Facebook Ends Forced Arbitration For Sexual Misconduct Claims |WORK|
"We are currently undertaking a careful review of our policies related to sexual harassment claims and private arbitration," a Slack spokesperson said in an email. "We take this issue very seriously, and Slack is committed to creating an environment where our employees can thrive."
Facebook ends forced arbitration for sexual misconduct claims
The move at Facebook, first reported by The Wall Street Journal, means that employees no longer have to submit to private arbitration, which kept misconduct allegations secret and sometimes allowed abusers to continue their behavior. Employees can now press their claims in court instead. Other tech companies such as Microsoft and Uber have previously dropped mandatory arbitration.
Over the last few years, many companies have dropped forced arbitration in limited circumstances. Facebook, Google, Lyft, Microsoft, Uber, and Wells Fargo have all yielded to pressure to drop forced arbitration for sexual harassment claims.4
Corporations that thought forced arbitration was an effective way to eliminate claims have not appreciated consumers and employees turning the tables against them, putting corporations in the ironic position of trying to undermine the very system they themselves set up. Amazon, American Express, Anderson Financial, AT&T, Bechtel, Chime, Green Dot, and Zenimax Media all faced more than 10, and sometimes over 100, claims in a single day in an apparent sign of group actions.
After being burned by forced arbitration, DoorDash took the latter option, dropping AAA and working with a new arbitration provider to create a whole new set of hoops for its contractors to jump through. Its new arbitration agreement directs claimants to the International Institute for Conflict Prevention and Resolution (CPR), which allows only 10 arbitration claims at once when more than 30 are filed, and mandates 90-day mediation sessions that would have the effect of delaying claims for years.14
Employment activists have railed against mandatory arbitration for decades, to little avail. But the #MeToo movement put a spotlight on the downsides of mandatory arbitration of sexual harassment and assault claims, and technology companies have begun responding.
On Tuesday, November 13, 2018, Wigdor LLP Partner Jeanne M. Christensen was interviewed by Bloomberg TV host Emily Chang about recent decisions made by companies such as Google, Facebook and Airbnb to end the use of mandatory arbitration in connection with claims of sexual harassment and sexual assault. Watch the full interview below.
In the weeks following the Google worker strike, several large tech companies dropped the practice of forced arbitration for sexual harassment as well including Facebook, Lyft, Square, Airbnb, eBay, and Uber. (Tech companies compete heavily for talent, which may be why the trend developed so quickly in that industry.2) On September 9, 2019 the Force the Issue project launched with the goal of leveraging that momentum in favor of getting other industries to drop the harmful practice. Over the next two years, Force the Issue successfully got over 350 big companies in an array of industries to state on the record that they had either dropped or never used the practice.
Getting rid of forced arbitration for sexual harassment was the right thing to do. The practice protected serial harassers and made workplaces less safe. Research shows that arbitration favors employers, most likely because they benefit from maintaining close, ongoing relationships with the arbitrators who decide the cases.3 It was clear: workers should be free to take their cases to court.
It's highly likely that the end of forced arbitration for sexual harassment claims will also help to advance race, gender, and class equity. Research has found women of color are more likely to experience workplace sexual harassment, due in part to a perception on the part of harassers that they have relatively little workplace power.4 Another recent study found that women, African American workers, and low wage workers were more likely to be subject to the coercive contracts that required forced arbitration for sexual harassment.5
Since traditionally marginalized groups are disproportionately impacted both by sexual harassment and forced arbitration, it's not difficult to imagine that ending this practice, even in a limited way, could help to level the playing field. How much less harassment would women of color endure if they were more widely perceived as being powerful at work? How much time, income, and health would women gain if it was easier to expose and eject serial harassers?
It's important to note, however, that there is still work to be done on the issue of forced arbitration. At a national level, companies are still able to use this harmful practice with respect to a wide variety of discrimination claims including ableism, racism, and ageism. In 2021 California passed the Silenced No More Act, an expansion of its forced arbitration ban that prevents California-based companies from using this practice for most discrimination claims, not just sexual harassment. We maintain that a similar expansion of anti-forced arbitration law needs to happen at a federal level.
