With this announcement, the companies are joining Microsoft and a number of large firms that finally recognize what civil rights lawyers have known for a long time: Mandatory arbitration has played a major role in enabling sexual harassment and silencing victims.
According to a 2017 study by the Economic Policy Institute, the percentage of employees subject to mandatory arbitration clauses increased seven-fold between 1995 and 2017, with 56 percent of non-union private-sector workers now covered by these so-called agreements. The EPI has extrapolated from this data that more than 60 million American workers are barred from ever taking employment claims to open court. Given that women are 47 percent of the workforce, that means close to 30 million women cannot go to court if faced with sexual harassment.
The confidential arbitration process is uniquely ill-suited to prevent and remedy sexual harassment, favoring employers and the harassers they protect. The proceedings prevent potential witnesses from learning of claims and coming forward to testify on behalf of victims or to join group actions. Discovery is limited, impeding an employee’s ability to collect evidence and prove her case. Arbitrators’ decisions are not reported and are nearly impossible to reverse.
Such secrecy enables predatory harassers, such as Roger Ailes, the late Fox News executive, to target women for decades without public exposure. It was only when Fox News’s Gretchen Carlson made a savvy litigation decision to file suit against Ailes in state court, circumventing Fox News’s mandatory clause, that the public became aware of his decades of sexual harassment. This led to Ailes’s ouster in July 2016 and Bill O’Reilly’s downfall nine months later. As we saw again with Harvey Weinstein, sexual harassers and assailants whose misconduct remains confidential are empowered to continue their predation with impunity.
Arbitration provides employers with the “repeat player” advantage, which research shows strongly favors parties who appear more often before arbitrators over one-time participants. This is because the corporations that select arbitrators are loath to hire those who rule in favor of employees and return again and again to arbitrators who do not.
Meanwhile, forced arbitration limits victims’ access to legal representation, as attorneys are less likely to accept cases before arbitrators than those tried in court, given the far lower success rate. The average positive outcome for arbitration plaintiffs is only 16 percent of that in federal courts and 7 percent of that in state courts. And the median awards in employment litigation are up to five times greater than median awards in employment arbitrations.
Taken together, these disadvantages have a predictable effect: Most victims for whom arbitration is the only recourse for harassment ultimately take no action at all. Despite the undeniable harassment epidemic exposed by the #MeToo movement, the American Arbitration Association received just 106 sexual harassment claims in 2016.
Fair and accessible procedures for enforcing discrimination laws are crucial for workplace equality, particularly when the vast majority of discrimination victims — as many as 75 percent, according to the Equal Employment Opportunity Commission — report suffering retaliation along with the initial abuse. Rather than facing odds heavily stacked against them, most women endure harassment for as long as they can, absorbing tremendous costs to their professional and personal well-being.
While several states have moved to bar mandatory arbitration for sexual harassment claims (Washington state is the only to have passed such a law), federal legislation such as the bipartisan Ending Forced Arbitration of Sexual Harassment Act is unlikely to pass in the current Congress. Employers must instead follow industry leaders and voluntarily end the use of one-sided agreements that serve little purpose other than muzzling victims and benefiting corporations. They should also renounce the use of these clauses more broadly for all employment claims, as they are fundamentally unfair to workers and undermine employee protections.
Of course, that also means scrutinizing companies that do take action. While Uber took a step in the right direction this week, it did so only for individuals. That means its employees are still subject to forced-arbitration provisions for class-action claims. The fact is, class actions are often the only way that most employees can wage legal battles against behemoths such as Uber.
Barring access to the public legal system only perpetuates inequality, especially for claims at the heart of equal protection. The days of using mandatory arbitration clauses to silence victims and protect harassers must come to an end.
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