Printer Friendly

Under scrutiny: Arbitration clauses at the office.

Byline: David Donovan

When Microsoft announced in December that it was removing language from contracts signed by some of its employees that required them to pursue any sexual harassment claims against the company through binding arbitration rather than through the court system, it was going decidedly against the grain of national trends. According to a study published last fall by a labor-affiliated think tank, 56 percent of private-sector non-union employeesor more than 60 million workersare bound by such mandatory arbitration provisions in their employment contracts, whereas in 1992 that number was just 2 percent. Among large companies, the figure is even higher. But the ongoing national conversation about sexual harassment has prompted a re-think of how they impact the victims of workplace sexual harassment. The arbitration process is private and confidentialin some cases employees may be precluded from even discussing their cases. Critics argue that the confidentiality of arbitration protects harassers, even if inadvertently, and makes it easier for them to go on harassing co-workers. In February, all 56 state and territorial attorneys general co-signed a letter asking Congress to put an end to mandatory arbitration of sexual harassment claims, citing concerns about the secrecy requirements typically incorporated in arbitration clauses and about arbitrators' lack of judicial training and ability to ensure that victims receive due process. The AGs noted that many employees won't even know they're bound by arbitration clauses until they have been sexually harassed and attempt to bring suit. In a statement, South Carolina Attorney General Alan Wilson said that such arbitration agreements are not fair to victims of sexual harassment and the secrecy surrounding them can lead to more people being victimized. Creating a space in the shadows Scott Falls, an employment law attorney with Falls Legal in Charleston, estimated that about 75 percent of the people he speaks with who have had issues relating to sexual harassment are subject to an arbitration clause, a significantly higher number than even five or six years ago. Falls said that such clauses were not a good thing in the sexual harassment context, especially given the confidentiality agreements that usually accompany them. A lot of times victims are hesitant to come forward. I think a lot of victims feel alone in that situation, but if they're hearing that this has happened to other people, there is power in numbers and they're more likely to come forward, Falls said. Allowing confidential arbitration to occur allows serial harassers to live in the shadows and continue with what they're doing without a lot of ramifications. But Brian Church, a shareholder in Robinson Bradshaw's employment law group in Charlotte, contends that arbitration is a faster and cheaper way to resolve disputes, and that this benefits both companies and their employees. He said that the confidentiality provisions of arbitration can likewise often serve the interest of both parties. As for the criticism that mandatory arbitration clauses can end up silencing sexual harassment victims, Church said that workers will often initiate an employment lawsuit in local court hoping to challenge the enforceability of an arbitration clause. While these challenges are often unsuccessful, they can give workers an opportunity to air their complaints publicly. To the extent that there's a notion that a mandatory arbitration provision necessarily keeps these types of disputes and claims from public view, I would say that notion wouldn't be correct, Church said. It is often the case that these things are handled publicly before they're compelled to arbitration, which is a more private dispute. Just a bill sitting on Capitol Hill In the U.S., the law of arbitration is governed by the Federal Arbitration Act, which supersedes any state laws. Over the years, many states have tried to limit the use of arbitration clauses in a variety of contexts, but the U.S. Supreme Court has repeatedly struck down such laws, finding in the FAA a federal policy favoring arbitration. In fact, the surge in arbitration clauses in employment contracts came afterand likely because ofa 2001 ruling from the Supreme Court. Interpreting an ambiguous piece of text in the FAA, the court ruled by a 5-4 margin that employment contracts were not exempted from the law's reach. So with states' hands effectively tied, any protections for victims of sexual harassment would have to come from Congress. Bipartisan companion bills filed in both the U.S. House and U.S. Senate propose to amend the FAA to include a new chapter governing arbitration of sex discrimination disputes. The Ending Forced Arbitration of Sexual Harassment Act would provide that no pre-dispute arbitration agreement shall be valid or enforceable if it requires arbitration of a sex discrimination dispute. Sen. Lindsey Graham, R-SC, is a co-sponsor of the Senate bill. So far, neither chamber has taken any action on the bill. If passed, it would be the first time since the FAA was passed in 1926 that Congress has amended it to exclude a particular cause of action from the law's ambit. (A subsequent federal law did give states some leeway to regulate the FAA's application in the insurance context.) Church said that, in light of that history, he was skeptical that Congress would be inclined to amend the FAA in such a way. But the last year has shown that when it comes to sexual harassment, old ways of doing things can become outdated very suddenly. Falls said the thought that the great attention now be paying to the issue could be an impetus for change. I think things will change. I think there's a lot of energy moving around this issue right now, Falls said. Follow David Donovan on Twitter @SCLWDonovan

Copyright © 2018 BridgeTower Media. All Rights Reserved.
COPYRIGHT 2018 BridgeTower Media Holding Company, LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2018 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Donovan, David
Publication:South Carolina Lawyers Weekly
Date:Mar 14, 2018
Previous Article:Dismissal of Lawyers Weekly's public records suit affirmed.
Next Article:Conviction nixed over bad deportation advice.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |