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MANDATORY ARBITRATION

You’ve probably signed away your sexual harassment civil rights at work

AP Photo/Andrew Harnik
US Rep. Pramila Jayapal is a leading advocate in the movement to ban mandatory arbitration clauses.
  • Leah Fessler
By Leah Fessler

Reporter, Quartz at Work

This article is more than 2 years old.

Since MeToo erupted, women’s lack of power in workplace sexual harassment cases has become exceedingly apparent.

Even when harassment is clear and persistent—the standards required for harassment to qualify as sex discrimination under Title VII. An amalgamation of legal loopholes, non-disclosures, and outright fear mongering easily silo sexual harassment survivors, barring them from justice.

This is an issue US representative Pramila Jayapal, a How We’ll Win Visionary, is working to resolve in Congress, through legislation known as H.R.4734, or the “Ending Forced Arbitration of Sexual Harassment Act of 2017.” 

This bill is a response to the overwhelming prevalence of mandatory arbitration agreements in the American private sector. As the Economic Policy Institute explains, under mandatory arbitration agreements “workers whose rights are violated can’t pursue their claims in court but must submit to arbitration procedures that research shows overwhelmingly favor employers.”

More often than not, sexual harassment claims fall under the mandatory arbitration umbrella.

In Jayapal’s eyes, the H.R.4734 bill, which has been referred to the House Judiciary Committee, is low-hanging fruit in the fight for gender equality at work. It’s among the most impactful means to liberate sexual harassment survivors from the non-disclosure agreements locking them in silence and arbitration courts that routinely hinder justice. And unlike most legislation on sexual harassment, H.R.4734 has significant bipartisan support across the the House and Senate.

According to a 2017 EPI study, 56.2% of American private-sector non-union employees are subject to mandatory employment arbitration procedures, which means that 60.1 million American workers do not have access to public courts to protect their legal employment rights, and instead must go to arbitration.

Yet far too many of us—myself included—hadn’t heard of this potentially groundbreaking bill.

I spoke with Rep. Jayapal and Vicki Schultz, a Yale Law professor specializing in workplace discrimination, to understand how forced mandatory arbitration works, why it’s such a threat to gender equality, and how all of us, regardless of where we work, can figure out whether we’ve already signed off our rights to bring sexual harassment claims to a public court.

Rep. Jayapal on fighting sexual harassment mandatory arbitration

Leah Fessler: First let’s establish the basics—what is mandatory arbitration?

Pramila Jayapal: Often, what happens in workplaces is, you know, you come in and you’re given a ton of forms on the first day, and you sign them all because it’s part of your employment contract. And a lot of people don’t really read those forms, and even if they do, it’s sometimes hard to push-back and say, “Well I don’t like this clause, or this clause.”

But hidden in those forms for many companies in the private sector are these mandatory arbitration clauses, which essentially means that if you have a complaint as an employee, instead of being able to sue the company and bring forward that complaint in a public court, you essentially give away your right to do that, and you instead go to forced arbitration. And forced arbitration means that there’s a conversation that happens between you and the employer in private, but there’s much less recourse that you can take, which you would have been eligible for in a public court.

LF: And what does this specific bill, H.R.4734, seek to accomplish?

PJ: What we have said in this bill—and I actually believe that forced arbitration of all kinds is something that needs to be looked at and potentially removed—but in this bill we specifically say that sexual harassment should not be included in any forced arbitration agreement, and that employees who come to an employer should always be able to have the choice of bringing their complaint around discrimination, assault, or harassment either to an arbitrator, or to take action against the employer in court.

So that’s the main purpose of the bill, and it has a few other smaller things in it, like it allows people to file an EEOC complaint in addition to a court proceeding, it prevents employers from compelling the arbitration, and even if the employee signed an agreement [that included a forced arbitration clause] before something happened it allows them to bring the complaint to court. It’s not retroactivity, but it’s saying, okay, somebody may have signed a mandatory arbitration clause and then the harassment occurred, and we don’t want the timing of when the harassment happened to be a problem—we want women to be able to bring their cases to court if they want to bring them to court.

