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Forced Arbitration – Is it time for a new solution?

On Behalf of | May 21, 2018 | Forced arbitration

More than 56% of American workers are subject to mandatory arbitration.[1] An arbitration clause is an agreement between an employee and employer stating that the employee cannot take any legal claims against the employer to court. Instead the employee must handle the claim through the out-of-court arbitration procedure described in the agreement. Some employees are unaware that they have consented to arbitration until they wish to bring a claim and learn that a mandatory arbitration agreement was included in their employment contract.

Arbitration can be an efficient, alternative method of dispute resolution when it is knowingly and voluntarily agreed to by parties with equal power. However, in the employment context there is often a power imbalance between the employer and their employees. Forcing arbitration in this context, especially in situations involving discrimination and harassment, can allow workplace misconduct to remain secret and unaddressed. prevents employees from taking their complaints public or going to trial. This can shield bad actors in the company and silence employees who have experienced harassment or discrimination. It can also deprive employees of the legal safeguards built into our judicial system. Because arbitration occurs in secret, employees do not have access to a written record of the arbitration proceedings, or the right to appeal the arbitrator’s decision if the law is not applied correctly. Employees are denied the other safeguards that ensure a fair process in a court of law. There is no judge, no jury, and no right to an appeal.

In the wake of #MeToo and #TimesUp, some companies have voluntarily ended forced arbitration in situations involving sexual harassment.[2] Bipartisan legislation has also been introduced in Congress to void forced arbitration agreements that require sexual harassment and discrimination claims to be arbitrated.[3] This legislation would allow survivors of sexual harassment to receive their day in court and discuss their case publicly. The proposed legislation has received broad support from private corporations, advocacy organizations, and the attorneys general of every state and U.S. territory.[4] All fifty-six attorneys general recently signed a letter calling on Congress to pass legislation giving survivors of workplace sexual harassment better access to the judicial system. Their letter noted that “[w]hile there may be benefits to arbitration provisions in other contexts, they do not extend to sexual harassment claims.”[5] The letter also highlighted concerns arising from the secrecy requirements of arbitration, stating that “[e]nding 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.”[6]

Employees who have experienced harassment and discrimination while on the job should have a choice between going to arbitration or taking their claims to court. It’s time to change the laws that permit forced arbitration and give employees a fair chance to be heard and seek justice.