#MeToo Comes to Tech and Raises Questions About Mandatory Arbitration

Mihai Surdu via Unslpash.com
Pictured: Woman holds #MeToo sign in front of her face.

 

By Stephanie Tait

On November 1, 2018, Google workers across the globe coordinated a massive walkout to protest the company’s handling of sexual harassment claims.[1]  Frustrated with the executive leadership’s perceived support for abusers and lack of meaningful action to address claims of harassment, Google employees and contract workers walked out of their offices in an effort to demand change.[2]  In addition to more transparency about incidents of discrimination and harassment within the company, the workers asked for Google to end the practice of mandatory arbitration for cases of sexual assault and harassment.[3]

Mandatory arbitration entered the public spotlight with the emergence of the #MeToo movement.[4] As women started coming forward with their stories of sexual abuse and harassment at work, the movement highlighted that many employers require their employees to sign mandatory binding arbitration agreements as a condition of employment.[5] These agreements stipulate that when employees experience sexual assault, harassment, or even rape in the course of their employment, they cannot bring the claim to court and are instead bound to resolve the dispute through private mediation.[6] Employees who sign these agreements waive their right to a trial by jury and are bound by the findings of the arbitrator, who is usually selected by the employer.[7] Arbitration agreements are also frequently coupled with confidentiality provisions, so employees who experience sexual harassment are often prohibited from disclosing details about the events leading up to the settlement.[8]  Because these pre-dispute agreements are often hidden within standard hiring documents, employees do not even realize they are signing their rights away, or how much influence their employer has in the process.[9]

While this lack of equal bargaining power seems unfair, the Supreme Court has established that the “mere inequality in bargaining power is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context.”[10] In fact, the Supreme Court has routinely upheld the use of mandatory arbitration agreements in employment and other contexts.[11] Congress passed the Federal Arbitration Act, which instructed courts to treat arbitration agreements as “valid, irrevocable, and enforceable,” in 1925.[12]  Since then, the Supreme Court has interpreted the Federal Arbitration Act as policy that favors arbitration agreements.[13]

Recently, the Court sided with employers in Epic Systems Corporation v. Lewis when it held that the Federal Arbitration Act’s saving clause does not invalidate employment agreements providing for individualized arbitration proceedings, which prohibit employees from bringing collective and class action lawsuits against their employers.[14]  The saving clause of the Federal Arbitration Act allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract.”[15]  However, the majority in Epic held that this clause does not create an exception allowing for class action lawsuits when employees enter agreements providing for individualized arbitration proceedings.[16]  Essentially, when employees sign arbitration agreements, they lose their ability to join together and file class action lawsuits or collective actions, which plaintiffs alleged infringed upon their National Labor Relations Act rights to concerted activity.[17] In her dissent, Justice Ginsburg pointed to the labor market imbalance between employees and employers in calling the Court’s decision “egregiously wrong.”[18]

It is true that arbitration can provide benefits for both employees and employers.[19] The process is often quicker and less expensive than litigation, and some employees may prefer that their claims are kept private.[20]  However, mandatory arbitration tends to favor the employer; employers can slant the odds in their favor by selecting the arbitrator.[21] Employers also impose higher costs on employees by forcing them to go through the arbitration process.[22] Arbitration tends to be less expensive for employers, but employees are required to pay large fees prior to submitting arbitration claims and potentially must pay the employer’s attorneys’ fees if they lose.[23] Additionally, the Supreme Court’s deference to arbitration is detrimental to employees who have experienced sexual assault or harassment.[24] Mandatory arbitration plays a role in silencing victims who complain about sexual harassment at work.[25] Since the majority of sexual assault victims are women, and research shows that women who work in male-dominated industries are more likely to experience hostility and harassment at work, mandatory arbitration is especially detrimental in industries with a greater gender disparity and in which the majority of executives are men, such as the tech industry.[26]

Although the Supreme Court has decided that Congress intended for arbitration agreements to be enforced, the #MeToo movement has shed light on this practice and how it harms employees who have experienced sexual assault and harassment in the workplace.[27] The movement has resulted in a push for reform at individual companies, as well as in state and federal legislatures.[28]  Fortunately for the employees of Google, the company responded to the pressure from the walkout and announced that it will end the practice of mandatory arbitration for individual sexual assault and harassment claims.[29] Perhaps one day time will be up for mandatory arbitration in all instances of abuse and harassment in the employment context.

 

[1] Troy Wolverton, Google’s Famous Googleplex Headquarters was the Epicenter for its Worldwide Walkout Over Gender Discrimination – Here’s What It Was Like on the Scene, Business Insider (Nov. 1, 2018) https://www.businessinsider.com/googlers-walked-out-by-the-hundreds-at-its-headquarters-2018-11.

[2] Id.

[3] Claire Stapleton et al., We’re the Organizers of the Google Walkout. Here Are Our Demands, The Cut (Nov. 1, 2018), https://www.thecut.com/2018/11/google-walkout-organizers-explain-demands.html.

[4] See Ann Fromholz & Jeanette Laba, #MeToo Challenges Confidentiality and Nondisclosure Agreements, 41 L.A. L. 12,12, 14 (2018) (highlighting how the cultural reckoning of the #MeToo movement has caused lawmakers to question the use of arbitration, along with confidentiality and nondisclosure agreements).