LF: If you do go into forced arbitration for sexual harassment, what options are open to you for justice and/or retribution? Could one argue that the outcomes are the same as if you were to go to public court?

LF: Usually this argument wouldn’t stand, because with mandatory arbitration, you can’t use public pressure. You usually have to sign non-disclosure agreements, and there’s usually limitations around what the amount [that would be paid to you as a survivor of sexual harassment] might be. Often it doesn’t necessarily result in real action being taken because it’s “off the front pages.”

I think about forced arbitration as being similar, frankly, to what was happening here in Congress, where an employee would raise an issue with a member of Congress or in a staff office, and then wouldn’t actually be able to go public with it. There was an onerous process, ultimately, by which women would go to arbitration, and there would be some sort of non-disclosure agreement signed.

Forced mandatory arbitration is very similar, and it’s a way of sweeping it under the rug. What happens out of that is often the employees get much less because they’re fighting on their own, and they’re fighting against a big system versus being able to take something to the court and actually force a company to follow the law.

Arbitration leaves it open for a company to say, “Well, we’ll give you this,” you know, but not every employee knows what they’re actually eligible for if they were to go to court. And we don’t think that arbitration is bad in every case, our bill specifically says the employee would have the choice—because some employees do want to go to arbitration, and they should have the choice to go to arbitration or to go to the courts.

What we’re saying is forced arbitration—forcing somebody to have only that option—is the problem, and we want to offer employees the choice to have a couple of different options, which they’re already legally entitled to. This is not giving employees something they don’t have, they’re actually legally entitled to [go to court] and we’re trying to bring that back to employees, rather than having it taken away.

LF: Does that legal entitlement come from Title VII, which protects employees from sex discrimination under the Civil Rights Act?

Yes. Well it’s basically the right to sue around a civil rights complaint—this law gives people the right to do that in the courts, and a lot of these forced arbitration clauses and contracts—not all of them, but a lot of them—attempt to do an end run around civil rights.

LF: Can you speak to the bipartisan nature of this bill—is it surprising this bipartisan support exists at all?

PJ: I think it was a relatively—easy is not the right word, because none of this is easy—but it was really a pleasant surprise to see folks on both sides of the aisle being really committed to doing this. It has been introduced in the House and the Senate, and it’s Senator Graham and Senator Gillibrand in the Senate, and Rep. Bustos, Rep. Stefanik, Rep. Walter Jones, and me in the House.

And interestingly, we’ve had some good responses from corporations too. In 2017, Microsoft quickly said that they were going to eliminate forced arbitration contracts. And I spoke to the folks at Amazon and they actually don’t do forced arbitration contracts at all, but I thought it would be good to start to highlight companies who don’t do that.

Gretchen Carlson [Former Fox News anchor] is very powerful when she talks about this bill, too—this is really her initiative to bring this idea for legislation forward. She is an important part of this because of all the problems she had with Fox News, when she realized “Wait a second, I can’t even bring this [sexual harassment] to court because I signed this forced arbitration agreement, and I didn’t even know that I had.” And so I think that that’s also part of what we’re trying to do with this piece of legislation is educate women across the country that they need to be careful about what they’re signing—they should not sign these rights away, they should push back, and hopefully the MeToo Movement permeates in this way into the private sector as well.

LF: In your eyes, how does this bill fit into the MeToo movement more specifically?

PJ: I think what MeToo is doing is it’s bringing forward a lot of the gender discrimination and inequalities that are along that continuum—MeToo is not just about the final act of assault, and the final big act of harassment, it’s about all the ways in which women get discriminated against, or get diminished, or demeaned that frankly are part of a culture that then lead to that sexual assault and sexual violence. And so I think that it has been useful in having people start to think about all these things as being connected.

I think that there are a number of different ways that it’s entering the consciousness of women to be able to speak up to be able to tell their stories on a whole range of issues, and I think that that’s a very powerful thing because we want to see legislation that not only dismantles the sexism and the racism around violence, but also around the culture of diminishment and demeaning women.

