On October 1, 2018, a new Maryland Law titled “Disclosing Sexual Harassment In The Workplace Act of 2018” (the “Act”) goes into effect. The Act will immediately prohibit employment agreements containing any waiver of a “substantive or procedural” “right or remedy” relating to claims of sexual harassment or retaliation for complaining of sexual harassment. As a practical matter, this will seem to apply most often in the context of arbitration agreements – but the Act also applies to any agreements requiring that your employees mediate sexual harassment and related retaliation claims.
Employers who have arbitration agreements will now need to revise their arbitration agreements (and not enforce any existing arbitration agreements) that would have otherwise covered sexual harassment and related retaliation claims. If you have an arbitration policy in your employee handbook, your employee handbook may need to be revised. The revisions need not be extensive and the costs associated with the revisions should be minimal. The inconvenience of requiring all employees to execute a revised arbitration agreement might be substantial.
The Act also prohibits employers from taking any adverse actions against an employee who fails or refuses to enter into an agreement – including an arbitration agreement – that would include coverage of sexual harassment and related retaliation claims. As a practical matter, if an employer attempts to compel arbitration of a sexual harassment or related retaliation claim, the employer will be liable for the employee's attorneys' fees and costs in connection with defending the employee from any such enforcement.
Additionally, large employers (those who employ 50 or more employees) shall be required on July 1, 2020 (and again on or before July 1, 2022), to submit a survey to the Maryland Commission on Civil Rights, relating to the number of settlements relating to sexual harassment. This section of the Act will “sunset” (expire) at the end of June 30, 2023 unless the law is otherwise extended.
In summary, if you are an employer you must:
- Not enforce any employment arbitration agreement as to any sexual harassment or related retaliation claim; and
- Revise any existing arbitration agreements or policies to exclude arbitration of sexual harassment or related claims; and
- Advise your managers and other personnel to refrain from disciplining any employees who refuse to sign an arbitration agreement that is overly broad (applies to sexual harassment claims and related claims).
Please contact us with any questions.