[5] Alexia Fernandez Campbell & Alvin Chang, There’s a Good Chance You’ve Waived the Right to Sue Your Boss, Vox (Sept. 7, 2018), https://www.vox.com/2018/8/1/16992362/sexual-harassment-mandatory-arbitration.

[6] See Eric Koplowitz, I Didn’t Agree to Arbitrate That! How Courts Determine If Employees Sexual Assault and Sexual Harassment Claims Fall Within the Scope of Broad Mandatory Arbitration Clauses, 13 Cardozo J. Conflict Resol. 565, 571-572 (2012) (reviewing legislative attempts to end mandatory arbitration in sexual assault claims and clarifying that rape is arbitrable under the Federal Arbitration Act).

[7] See Elizabeth A. Roma, Mandatory Arbitration Clauses in Employment Contracts and the Need for Meaningful Judicial Review, 12 Am. U. J. Gender Soc. Pol’y & L. 519, 528; see also Koplowitz, supra note 6, at 570.

[8] See Fromholz & Laba supra note 4, at 12.

[9] See Roma, supra note 7, at 529.

[10] Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33 (1991).

[11] See id. at 23 (holding that a claim under the Age Discrimination in Employment Act of 1967 can be subjected to compulsory arbitration); see also Am. Exp. Co. v. Italian Colors Restaurant, 570 U.S. 228, 230 (2013) (holding that the Federal Arbitration Act does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds potential recovery); AT&T Mobility, LLC v. Concepcion, 563 U.S. 333 (2011) (holding the Federal Arbitration Act preempts state rules regarding arbitration agreements).

[12] 9 U.S.C. § 2 (2018).

[13] See, e.g., Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (holding that the district court abused its discretion in denying arbitration to a contracting company).

[14] Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1616 (2018).

[15] 9 U.S.C. § 2 (2018).

[16]  Epic, 138 S. Ct. at 1616.

[17] Id.

[18] Id. at 1633. (Ginsburg, J., dissenting).

[19] See Koplowitz, supra note 6, at 569 (arguing that arbitration provides possible insurance discounts for employers and is less intimidating than the court system for employees).

[20] Id.

[21] Id. at 570.

[22] Id.

[23] See Ashley M. Sergeant, The Corporation’s New Lethal Weapon: Mandatory Binding Arbitration Clauses, 57 S.D. L. Rev. 149, 168 (2012) (arguing that the benefits of arbitration arise for employees only when the process is voluntary).

[24] See The Emp. Rights Inst. for Law and Policy, The Facts on Forced Arbitration: How Forced Arbitration Harms America’s Workers,http://employeerightsadvocacy.org/wp-content/uploads/2017/12/The-Institute-Faces-of-Forced-Arbitration-Sexual-Harassment-Fact-Sheet.pdf (last visited Nov. 12, 2018) (illustrating that the court rules that allow workers to collect and present evidence may not apply in arbitration, depriving workers of a fair chance to prove their case).

[25] See id.; see also Fromholz & Laba, supra note 4, at 14 (discussing how companies and employers use mandatory arbitration provisions, along with confidentiality and nondisclosure agreements, to keep allegations of sexual harassment and sexual assault secret).

[26] See Vicki Schultz, Reconceptualizing Sexual Harassment, 107 Yale L.J. 1683, 1759 (arguing that many of the most prevalent forms of harassment are actions designed to maintain a masculine status quo at work); see also Victims of Sexual Violence: Statistics, RAINN, https://www.rainn.org/statistics/victims-sexual-violence (last visited Nov. 12. 2018) (illustrating that one in six women will be victims of attempted or completed rape in their lifetime compared with one in three men); see also Daisuke Wakabayashi & Katie Benner, How Google Protected Andy Rubin, the ‘Father of Android,N.Y. Times (Oct. 25, 2018), https://www.nytimes.com/2018/10/25/technology/google-sexual-harassment-andy-rubin.html (discussing how Google protected three male executives who were accused of sexual misconduct while the women involved in the disputes were seen as a liability).

[27] See Vicki Schultz, Open Statement on Sexual Harassment from Employment Discrimination Law Scholars, 71 Stan. L. Rev Online 17, 17, 45 (2018).

[28] See Ending Forced Arbitration of Sexual Harassment Act of 2017, S. 2203, 115th Cong. (2017) (proposing an amendment to the Federal Arbitration Act that would allow employees in pre-dispute arbitration agreements to take their claims of sexual harassment to court); see also A.B. 3080, 2018 Leg., Reg. Sess. (Cal. 2018) (proposing a state law to stop California employers from prohibiting workers from disclosing instances of sexual harassment they experienced on the job); Stapleton, supra note 3 (describing the demands of Google employees who want the company to end the practice of forced arbitration).

[29] Kate Conger & Daisuke Wakabayashi, Google Overhauls Sexual Misconduct Policy After Employee Walkout, N.Y. Times (Nov. 8, 2018), https://www.nytimes.com/2018/11/08/technology/google-arbitration-sexual-harassment.html.