How mandatory arbitration affects you, personally

To complement Rep. Jayapal’s insights, I spoke with Yale Law School professor Vicki Schultz, who answered three specific questions about how to find out whether you’re bound by mandatory arbitration, and what you can do if so.

1. What should I look for if I’m starting a new job?

VS: All employees should look for mandatory arbitration clauses in agreements employers or prospective employers ask them to sign. Employees may be asked to sign these agreements before they start working, or later, as a condition of continued employment.  These clauses require employees to waive their right to bring certain disputes with their employers to a court of law, and instead require them to bring those disputes before an arbitration panel specified by the employer.

Typically, mandatory arbitration clauses will not mention sexual harassment specifically. Instead, they will pertain to all discrimination disputes. Since sexual harassment is just a type of workplace discrimination, requiring employees to arbitrate discrimination disputes automatically requires them to arbitrate sexual harassment disputes, too.

These clauses may be hidden in a paragraph that seems to protect the employee by providing that the employer will not discriminate against them.  For example, in the 14 Penn Plaza v. Pyett case decided by the Supreme Court in 2009, the mandatory arbitration clause provided:

NO DISCRIMINATION. There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership or any characteristic protected by law… All such claims shall be subject to the grievance and arbitration procedure [specified in Articles V and VI) as the sole and exclusive remedy for violations.

Mandatory arbitration clauses may also apply more generally, to any and all disputes arising with the employer. A clause might provide for example: “Employer and Employee agree that any dispute arising either under this Agreement or from the employment relationship shall be resolved by arbitration…”

2. How do I know if mandatory arbitration exists at my present job?

VS: Employees who want this information should ask their human resources department (or the official who hired them) for a copy of any and all agreements they signed. If they are a member of a labor union, they should ask their union representative. If they cannot tell from reading the agreement whether it contains a mandatory arbitration clause, they should ask their employer or union representative directly or go to their local or state agency that enforces laws against workplace discrimination to ask them to read the agreement for them.

3. If I’m already subject to mandatory arbitration, what should I do if I experience sexual harassment?

VS: Even before proceeding to arbitration or court, employees who believe they have experienced sexual harassment have a duty to report the harassment to their employer through any internal complaint process set up by their employer; if there is no such complaint process, they should report the harassment to a higher-up (other than the harasser). There are some pitfalls involved in this process, so employees should consult an attorney or labor union representative if at all possible before reporting.

If they cannot do that, employees should try to take a trusted coworker with them to any meeting where they report the harassment. Keep notes of everything that happens at that meeting and afterward, including any retaliation or reprisal. And, it goes without saying, they should take good notes about all alleged instances of harassment or discrimination and tell trusted co-workers or friends outside the workplace to corroborate what happened.

Federal law has upheld mandatory arbitration agreements under Title VII of the Civil Rights Act. But some states do have laws that protect employees from these clauses or require that certain things be done before their state’s courts will uphold them. So, employees who experience harassment or discrimination should go to their local or state agency that enforces laws against workplace discrimination or to a private attorney for advice.

The Times Up Legal Defense Fund, established through the National Women’s Law Center, is helping victims of sex-based harassment find legal representation they can afford. Legal services offices such as the National Employment Law Center provide pro bono services to people who can’t afford lawyers. Many law schools also have clinics who will represent clients for free. Lawyers affiliated with the National Employees Law Association may have experience with these matters, too, and many private lawyers will give employees a free consultation session at which they can review their agreement.   

Employees who are also subject to these agreements should also get in touch with their state representatives as well as their US Congress representative and Senator. It’s time to change federal and state laws that permit mandatory arbitration, which often stacks the deck against employees in favor of employers.

If you’re interested in reading more background on forced arbitration, check out “The Black Hole of Mandatory Arbitration,” an academic paper by New York University Law professor Cynthia Estlund, published in the North Carolina law review.


This story was originally published in the April edition of Quartz’s How We’ll Win monthly email. Sign up here for monthly dispatches and exclusive interviews on the fight for gender equality at work—written by me, Leah Fessler.

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