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#MeToo Bill Ends Forced Arbitration in Sexual Harassment Claims

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New legislation will change how companies handle workplace sexual harassment and assault claims. This bill, which enjoyed bipartisan support, is the first major legislation to address problems brought to light in the #MeToo era. President Joe Biden is expected to sign the bill into law.

The Ending Forced Arbitration Act invalidates the use of forced arbitration for sexual harassment claims. Many employers skillfully hid systemic harassment by forcing sexual harassment claims to be settled through arbitration. Employer-employee agreements disallowed suing the employer in court. This bill now gives employees the option to file a lawsuit in cases of sexual harassment and sexual assault.

Other civil violations against protected classes, such as race and religion, are not included in this bill. Advocates hope that other violations will also be eventually exempted from forced arbitration.

If you are experiencing harassment or discrimination at your workplace, contact the experienced attorneys at Shellist Lazarz Slobin. Our firm is dedicated to employment law. We fight for those who have been treated unfairly.

Our Firm’s Advocacy for Voiding Arbitration Pacts

We have promoted the end of forced arbitration for several years. In 2018, a client of ours alleged she was fired after complaining to human resources about being sexually harassed. She was harassed by the wife of the company president when she worked as an in-home tutor for their children.

We filed a motion opposing arbitration, arguing that forcing sexual harassment claims into arbitration violated public policy in the era of #MeToo and #TimesUp. “We fought this matter for several years and it went up on appeal a few times with varying outcomes. At the time, the law was not on our side. I am glad that the government is making a significant change to our legal system that could not get through our courts. This is an incredible day for all victims of sexual harassment. Now, their claims will not be silenced or covered up by blanket arbitration agreements.”

Giving employees the choice to bring their sexual harassment dispute to court is the right step to protect worker rights.

The Ending Forced Arbitration Act’s Beginnings

Former Miss America and Fox News anchor Gretchen Carlson was surprisingly fired from the cable network in 2016. She had been a popular on-air personality at Fox since she began there in 2005.

What came after her firing was a bombshell in some circles. She claimed she was fired because she rebuffed sexual demands from then-Fox News Chairman and CEO Roger Ailes. This revelation became public knowledge in a sexual harassment lawsuit she filed against Ailes.

She originally sought to file a lawsuit against Fox News but was blocked by a mandatory arbitration agreement.

“Forcing victims of sexual harassment into secret arbitration proceedings is wrong because it means nobody ever finds out what really happened,” Carlson said in a video posted to her Twitter account.

That sentiment is the backbone behind the new legislation. The year after her firing, Carlson joined forces with Sen. Lindsey Graham (R-SC) to draft legislation to prohibit mandated arbitration in cases like her own. Carlson also worked closely with Sen. Kirsten Gillibrand (D-NY) and Rep. Cheri Bustos (D-IL to drive the bill forward.

The national Chamber of Commerce and other organizations have opposed the bill. Similar legislation has failed in the past.

Retroactive Provision Invalidates Existing Arbitration Clauses

The bill does more than eliminate mandated arbitration in future employment agreements. Existing forced arbitration clauses are invalidated and unenforceable. No employee is locked into arbitration, at least for sexual harassment and sexual assault allegations.

Arbitration remains an option, but employees now have the option to take their dispute to state, federal, or tribal court.

The act also nullifies predispute joint-action waivers.

The Good and Bad of Arbitration Agreements

Arbitration itself is not evil. Some plaintiffs even choose to take their claims to arbitration instead of court. The problem comes when individuals are not given a choice. Since arbitration is not part of the public record, wrongdoing is more easily hidden from public view.

There are some general advantages to arbitration:

  • Can be quicker than a trial;
  • Simplified rules and procedures; and
  • Resolutions are private so the dispute and resolution can remain confidential.

General disadvantages to arbitration include the following:

  • Arbitrator is not always objective;
  • Laws followed inconsistently;
  • Decisions cannot be appealed; and
  • Can be expensive.

Employers have often taken these general pros and cons and turned them all into advantages for their side. Over the past 25 years, arbitration clauses have become increasingly common in customer and employee contracts. These clauses prevent disputes from going to court. Closed-door arbitration often favors employers. Employees generally win less often and receive lower damages.

The secrecy of the dispute and settlement also benefitted employers. A company could settle dozens of harassment claims quietly through the arbitration process, leaving the public unaware of the repeat violations.

Harassment Claims Come Out of the Shadows

Mandated arbitration for workplace sexual harassment claims will immediately be null and void with the President’s signature. This action will offer survivors renewed options for accountability. In many situations, Employees did not take their claims to arbitration because they felt the deck was stacked against them. The employer pays for the arbitrator and usually has superior bargaining power. However, the Ending Forced Arbitration Act flips that dynamic. The employee now has the power to determine what legal path is best for them.

If you have been subjected to workplace harassment, contact us to better understand your rights. We can evaluate the potential for your case in an initial consultation. Call (713) 352-3433 to schedule.