The attorneys general of all 50 states, the District of Columbia, and several territories recently signed a letter to Congress urging an end to mandatory arbitration of employment sexual harassment claims. While there has been much public attention paid to the role of nondisclosure agreements in insulating public (and not-so-public) figures from criticism for their misconduct, the role of mandatory arbitration agreements in shielding workplace sexual predators from public disclosure is far less understood but perhaps ultimately more of a problem.
Nondisclosure agreements, of course, are typically part of settlements of harassment claims and therefore exist only when the victim has received some satisfaction for her claim — typically monetary but often career-related. We do not argue that the amounts paid typically reflect the harm done (indeed, recent reports suggest a staggering range of payments from millions to a few thousand). Nor are we confident that internal corporate processes that are usually entailed when the corporate employer pays the victim usually result in meaningful reforms to prevent recurrences of the conduct. The Weinstein debacle alone establishes that that is not always the case. But it remains true that, where there is a nondisclosure agreement, there has almost always been compensation paid and usually escalation of the wrongdoing to higher ups who can, at least in the wake of #MeToo, be expected to have learned the costs of sweeping misconduct under the rug.
But not every claim of wrongdoing, indeed, not every valid claim, results in such a settlement. Employer counsel remains determined to limit the financial costs of harassment and they are aided in that mission by mandatory arbitration agreements that are pervasive in the American workforce. Such agreements, bolstered by the force of the Supreme Court’s broad interpretation of the Federal Arbitration Act, are typically extracted from employees as a condition of employment. They essentially waive what most of us think of as a core protection of American citizenship — the right to a jury trial. That means that any employee who feels her concerns are not being properly addressed doesn’t have the right to take her employer to court. And that reality immeasurably bolsters the employers’ bargaining power, which may explain why so many claims are not treated with the seriousness they deserve to begin with.
Employers respond that arbitration isn’t a waiver of substantive rights, it’s just a shift from one venue (the court) to another (the arbitrator). While there is reason to suspect that arbitrators are more favorable to employers as “repeat players,” one doesn’t have to go that far to see how an arbitration agreement deprives the employee of one of her most powerful weapons to resist sexual predation: the publicity that comes with a public lawsuit. Indeed, a much-touted benefit of arbitration by employer-side attorneys is the reputational protection derived from the privacy of the arbitral tribunal. And if there were ever any doubt about the disinfectant value of sunlight for this kind of misconduct, #MeToo has forever put that to rest.
In short, we strongly support the proposal of the attorneys general, and we urge Congress to act swiftly to enable sexual harassment claims to be litigated in public forums.