(Reuters) - A bipartisan group of lawmakers on Feb. 10 enacted one of the most momentous workplace rights reforms in more than a decade, and Congress’ most significant legislation against sexual harassment and abuse since the #MeToo women’s movement began five years ago.
The U.S. Senate approved a bill to ban companies from making employees sign away their rights to file a lawsuit over sexual assault or harassment, and to force them to take their claims to confidential arbitration instead. The House of Representatives had passed its version of the bill earlier.
Still, the Ending Forced Arbitration of Sexual Assault Act comes with substantial limitations. The bill will certainly benefit women in the workplace, and especially higher-paid workers, but its narrow scope and limited application call attention to the vast room for improvement remaining in these areas.
Those measures would have made it easier for Americans to get a day in court over workplace claims for harassment, discrimination, and unpaid wages, and even consumer claims related to contracts for cell phone service and credit cards. The proposals also included prohibitions against contracts that limit class actions.
Other lawmakers had proposed bills that would have prohibited non-disclosure agreements in harassment cases, and compelled public companies to disclose sexual harassment settlements.
Republicans and business groups including the U.S. Chamber of Commerce pushed to maintain the status quo, arguing that banning mandatory arbitration would deprive workers, consumers and businesses of a cheaper and faster alternative to court.
The bill enacted on Feb. 10 only applies to cases of sexual harassment and sexual assault and doesn’t cover other employment disputes – including those based on gender discrimination.
A spokesperson for Iowa Senator Chuck Grassley, the top Republican on the Judiciary Committee, didn’t respond to a request for comment. Grassley supported the recently enacted and narrower policy, but didn't back earlier, more far-reaching limits on forced arbitration.
Representatives of the Chamber of Commerce didn’t respond to requests for comment.
Terri Gerstein, a fellow at the Harvard Law School Labor and Worklife Program, told me the legislation is an “important first step,” and a major accomplishment, especially given the stark partisan divide in Congress and businesses’ strong interest in keeping disputes out of court.
“I would not understate what a real accomplishment this is, and how meaningful it is to women who have faced harassment and assault,” Gerstein said. “It demonstrates a bipartisan recognition that forced arbitration is unfair to workers and that the secrecy is a problem.”
But Gerstein said she also wouldn't understate the importance of ending forced arbitration in wage, race discrimination and other types of workplace disputes.
Indeed, the policy itself raises the question: Why is confidential, mandatory arbitration unacceptable for sexual harassment and assault claims but apparently not for a gender discrimination or race-based assault case, for example? (Grassley has said that women’s issues are a “hot issue right now” and that sexual misconduct is easy to cover up, Politico reported Feb. 10.)
Also a concern is how employees and their lawyers should deal with “intersectional" problems under the new law – the fact that many sexual harassment claims might also include gender discrimination claims, or that complainants often allege discrimination based on multiple categories and facets of their identity?
Those questions are left unanswered and suggest that Congress could do much more to address women's rights in the workplace (and beyond).
Studies have shown that forced arbitration tends to suppress sexual harassment claims. That's not surprising given that the two principal arbitration providers in the U.S. are for-profit enterprises, where the vast majority of arbitrators are white males. A report in June 2021 by the American Association for Justice found that 77% of their arbitrators are male, and 88% are white.
Beyond sexual harassment claims, businesses use the clauses in all kinds of employment and consumer contracts as a way of settling potential claims more quietly, and cheaply – or avoiding them altogether.
More than half of American workers in the private sector are estimated to be subject to mandatory employment arbitration, and it’s more common among low-wage workers and sectors disproportionately made up of Black and women workers.
The number of consumer and workplace claims sent to arbitration has been steadily rising for years, jumping 17% in 2020 compared with 2019, according to another recent report by the American Association for Justice.
Still, only 577 Americans won a monetary award in forced arbitration in 2020, and even fewer did in employment arbitration -- just 82 employees, out of an estimated 60 million workers subject to the clauses, according to the American Association for Justice.
The Ending Forced Arbitration of Sexual Assault Act represents a noteworthy improvement to women’s workplace rights, but it fails to address obvious, similar concerns about public accountability and corporate bias in arbitration for other consumer- and work-related claims, including even gender bias.
Much more work remains to address these issues.
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