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Houston Lawyers Say #MeToo Public Policy Shift Should Void Arbitration Pact


Originally published in Texas Lawyer.

In what appears to be a novel move in Texas employment litigation, two Houston lawyers are seeking to keep a sexual harassment case out of arbitration by arguing that resolving the legal dispute in private violates public policy in the #MeToo era.

Rick Prieto and Todd Slobin represent Stefani Bambace, who sued Berry Y&V Fabricators earlier this year after alleging she was sexually harassed by the wife of the president of the company, while working as an in-home tutor for their children.

Bambace alleges that the company retaliated against her by terminating her position a month after she reported to Berry Y&V Fabricators Human Resources Department that she was working in a sexually charged and hostile work environment, in violation of the Texas Labor Code.

The company, in its court filings, maintains that its decision to terminate Bambace’s employment was based on legitimate, nondiscriminatory business reasons, and that no protected activity by Bambace was the motivating cause of the termination.

The company filed a motion to compel arbitration, arguing Bambace’s lawsuit should be sent to private arbitration because she signed an arbitration agreement that covered disputes with her employer, including the “commission of torts, quasi-tortious conduct, and violation of a constitution, statute, rule, regulation, ordinance of common law of the United States of America.”

Bambace recently filed a motion opposing arbitration by arguing that sending sexual harassment cases to private arbitration violates public policy in the era of #MeToo and #TimesUp.

“In the wake of #MeToo and #TimesUp, nationwide public policy calls for transparency with the objective of remedying what is an epidemic in the workplace and holding accountable those who are responsible,” Bambace argued in the motion.

“For these reasons, public policy favors transparency and the litigation of sexual harassment cases in an open judicial system. Without public scrutiny, sexual harassers and the companies that protect them will have little incentive against sexual harassment in the workplace,” Bambace argued.

Slobin and Prieto, both lawyers in Houston’s Shellist Lasarz Slobin, said their case is the first in Texas to attempt to harness the #MeToo and #TimesUp movement as a way to void an arbitration agreement in a sexual harassment case.

“From a legal standpoint, this is a first. But in practice it’s not,” Prieto said, noting that large employers, including Microsoft and some large law firms, have discontinued the use of mandatory arbitration provisions in sexual harassment cases.

“These things need to be litigated openly. And it doesn’t help the public to hide this,” Prieto said of sexual harassment cases.

Butch Boyd and Elizabeth Pratt, lawyers who are defending the company in the sexual harassment case, both did not return calls for comment.

Slobin notes that in February, 56 attorneys general from across the country and territories signed an open letter to Congress calling for legislation that puts an end to forced arbitration in sexual harassment cases. Those attorney generals, including Texas Attorney General Ken Paxton, argue that while there are benefits to arbitration provisions, they should not be extended to sexual harassment cases, and that the secrecy provisions of such agreements are a disservice to the public interest.

“We think the legislature is going to do something about this. And all of the attorneys general have signed a letter to do away with arbitration in sexual harassment cases,” Slobin said. “We’re probably ahead of the curve.’’

Ron Chapman Jr., a Dallas lawyer who represents employers in litigation disputes, said the position that the #MeToo movement makes public policy in favor of voiding an arbitration agreement is a novel question for Texas courts. But he doubts the trial court will void the agreement here, because U.S. Supreme Court precedent has long ruled public policy favors resolving legal disputes in arbitration, and that any state law that interferes with arbitration is pre-empted by the Federal Arbitration Act.

“The Supreme Court has made it crystal clear time and time again that arbitration clauses are to be guided by their terms,” Chapman said.

“So barring an act of Congress quite literally, that argument is unlikely to fly,’’ Chapman said.

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