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Microsoft No Longer Forces Secrecy in Sexual Harassment Claims

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In December, Microsoft announced it will no longer force secrecy in sexual harassment claims through the contract clause called forced arbitration. Going forward, Microsoft’s contracts will have this section removed.

What is forced arbitration?

For too long women, and men, subjected to sexual harassment in the workplace have been unable to take the matter to trial due to this clause. This results in fewer public trials and smaller settlements for the victims as claims are mediated through a third party without the ability to go to court. Just as troubling, forced arbitration hides what may be a widespread or ongoing problem within an organization from public knowledge.

Emily Martin, general counsel and vice president for workplace justice at the National Women’s Law Center, said, “By doing this, Microsoft is saying that it’s going to take concrete steps to make its workplace culture more conducive to addressing and preventing harassment. That message is important above and beyond the impact on individuals whose contracts are about to change.”

Martin further stated, “While Microsoft apparently didn’t use these provisions across its workforce, some companies use them more indiscriminately across their workforces to bind lower-wage workers as well as higher-wage workers. By standing up and saying that it believes that these provisions aren’t fair to employees, Microsoft helps change the conversation in a way that has the potential to help a lot of people by increasing the pressure on companies to do the same.”

Will this change sexual harassment claims?

This is a step in the right direction, however approximately 60 million American workers have these arbitration clauses in their contracts, and according to a study by the Employment Rights Advocacy Institute for Law & Policy, 80% of America’s 100 largest companies use them.

While changing the clauses and culture in the large companies would make a huge impact, working in a small company may still bind employees to forced arbitration in the event of sexual harassment. These companies could be fearful of lawsuits that would put them out of business and are not nearly as visible as a company such as Microsoft. Therefore, they will probably not face media disapproval in the same way and are not willing to take their chances in a court of law just to avoid negative publicity. For them, the forced arbitration clause is an insurance policy.

Legislators see need for reform

In December 2017, a bipartisan group of lawmakers called for legislation to end forced arbitration for sexual harassment claims in the workplace. Rep. Cheri Bustos, a Democrat from Illinois sponsored two pieces of legislation: H.R.4734 and H.R.4570. Sen. Kirsten Gillibrand, Democrat from New York, also backs the bill. Sen. Lindsey Graham, Republican from South Carolina, called on the U.S. Chamber of Commerce to support the bill. Both bills were referred to the subcommittee on Regulatory Reform, Commercial and Antitrust Law.

 

Other blog post from DuBose Law Firm

Arbitration Agreements Change for Nursing Homes and Long Term Care Facilities

Have You Forfeited Your Right to Trial?

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Last year, I wrote a blog on the increased proliferation of arbitration clauses in consumer contracts. (See Founding Fathers Wouldn’t Like Fine Print: Forced Arbitration in Consumer Purchases) This subject recently appeared again in the news as Sen. Al Franken introduced Senate bill S.1133 earlier this year. The Franken bill seeks to limit forced arbitration – a practice which severely curbs the rights of consumers and employees.

ArbitrationArbitration clauses now exist in almost all contracts for credit cards, phone service, and car purchases. It also can be found in agreements with physicians, applications for employment, and nursing home leases. The arbitration clause is usually buried deep in the fine print. On the surface, these agreements may seem to be a positive step reducing overcrowded courts, frivolous lawsuits, and the expense of a trial. In reality, it stacks the deck against the plaintiff and gives a break to large corporations and entities that stand to lose a great deal in a trial by jury. It can also be extremely expensive for the plaintiff – often an individual with little money, but a big grievance.

What is arbitration? It means that instead of a court, presided over by a judge and jury, an arbitrator is assigned to the case. The arbitration occurs outside of our civil justice system. The arbitrator may have no experience as a judge, have full control of what evidence is permitted, and may even have ties to the defendant company, yet their rulings are almost impossible to appeal. Because arbitrations are private, finding out if a company has had prior complaints that ended in arbitration is difficult or unattainable, unlike a jury trial where the information is open to the public.

Eliminating binding arbitration clauses from consumer contracts should be an easy ‘sell’ to Congress, right? Don’t bet on it. It will not be an easy fight since the U.S. Supreme Court has ruled twice in favor of arbitration clauses and the U.S. Chamber of Commerce fully supports these agreements. However, what’s at stake is not just the grievances of a few wronged consumers, but every American’s 7th Amendment right to a trial by jury.

Mandatory arbitration clauses in consumer contracts are effectively opting the entire country out of the Constitution. Corrective legislation that is fair and protects our Constitutional rights is needed. Parties of roughly equal bargaining power can certainly decide to contractually bind themselves to arbitration. But consumers just trying to buy a refrigerator or rent a car shouldn’t be forced to give up their 7th Amendment right in order to complete the purchase.