The bill, which was passed by a 335-97 vote in the House, reflects a rare bipartisan agreement in Congress stemming from the #MeToo movement, which prompted a national reckoning on the way sexual misconduct claims are handled in the United States.
"For far too long, Americans who have experienced sexual harassment or assault in the workplace have been forced into the shadows, compelled to sign secretive arbitration agreements that protect their employers from liability and frequently shield offenders from accountability," House Speaker Nancy Pelosi said in a statement following the vote on Monday. She stated that the bill sends "a clear signal to survivors across our country that they deserve the freedom to seek justice and make their voices heard."
The bill is expected to be voted on and approved by the Senate within the next two weeks, after which it will be sent to President Joe Biden for signature.
Democrat Kirsten Gillibrand, who pushed the bill and has been vocal in the Senate about ending sexual harassment and assault, said the legislation is long overdue, having been introduced in 2017.
According to Gillibrand, an estimated 60 million American workers have the clauses in their employment contracts, but the practice is not limited to employment contracts. Binding arbitration clauses can be tucked into agreements for other services, preventing residents and patients who claim to have been sexually assaulted from suing nursing homes and massage parlors.
"I think very few people realize they've agreed to this," the senator said in an interview on Tuesday. "It isn't something people read in their employment contracts." It's in the fine print, and even if it is there and they read it, they may not understand what it means."
In recent years, the widespread practice of including forced arbitration in employment contracts has come under fire for shielding companies and perpetrators by forcing employees to privately settle claims of sexual assault or harassment without a jury and the opportunity to appeal the decision.
Arbitration, according to business groups and other supporters, is a faster and less expensive way to resolve disputes.
Many workers, according to Gillibrand, are unaware of how binding arbitration can disproportionately benefit employers, with companies generally paying far lower sums to settle claims than they would in court and having far less incentive to take corrective actions, such as firing repeat offenders and changing policies.
The bill would prohibit the clauses from being included in future contracts and would also render those clauses invalid in any existing contracts, according to Gillibrand, which would allow people with lawyers to come forward and file claims.
Gretchen Carlson, a former Fox News anchor who accused now-deceased network CEO Roger Ailes of making unwanted advances and harming her career when she rejected him, testified in favor of the legislation. Binding arbitration was used in some network employee contracts.
Some companies, including Facebook, Uber, and Microsoft, have decided to discontinue the practice of forcing sexual misconduct claims to be arbitrated.