The Force the Issue project launched September 9, 2019 as a joint project between LedBetter Gender Equality Index, Grab Your Wallet Alliance, and Robasciotti & Philipson. The goal was to get companies as many companies as possible to end the harmful practice of requiring arbitration for sexual harassment claims.
In the spring of 2022, following long standing efforts by a wide array of worker, consumer, investor, and policy groups and activists, the U.S. Congress passed The Ending Forced Arbitration Act with bipartisan support, effectively ending the practice of forced arbitration for sexual harassment at large U.S. corporations.
Before publishing a company profile page, we reached out to that company to ask if it requires arbitration for sexual harassment claims. In our queries, we asked companies to let us know whether they outright require arbitration for sexual harassment claims, require it by default with an opt-out provision or simply didn't require it at all.
We let these companies know that a lack of response would be interpreted as an indication the organization likely does require arbitration for sexual harassment claims. (Statistically, most private-sector employers with 50 or more employees do.9) Such companies were listed in the database as "Probably requires arbitration for sexual harassment."
When a company indicated to us that some or all of its employees are required to use arbitration for sexual harassment claims, its status in this database was listed as "requires arbitration for sexual harassment."
Many of the companies we contacted are active in multiple countries, so we did not limit the scope of our inquiries to just U.S. employees. If a company requires arbitration for sexual harassment claims in any nation, it is listed as "requires arbitration for sexual harassment." We did limit the scope of our inquiries to a company's employees. In other words, a company's relationship to contractors is not captured here.
Most of us are aware that the #MeToo movement was the spark that lit the fire, serving as the collective moment victims needed to break this conversation wide open. As such, whistles blew loudly, and organizations woke up to how deeply flawed and unfair this legislation truly was. While some companies including Facebook, Google, Lyft, Microsoft, Uber and Wells Fargo have dropped forced arbitration for sexual harassment claims, many have yet to heed the warning.
Both bills have largely been spearheaded by Gretchen Carlson, the former Fox News anchor whose high-profile sexual harassment lawsuit against then-Fox News Chairman and CEO Roger Ailes was the subject of the 2019 film Bombshell. She later co-founded a non-profit organization, Lift Our Voices, with the goal of eradicating forced arbitration in the workplace.
Shareholder pressure has also played a role. In February 2020, Wells Fargo voluntarily ended mandatory arbitration for sexual harassment claims after investors raised the issue. No other major bank has followed suit so far.
SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo & Company (NYSE: WFC) today announced that, effective immediately, the company will no longer require arbitration for employees in connection with any future sexual harassment claims.
Wells Fargo made the decision following internal dialogue and feedback from various stakeholders, including the proponents of a shareholder proposal. Clean Yield Asset Management submitted a shareholder proposal late last year that focused on mandatory arbitration of workplace sexual harassment claims. Clean Yield has since withdrawn the proposal.
On February 10, 2022, the U.S. Senate passed by voice vote H.R. 4445, entitled Ending Forced Arbitration of Sexual Assault (HR 4445), a bipartisan bill that invalidates pre-dispute arbitration agreements and pre-dispute joint-action waivers with respect to claims of sexual assault and sexual harassment in the workplace. The U.S. House previously passed the bill by a vote of 355-97 on February 7, 2022, and President Biden signed the bill into law on March 3, 2022.
The bill does not automatically nullify all applicable pre-dispute arbitration and pre-dispute joint-action waivers. Instead, it provides individuals raising claims of sexual assault or sexual harassment with the choice of whether to pursue their claim in court or in arbitration. While some claimants may choose to pursue their claims and enforce their rights in a court of law, others may prefer the confidential and typically more efficient arbitration process. In the event of a dispute as to whether the HR 4445 applies to an agreement to arbitrate, the bill requires a court of law rather than an arbitrator to make the determination.
For future agreements, employers should consider that mandatory arbitration clauses with respect to claims of sexual harassment or sexual assault contained in documents executed by workers as a condition of employment or during employment will only be enforceable if employees choose arbitration. For existing employment agreements, mandatory arbitration clauses with respect to claims of sexual harassment and sexual assault will not be enforceable. Employers may want to clarify that employees have the option of pursuing such claims in court or in arbitration. 350c69d7ab