AGs United Against Mandatory Arbitration in Sexual Harassment Cases

Attorneys General Across US Urge Congress To End Mandatory Arbitration in Sexual Harassment Cases

The attorneys general across the nation don’t often unanimously agree. However, they recently joined together to send a letter to Congress demanding lawmakers prohibit the practice of mandatory arbitration in sexual harassment cases.

As employers should be aware, the #MeToo movement, which was spurred by several high-profile sexual harassment cases, has increased attention on how employers handle harassment claims. Many of the claims, including those against Harvey Weinstein and Bill O’Reilly, were settled both out of court and out of the public spotlight, which some contend allowed the alleged sexual misconduct to continue for many years.

AGs Sexual Harassment Letter to Congress

In their letter, the AGs of all 50 states, the District of Columbia and five U.S. territories acknowledged that while arbitration may make sense in some cases, “they do not extend to sexual harassment claims.” It has been a decade since all 56 U.S. Attorneys General have joined a letter to Congress.

“Access to the judicial system, whether federal or state, is a fundamental right of all Americans. That right should extend fully to persons who have been subjected to sexual harassment in the workplace,” the letter reads. “Yet, many employers require their employees, as a condition of employment, to sign arbitration agreements mandating that sexual harassment claims be resolved through arbitration instead of judicial proceedings.”

The AGs also criticized the manner in which workers sometimes enter into employment agreements. “These arbitration requirements often are set forth in clauses found within the “fine print” of lengthy employment contracts. Moreover, these clauses typically are presented in boilerplate “take-it-or-leave-it” fashion by the employers,” the AGs argue. “As a consequence, many employees will not even recognize that they are bound by arbitration clauses until they have been sexually harassed and attempt to bring suit.”

The AGs also raised concerns about the confidentiality requirements of arbitration clauses, which often keep both the harassment complaints and any settlements confidential. “This veil of secrecy may then prevent other persons similarly situated from learning of the harassment claims so that they, too, might pursue relief,” the letter states. “Ending mandatory arbitration of sexual harassment claims would help to put a stop to the culture of silence that protects perpetrators at the cost of their victims.”

Accordingly, the AGs call on Congress to take legislative action to prohibit the use of mandatory arbitration with respect to sexual harassment claims. “Congress today has both opportunity and cause to champion the rights of victims of sexual harassment in the workplace by enacting legislation to free them from the injustice of forced arbitration and secrecy when it comes to seeking redress for egregious misconduct condemned by all concerned Americans,” the letter reads.

Proposed Bill to Ban Mandatory Arbitration

Late last year, U.S. Senator Kirsten Gillibrand and U.S. Representative Cheri Bustos introduced the Ending Forced Arbitration of Sexual Harassment Act of 2017. U.S. Senators Lindsey Graham (R-SC), Kamala Harris (D-CA), and Lisa Murkowski (R-AK), and U.S. Representatives Pramila Jayapal (D-WA), Walter Jones (R-NC), and Elise Stefanik (R-NY) are cosponsors of Gillibrand and Bustos’s legislation.

Under the bill, a pre-dispute arbitration agreement would not be valid or enforceable if it requires arbitration of a sex discrimination dispute. The term “sex discrimination dispute” is defined as a dispute between an employer and employee arising out of conduct that would form the basis of a claim based on sex under Title VII of the Civil Rights Act of 1964 if the employment were employment by an employer, regardless of whether a violation of Title VII is alleged.

The Ending Forced Arbitration of Sexual Harassment Act of 2017 has a long way to go before it becomes law. In the meantime, several companies, including Microsoft Corporation, have publicly announced that they will discontinue mandatory arbitration requirements with respect to sexual harassment claims. Workers and the company could still elect to pursue arbitration, which can often be a faster and less costly way to resolve claims. Some workers may also prefer to pursue sexual harassment claims via confidential arbitration.

Given the current media attention on sexual harassment claims, New Jersey businesses should continue to review their internal policies and procedures for addressing workplace harassment. The best defense is always to promote a workplace where employees understand that such behavior is not acceptable and will not be tolerated.

If you have any questions or if you would like to discuss the matter further, please contact me, Joel Kreizman, at 201-806-3364.