Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

Fox News Case to Test New Arbitration Law’s Retroactive Reach

April 14, 2022, 5:22 PM

A high-profile sexual harassment suit against Fox News executives from former host Andrea Tantaros that’s wielding a law banning forced arbitration in some cases signals that courts will have to grapple with retroactivity under the new protections.

The law, which took effect in March, carves out sexual harassment and assault from arbitration, addressing a contention—sparked by the #MeToo movement—that such clauses silence victims making allegations and allow harassment to persist. Businesses use arbitration agreements to quickly resolve claims instead of going to court.

The Tantaros case raises the question of whether that federal law should inform ongoing cases—and whether it should apply retroactively. It’s part of the argument that public policy doesn’t support such arbitration agreements, which Tantaros’ attorneys say silence her and are unfair to workers trying to address ongoing harassment.

“She wants these claims in open court, and they want it behind closed doors. That’s precisely why this legislation was passed,” said Cara Greene, a partner with Outten & Golden LLP, who represents Tantaros.

Greene said the case highlights the importance of the public policy embodied in the new federal law, and it’s clear that it applies in Tantaros’ case.

“It’s not about who is right and who is wrong. It’s about whether Fox News can keep it from the public,” she said. “It’s not just about sexual harassment then, it’s about the ongoing retaliation that she continues to experience.”

Other High-Profile Cases

Lawyers have used the law to argue that arbitration shouldn’t apply to sex harassment and assault claims, specifically, and that these claims should be heard in court, according to a Bloomberg Law review of court dockets.

Former NFL coach Brian Flores pointed to the law in his race discrimination claims against the league and other teams. The law also is being used in cases against Gucci America Inc. and Massage Envy Franchising, Inc.

The Tantaros case, however, appears to be the first to specifically ask a court to consider the law in federal court. She accuses the late Roger Ailes, as the network’s former CEO, and three other executives of creating a hostile work environment and retaliating against her when she complained.

Fox’s attorney, Paul Evans, with Baker & McKenzie LLP, told the U.S. District Court for the Southern District of New York that the new arbitration carveout has no bearing on the case. Tantaros’ claim, he said, “obviously arose and accrued years ago.” She last appeared on Fox News in April 2016. The network and attorney declined to comment further and pointed to the document filed in court.

Ambiguous Language?

In the wake of the law’s passage, questions are arising about whether it covers existing arbitration agreements, as well as ongoing disputes and claims made before its March 2022 enactment. The law says it “invalidates pre-dispute arbitration agreements that preclude a party from filing a lawsuit in court relating to a sexual assault or sexual harassment.”

But another section of the law’s text says it applies to “any dispute or claim that arises or accrues on or after the date of enactment.” Some attorneys and academics say this is clearly meant to limit the law’s reach, precluding cases that make claims prior to its passage.

The Tantaros lawsuit points to comments made by Vice President Kamala Harris, who said that “it will apply retroactively … invalidating every one of these agreements, no matter when they were entered into.” Attorneys say, though, it’s still unclear if ongoing disputes or claims before the act’s passage would be retroactively covered, or whether the law doesn’t explicitly confer that power and, therefore, isn’t enforceable.

Evans said Harris’ comments were “misleading,” and she was wrong about a “long-existing public policy against forced arbitration of claims relating to sexual harassment.”

Several states have passed laws to limit the reach of arbitration pacts. However, the Federal Arbitration Act largely preempted them. One California law that would prevent companies from forming forced arbitration agreements with workers is being challenged before the full U.S. Court of Appeals for the Ninth Circuit, after an appeals court panel upheld it.

Ongoing Harassment

The new law will have a “significant prospective rather than retroactive reach,” said Jay Inman, a Littler Mendelson shareholder, who represents employers. He said Congress would have expressly given the carveout retroactive power if that was the intent.

“We don’t yet know exactly how courts will interpret the ‘arises or accrues’ phrasing, but in general, I believe it means that analysis needs to look at when any distinct harm occurred,” he said. “What I really think is that it will be prospective only, and agreements that were in place will still be able to be enforced. There will be arguments about sexual harassment or assault actually occurred. Otherwise, just in general, the prior agreements should be enforceable.”

The big question is what should happen in cases where there is continued harassment, said Sarah Rudolph Cole, law professor at The Ohio State University, who specializes in alternative dispute resolution. She said an argument could be made that those cases would go to court rather than arbitration.

She said that public policy arguments are possible, as well, to convince a court that arbitration is harmful.

“You have plain language, and I would struggle to see that public policy could trump that,” she said. “If you start thinking about it, the whole notion that sexual harassment and assault are somehow worse than racial harassment, one could make that argument that the agreements are unconscionable.”

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com, Melissa B. Robinson at mrobinson@bloomberglaw.com