By Mark Carey
The U.S. Senate approved a bill from the House that ends forced arbitration in sexual assault and sexual harassment cases. The bill will be signed into law by President Biden. This is a gigantic win for employees, male and female, as sexual harassment affects everyone. The White House issued a statement in support on February 1, 2022:
“Under current law, many employment and other contracts require binding arbitration for a wide range of matters before a dispute arises, which denies survivors the ability to decide whether to pursue their claim with the procedural protections provided by courts, and silences victims of abuse by forcing them into a confidential dispute forum without the right to appeal. More than 60 million Americans are subject to mandatory arbitration clauses in the workplace, often without realizing it until they come forward to bring a claim against their employer. The Report of the Co-Chairs of the U.S. Equal Employment Opportunity Commission’s Select Task Force on the Study of Harassment in the Workplace notes that between 50-75 percent of women have faced some form of unwanted or unwelcome sexual harassment in the workplace. Additionally, contracts for services may include mandatory arbitration clauses in the fine print that shield companies and businesses from being held publicly accountable for the harm caused.”
“This bill is one of the most significant workplace reforms in American history and is a major step forward toward changing a system that uses secrecy to protect perpetrators and silence survivors,” said Sen. Kirsten Gillibrand, D-NY.
We have written about Forced Arbitration, also called Mandatory Arbitration, many times, HERE and HERE. The most serious concern with a forced arbitration proceeding is that it is conducted in private and deprives sexual harassment victims of their day in court and the right to receive a trial by jury.
Arbitration Proceedings Are Secret
Arbitration hearings lack utter transparency, accountability and employers are able to shield unlawful and unfair practices from the public view. Not only is that a problem as a matter of public policy, but practically it takes away the leverage an employee might have to get an employer to the settlement table for fear of making their grievances public. The employer has no obligation or incentive to be transparent and to make things right. The above Bill ends this default management practice once and for all for sexual assault and sexual harassment victims in the workplace.
Forced Arbitration Perpetuated Sexual Harassment in the Workplace
Forced arbitration facilitated the perpetration of sexual assault and sexual harassment discrimination in the workplace, by preventing victims from being heard in an open court and preventing their complaints and stories from being made public. In addition, because there is no “verdict” and the findings of forced arbitration are private and confidential, there is no ability for future plaintiffs and their attorneys to uncover company-wide data to expose patterns and prior practices of sexual harassment discrimination.
Employers “Were” the Winners in Forced Arbitration Cases- But That Has Ended
Employers were the clear winners in this unjust and unfair forced arbitration process. Up until now, forced arbitration resulted in favorable outcomes for employers in sexual harassment cases. In fact, research shows that arbitrators were more likely to find in favor of employers. Employees are 1.7 times more likely to win in federal courts than in arbitration proceedings and 2.6 times more likely to win in state courts than in arbitration proceedings. In addition, forced arbitration settlements yield significantly lower damages for employees than in federal and state courts. (Sources: bit.ly/EPIArbitrationStudy, bit.ly/CPDArbitrationStudy).
The forced arbitration nonsense has stopped, at least in part, for both male and female employees. However, the practice still continues to be followed in all other employment discrimination cases nationwide. For now, we should all relish in this sweet victory for employees. Our democracy does work, and this Bill is a prime example.