Arbitration Agreements and Class Waivers in New York Employment

Employment arbitration agreements are generally enforced, and the Supreme Court has held that agreements requiring individualized proceedings in place of class or collective actions must be enforced.⁠^[8][2] The governing law is federal: under the Federal Arbitration Act (FAA), a written agreement to arbitrate in a contract involving commerce is "valid, irrevocable, and enforceable."⁠^[1] The principal exception is also federal and dates from 2022: a person alleging sexual harassment or sexual assault can choose to keep a case relating to that dispute in court despite a pre-dispute arbitration agreement.⁠^[3]

Arbitration is a private process in which a neutral arbitrator, rather than a judge or jury, decides the dispute. This page covers individual agreements signed by employees. Union contracts raise separate questions, covered in union members, grievances and discrimination claims.

Are employment arbitration agreements enforceable in New York?

Generally yes, and the reason is federal law. The FAA makes written arbitration agreements enforceable "save upon such grounds as exist at law or in equity for the revocation of any contract or as otherwise provided in chapter 4," the chapter added in 2022.⁠^[1] New York State's own guidance describes the practical result: for cases brought in state or federal court, mandatory arbitration clauses are generally enforced, requiring the parties to submit discrimination and other claims to arbitration rather than proceeding in court.⁠^[8]

The same guidance describes what arbitration means for review: the resulting decisions "are final and not subject to review by the courts except in extremely limited circumstances."⁠^[8] In a 2009 federal age discrimination case that arose under a union contract, the Supreme Court described an agreement to arbitrate as waiving only the right to seek relief from a court in the first instance, not the statutory right to be free from discrimination.⁠^[9]

Which claims can be sent to arbitration?

Type of claim	Can a pre-dispute arbitration agreement be enforced?
Discrimination, retaliation and other claims that do not relate to a sexual harassment or sexual assault dispute	Generally yes, under the FAA. New York State's guidance says the 2022 federal amendment applies to sexual harassment claims only, not other types of discrimination claims.⁠[1][8]
A case relating to a sexual harassment dispute	Not if the person alleging the conduct elects otherwise, for a dispute or claim that arose or accrued on or after March 3, 2022.⁠[3][4]
A case relating to a sexual assault dispute	Same federal rule as sexual harassment disputes.⁠[3][10]
Class or collective claims	A waiver of class and collective proceedings is enforceable under the FAA, except that a pre-dispute joint-action waiver is not enforceable for a sexual harassment or sexual assault dispute if the person elects.⁠[2][3]

Are class and collective action waivers enforceable?

Under federal law, yes. In Epic Systems Corp. v. Lewis, decided May 21, 2018, the Supreme Court held that arbitration agreements between employers and employees providing for individualized proceedings must be enforced under the FAA, and that neither the FAA's saving clause nor the National Labor Relations Act suggests otherwise.⁠^[2] A class waiver means each employee brings his or her own claim instead of joining a group case.

The 2022 federal Act carved out one category. It defines a "predispute joint-action waiver" as an agreement, whether or not part of an arbitration agreement, that would prohibit or waive a party's right to participate in a joint, class or collective action in a judicial, arbitral, administrative or other forum over a dispute that has not yet arisen.⁠^[11] For a sexual harassment or sexual assault dispute, such a waiver is not valid or enforceable at the election of the person alleging the conduct or the named representative of a class.⁠^[3]

What is the exception for sexual harassment and sexual assault?

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act was enacted on March 3, 2022, and added a new chapter to the FAA.⁠^[4][1] Its core rule: at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, no pre-dispute arbitration agreement or pre-dispute joint-action waiver is valid or enforceable for a case filed under federal, tribal or state law that relates to that dispute.⁠^[3] Four features matter most.

• It is the employee's choice. The rule operates "at the election of the person alleging" the conduct.⁠^[3]
• It covers only pre-dispute agreements. A "predispute arbitration agreement" is an agreement to arbitrate a dispute that had not yet arisen when the agreement was made.⁠^[11]
• State law counts. A "sexual harassment dispute" is a dispute relating to conduct alleged to constitute sexual harassment under applicable federal, tribal or state law.⁠^[10]
• A court decides. Whether the Act applies is determined by a court rather than an arbitrator, even if the agreement delegates such questions to the arbitrator.⁠^[12]

The Act turns on timing of the claim, not of the signature: it applies to any dispute or claim that arises or accrues on or after March 3, 2022.⁠^[4] In Olivieri v. Stifel, Nicolaus & Co. (2024), the Second Circuit held that "accrue" has its statute-of-limitations meaning, so a hostile work environment claim that began before that date but continued after it accrued after the Act took effect.⁠^[13] The companion guide, can I be forced into arbitration?, covers this exception in depth.

