Riding a bipartisan push powered by the #MeToo movement, legislation that would enable workers to sue employers over workplace sexual harassment or assault regardless of contractual restrictions is on the cusp of final votes in Congress.
The House bill would make it illegal to enforce agreements signed before an alleged incident of sexual harassment or assault that mandate third-party arbitration, a form of dispute resolution that is conducted behind closed doors and often favors employers. Workers would be free to sue their employers for workplace sexual misconduct, giving them a chance to seek justice in a public setting.
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Workers’ rights and other advocacy organizations have pushed to nullify mandatory arbitration clauses since the #MeToo movement highlighted how employers can benefit from the out-of-court resolution of workplace disputes—in some cases allowing repeat offenders to escape public scrutiny. The attention prompted some Senate Republicans to break from their party’s steadfast support for employers on workplace matters, creating a rare chance at passage in the upper chamber.
“It’s not a usual position these days,” Ann Olivarius, chair and senior partner of law firm McAllister Olivarius and an opponent of mandatory arbitration, said of the GOP support in the Senate. “It’s quite shocking, but wonderful.”
Employment contracts that lock workers into arbitration if they later experience workplace sexual harassment or assault often discourage employees from coming forward with allegations, advocates said.
Contract language blocking workers from filing lawsuits can particularly be an issue when there are serial problems within a company, said Jeffrey Hirsch, an employment law professor at the University of North Carolina.
“The idea that they can get completely swept under the rug, and even Republicans or pro-employer folks see this as a problem,” he said.
Civil rights advocates and worker-focused groups contend that workers often sign pre-dispute arbitration requirements unwittingly because they are hidden in employment contracts.
Just 4% of Americans—or 577 individuals—won a monetary award through forced arbitration in 2020, research from the American Association for Justice shows. The total number of workplace disputes resolved via arbitration jumped 66% between 2018 and 2020. That includes all workplace disputes, not just those relating to sexual harassment and assault.
Arbitration proponents, typically those more closely aligned with employers, view third-party resolution of workplace disputes as more time- and cost-effective, and a way for victims to avoid public scrutiny. They note that the legislation still allows workers to opt for arbitration, if that is their preference.
House Rules Committee Chairman
“Workers deserve the chance to seek justice in the courts,” he said in an emailed statement.
“Forced arbitration agreements force victims of sexual harassment and sexual assault into a secretive and biased process designed by the very corporations they’re challenging,” she said in an emailed statement. “Mandatory arbitration clauses have a chilling effect on victims and protect perpetrators from accountability.”
A broader legislative proposal that would ban enforcement of pre-dispute arbitration agreements in any context was advanced by the House Judiciary Committee in November, but hasn’t gained as much backing on Capitol Hill.
Olivarius, who is also an advocate for victims, said the narrower bill focused on workplace sexual harassment and assault is on the verge of becoming law precisely because it is “not complete” and doesn’t outlaw all forms of binding arbitration agreements.
“It lets evildoing continue,” she said, arguing that arbitration greatly favors management. “The procedures and protocols are desperately biased.”
Olaoluwaposi Oshinowo, special counsel with Wiley Rein LLP, said arbitration can be an appropriate way to resolve many workplace disputes, especially when both parties knowingly and voluntarily agree to participate.
“There’s this perception, behind this bill and in society in general, that arbitration clauses are buried in the fine print of employment policies,” he said. “That’s a misconception.”
Kenneth Dau-Schmidt, a professor of law at Indiana University, pointed out how the bill gives victims a choice because it bans only mandatory arbitration agreements that were signed before an alleged incident has occurred.
“In other words, if the victim wanted to do arbitration, they could, and there are other instances where the victim could want to do arbitration,” he said.
Olivarius said arbitration is unsuited to harassment or assault allegations. “We want people to go forward and bring claims, but the problem is that those claims aren’t registered any place,” she said.
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