
Fighting about arbitration does not pause your filing deadlines. Harassment claims in New York carry several overlapping clocks, and our post on the deadlines that apply to your claim lays them out.
The NDA in a severance agreement
The Speak Out Act reaches nondisclosure and nondisparagement clauses agreed to before a dispute arose. It does not reach a confidentiality provision negotiated in a settlement afterward. New York law adds its own conditions to those settlements, including a revocation period and limits on penalties for speaking, but the two rules operate in different places, and conflating them costs people leverage.
What Changes If Your Case Stays in Court
Court means a public docket, broader discovery, a jury, and a right of appeal. Arbitration means a private decision-maker, limited discovery, and almost no appellate review.
For an employee, the discovery difference is often decisive. Comparator data, prior complaints against the same individual, and internal investigation files are harder to obtain in arbitration. Those materials also change how seriously an employer approaches settlement.
Choosing court is not automatically right for everyone. Some clients place a high value on privacy, and arbitration can deliver it. The point is that the decision now belongs to you.
When Should You Talk to a Lawyer?
Before you sign anything, and before you respond to a demand for arbitration. Those two moments are where the forum gets locked in.
Other reasons to call: you were told an arbitration clause bars your claim, you were handed a severance agreement with a confidentiality provision and a short deadline, the conduct spanned early 2022, or you were pushed out after complaining.
If you are still employed and still deciding what to do, our guide to the steps to take if you're being harassed at work is a reasonable place to start.
What People Find Helpful to Pull Together
Many clients find it useful to locate, from personal email and personal devices:
- The signed arbitration agreement, along with the offer letter and handbook acknowledgment it came with
- Any electronic onboarding record showing what you actually clicked and when
- A dated timeline of the conduct, including anything that continued after March 2022
- Your complaint to HR and any company response
- Any severance or settlement paperwork you have been shown
The onboarding record matters more than people expect. Employers sometimes cannot produce proof that a specific employee ever agreed to the clause they are trying to enforce.
Arbitration and Harassment Questions Answered by Attorneys
My employer already started an arbitration. Is it too late to move to court?
Not necessarily. The election is yours to make, and the question of whether the federal statute applies is one for a judge. Timing and how you have responded so far can matter, so this is worth raising quickly rather than waiting to see how the arbitration develops.
Does this law apply to independent contractors and partners?
The statute focuses on the nature of the dispute rather than on a job title, so it can reach people who are not classified as employees. Whether your underlying harassment claim itself covers you is a separate question, and New York City law reaches a broader range of working relationships than federal law does.
What if my agreement was with a staffing agency and not the company where I worked?
You may have claims against more than one entity, and the arbitration clause may bind you to only one of them. Staffing, secondment, and joint employer arrangements are common in finance, healthcare, and hospitality, and the agreement's exact wording about affiliates decides much of this.
Can I still get a confidential resolution if my case is in court?
Yes. Most matters resolve by agreement before trial, and those agreements are routinely confidential within the limits New York law places on harassment settlements. Taking a case out of arbitration does not commit you to a public trial.
Will I have to face the person who harassed me?
Not in the way most people picture. Early stages are almost entirely written and handled through counsel. A deposition may involve being in the same room, though the format can often be adjusted, including by video. This concern is common enough that it is worth raising at the first meeting so the approach accounts for it.
The Clause You Signed Is Probably Not the Last Word
Most people who call us about this assume the answer is no, and they call anyway because something about it did not feel right. That instinct is usually correct.
Reading an arbitration agreement against the current federal statute takes one conversation, not a retainer. Mizrahi Kroub LLP represents employees only, and an NYC sexual harassment lawyer can review your arbitration agreement and tell you plainly whether the clause still binds you. Most of our matters resolve before litigation, you will have a dedicated client relations contact, and consultations are free.
Call +1 (212) 970-8437 or visit 225 Broadway, 39th Floor, New York, NY 10007.
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