What happened to New York's ban, CPLR 7515?

It is still in the statute book, but the State itself describes it as largely preempted by the FAA.⁠^[6] Under New York State law, CPLR 7515 provides that, "except where inconsistent with federal law," no written contract entered into on or after its effective date may contain a clause requiring mandatory arbitration of a discrimination claim, and any such clause is null and void.⁠^[5] The section was added in 2018 for claims of sexual harassment and widened in 2019 to any allegation or claim of discrimination.⁠^[14]

The words "except where inconsistent with federal law" matter. New York State's own FAQ tells the public that the section is "largely overruled" by the FAA, and that court rulings have held its prohibition on mandatory arbitration of all discrimination claims preempted.⁠^[6] The FAQ does not name those rulings.

Two other parts of the section are worth knowing. It defines a "mandatory arbitration clause" as one that requires arbitration before any legal action and also makes the arbitrator's findings final and not subject to independent court review, and it does not stop an employer from including other arbitration provisions the parties agree upon.⁠^[15] A void clause does not impair the rest of the contract, and where a collective-bargaining agreement conflicts with the section, the agreement controls.⁠^[16]

What people get wrong: that New York law forbids forced arbitration of discrimination claims. The statute's own text yields to federal law, and the State describes it as largely preempted.⁠^[5][6] For sexual harassment and sexual assault disputes, the operative rule is the 2022 federal Act.⁠^[3]

Can I still go to a government agency?

Federal. In EEOC v. Waffle House, Inc. (2002), an employee had signed an agreement to arbitrate employment disputes and then filed a discrimination charge. The Supreme Court held that the agreement does not bar the EEOC from pursuing victim-specific judicial relief, such as back pay, reinstatement and damages, in its own enforcement action, because the EEOC is not a party to the contract and has not agreed to arbitrate.⁠^[7] The decision concerns a lawsuit brought by the EEOC itself; it does not say that filing a charge releases an employee's own lawsuit from arbitration.⁠^[7]

New York State. The State says the Division of Human Rights does not enforce mandatory arbitration clauses and intends to proceed with any discrimination claims filed with it. It adds that this issue has yet to be resolved by higher-level judicial review and that a judge in a particular case might order the Division to stop processing a claim.⁠^[8]

Choosing an agency has consequences of its own. Under New York State law and under New York City law, a person who has filed a complaint with the State Division or the City Commission generally cannot then sue in court on the same claim, with exceptions for certain agency dismissals that differ between the two statutes.⁠^[17][18] See election of remedies and choosing where to file.

What else is usually in these agreements?

An agreement with an arbitration clause can contain other terms, and each has its own rules.

• Shortened time limits. Under New York State law, a written, reasonable shortened limitations period is enforceable, and in March 2025 the Appellate Division, Second Department, enforced a six-month clause in a job application.⁠^[19] Under the New York City Human Rights Law, a clause that purports to shorten the time to bring claims under that law is unenforceable and void.⁠^[20] See agreements that shorten your time to sue.
• Confidentiality terms. These are covered in NDAs and confidentiality in settlements.
• Releases. A release signed at the end of a job is a different document from an arbitration agreement; see severance agreements and releases.

For employers and HR

The same sources apply from the other side of the table. A clause requiring individualized arbitration is enforceable under the FAA.⁠^[2] It cannot be enforced over the election of a person alleging a sexual harassment or sexual assault dispute that arose or accrued on or after March 3, 2022, and a court, not the arbitrator, decides whether that exception applies.⁠^[3][12][4] An arbitration clause does not prevent an EEOC enforcement action.⁠^[7]

Practical steps

Find every document you signed or clicked through: the offer letter, the application, onboarding forms, handbook acknowledgments and any later updates. Note the date of each. Read the clause for what it covers, whether it gives up group claims, whether it sets its own time limits, and whether it gave you a window to opt out. Then set the dates of the conduct you are concerned about beside March 3, 2022, since the federal exception depends on when the claim arose or accrued.⁠^[4] The decision checklist lists the other questions to settle before choosing a forum.