The bill, which was passed by the Senate with rare bipartisan support, invalidates any clause in Americans' employment contracts that prevents victims of sexual assault or harassment from suing their aggressor or the company in court.
President Joe Biden will now have to sign the bill into law.
According to the bill's authors, approximately 60 million Americans are currently bound by this clause, which requires employees to file sexual misconduct complaints through arbitration rather than court, sometimes without their knowledge.
According to victims' advocates, the process undermines accountability and prevents such allegations from becoming public.
"Survivors of sexual assault or harassment in the workplace will no longer come forward and be told that they are legally prohibited from suing their employer because somewhere buried in their employment contracts was this forced arbitration clause," said Democratic Senator Kirsten Gillibrand, a bill co-sponsor.
Gillibrand and Republican Senator Lindsey Graham introduced the bill in 2017 during the #MeToo movement, which highlighted the prevalence of sexual assault against women.
"So, the day of being quiet and doing it where nobody understands what happened, and the lady next door doesn't know that the same guy who's doing it to her also did it to the lady down the hall," Graham, a South Carolina senator, said. "Those were the days."
The bill, which was passed by the House earlier this week, was approved by the Senate on Thursday in an extremely rare bipartisan vote in a deeply divided Congress.
Opponents of the bill claimed that it could be abused by employees who filed complaints unrelated to sexual assault.
Republican Senator Joni Ernst disagreed, claiming that "the bill is narrow" and that it was past time for survivors' voices to be heard.
In recent years, sexual misconduct scandals have rocked American corporations, particularly in Silicon Valley.
Thousands of Google employees from Singapore to California staged a global walkout in November 2018 to protest the company's handling of sexual harassment allegations.
Late last year, the governor of California, where many of the tech behemoths are headquartered, enacted similar legislation that would prohibit employers from enforcing non-disclosure agreements in sexual harassment cases.