Companies to End Forced Arbitration of Sexual Harassment Claims

Facebook will be ending forced arbitration for sexual harassment claims; Google will be doing the same.

This, from the victims’ perspective, is a good thing, as it permits them access to a wider range of options and remedies should they elect to proceed with their claims.

What is Arbitration?[1]The full scope of the law of arbitration is beyond the scope of this post.

Arbitration is a form of “alternative dispute resolution” in which the case is resolved not in court, but rather in a proceeding before one, or sometimes three, individuals known as arbitrators. An agreement to arbitrate is a contract, and governed by statute – the Federal Arbitration Act, 9 U.S.C. 1 et seq at the federal level; Article 75 of the CPLR at the state level.

Courts have held that claims under, e.g., Title VII of the Civil Rights Act of 1964 – the federal law that prohibits sexual harassment in the workplace – are indeed arbitrable. See McLaughlin v. MacQuarie Capital (USA) Inc., 2018 WL 3773992 (S.D.N.Y. August 7, 2018).

One example of an arbitration provision is as follows:[2]Taken from the MacQuarie case.

As a condition of your employment at [employer], you agree that any controversy or claim arising out of or relating to your employment relationship with [employer], the terms and conditions of your employment or the termination thereof must be submitted for final and binding resolution by a private and impartial arbitrator, to be jointly selected by you and [employer].

Claims Covered: This Agreement to arbitration includes any claim that could be asserted in court or before an administrative agency or claims as to which the employee has an alleged cause of action, including without limitation claims for breach of any contract or covenant (express or implied), tort claims, claims for discrimination (including, but not limited to, discrimination based on sex, pregnancy, race, national or ethnic origin, age, religion, creed, marital status, sexual orientation, mental or physical disability or medical condition, or other characteristics protected by statute), claims for wrongful discharge, violations of confidentiality or breaches of trade secrets, and/or claims for violation of any federal state or other governmental law, statute, regulation or ordinance (including, but not limited to, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Family Medical Leave Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, Title VII of the Civil Rights Act of 1964, the Genetic Information Non-Discrimination Act and any and all claims relating to your employment and/or termination of your employment with the company whether based on state law, commonwealth law, local law, statute, regulation, ordinance or common law). Disputes covered by the Procedure include all such claims whether made against [employer], any of its subsidiary or affiliated entities, or its individual officers, directors, or trustees thereof (in an official or personal capacity).

Generally speaking, the circumstances under which an arbitrator’s decision can be challenged are more limited than those under which a jury’s, or court’s, decision can be challenged.

In sum, the decision by companies – especially tech powerhouses like Facebook and Google – not to force sexual harassment victims to arbitrate their claims is a clear win for such victims.

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1. The full scope of the law of arbitration is beyond the scope of this post.
2. Taken from the MacQuarie case.