Sexual Misconduct Plaintiffs Seek Arbitration Despite #MeToo Law

Some workplace sexual misconduct victims are shunning a federal law enacted to give them the option to sue their alleged harassers, choosing instead to pursue arbitration—the very forum Congress intended to curtail in legislation passed after the height of the #MeToo movement.

The 2022 enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act marked a significant victory for the social justice movement. It sprung from worries that arbitration is less transparent than court proceedings because it keeps outcomes confidential, and makes broader patterns of workplace sexual misconduct harder to expose.

But some workers resist filing their lawsuits in court, instead arbitrating or settling their misconduct claims, due to the persisting stigma around these kinds of cases and fear of being blacklisted from future career opportunities, employment attorneys said.

“We have very detailed conversations about what the road ahead in court would look like, the pros and cons,” said Troy L. Kessler, co-founder of New York-based Kessler Matura PC. Many clients don’t realize what to expect from arbitration or court until they start asking if someone will find their case online, he said.

In industries like finance, where reputation and career mobility are fragile, a job applicant’s lawsuit alleging sexual misconduct or bias claims can influence hiring decisions, said Linda Friedman, founding partner of Stowell & Friedman Ltd., who’s brought several high-profile sex and race bias suits against major financial firms since the 1990s.

“What connects with that is the notion of a person being a troublemaker,” said Friedman, a critic of mandatory arbitration. “The internet is forever. And if you file a claim of sexual harassment or discrimination, it will forever be affixed to your name like a scarlet letter.”

With the law now in its third year, worker-side attorneys have noticed some consistent patterns across generations and industries among plaintiffs who opt to keep their cases out of court.

Federal Carveout

Arbitration agreements are common in the US workplace. The EFAA added a rare exception to the 100-year-old Federal Arbitration Act for workplace sexual misconduct, building on the initial carveout for transportation workers involved in foreign or interstate commerce. The FAA generally favors enforcing valid arbitration agreements.

These pacts have increasingly served as a means for companies to remove the leverage of a court complaint—particularly a potential class action—and require workers to resolve their grievances through private dispute resolution.

The process benefits all parties on a case-by-case basis because it’s more time and cost-efficient than litigation, even though studies show that employers “do better in arbitration,” said Alexander Colvin, a scholar of employment dispute resolution at Cornell University.

Workers “lose publicity as a pressure tactic,” and arbitration settlements are much smaller than a jury verdict, he said.

“The rate of loss in employment discrimination cases on summary judgment in federal courts is generally high,” and some plaintiffs’ attorneys have reported becoming less intimidated by the arbitration process as a result, said Sarah Rudolph Cole, a law professor at Ohio State University and chair of the school’s alternative dispute resolution program.

Robert Baldwin III, managing attorney of Virtue Law Group, advises clients to avoid arbitration, but said settlements “are much more typical.”

Their confidentiality clause, which is strictly enforced, benefits both parties seeking privacy, he said.

“Sometimes, employers are more prone to settle because of the public nature of lawsuits,” Baldwin added.

Generation Split

Worker-side attorneys said they’ve observed a generational divide in how employees approach private dispute resolution.

Younger workers tend to find arbitration more appealing because they’re early in their careers, cannot afford legal expenses from lawsuits that may take years to resolve, and distrust the judicial system, they said.

“A lot of the younger employees that we talk to are skeptical of the jury system. They’ve grown up in an era where there was more distrust” in the courts generally, said David Lowe, managing partner at Rudy Exelrod Zieff & Lowe LLP. “I disagree with that. I believe in the jury system. We’ve gotten some results that I think were favorable.”

Meanwhile, older workers view arbitration in a different light.

This is especially true for those with personal connections to civil rights and social justice movements, who are more established in their careers and thus willing to take risks, Friedman said. They view courts as a crucial check on corporate power.

“Many workers I represent had parents who stood up in the civil rights movement, so they do it with pride. Women who were raised by feminist women, who didn’t get to have careers, do it for their daughters,” she said.

‘Pick Your Poison’

Workers might choose arbitration for valid reasons. But that choice underscores how workplace power dynamics still influence sexual misconduct cases, despite new legal protections, said former Fox News anchor Gretchen Carlson, who waged a public battle over her own sexual harassment claims and has been a leading voice to curb the use of mandatory arbitration.

While workers should have the opportunity to choose their forum, mediation might be preferred because going to arbitration is “not a winning mission,” said Carlson, whose group, Lift Our Voices, helped champion the EFAA’s passage. It’s skewed toward corporations, and remains dominated by White male jurists or Big Law attorneys, she said.

For attorneys advising clients on choosing between arbitration, settlement, and litigation, it can be a tricky decision.

The calculation depends on the claim’s nature and the plaintiff’s willingness to endure a potentially lengthy, and a sometimes retraumatizing court process, they said.

“I have a hard time recommending people to go to arbitration. The way I describe it is like, pick your poison,” Friedman said. “You pick your death because one of them is that you might never work again, or you’ll go through an arbitration process that might not be fair.”