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Arbitration: Soon A Thing of the Past in Sexual Harassment Cases?

In early February, all the Attorneys General in the United States and United States territories, fifty-six in all, sent a letter to Congress advocating for federal legislation prohibiting arbitration provisions in sexual harassment cases.  The significance of the #MeToo movement can be seen in this showing of unity because the Attorneys General have not all acted together for a common cause in over a decade!

In their letter to Congress, the Attorneys General note victims of sexual harassment should not be subjected to decision makers who are not trained as judges and who are not positioned to ensure procedural and substantive due process.  Additionally, the Attorneys General note arbitration provisions encourage secrecy which does not serve the public interest of making complaints and settlements known and thus helping to eradicate this problem. 

In fact, the Attorneys General point out Microsoft Corporation recently announced it would discontinue arbitration provisions with respect to sexual harassment claims in their employment agreements “because the silencing of voices has helped perpetuate sexual harassment, the country should guarantee that people can go to court to ensure these concerns can always be heard.”

In light of the gravity of the #MeToo movement and overwhelming public support, Congressional leaders may enact legislation to prohibit arbitration provisions in sexual harassment cases.  As we saw late last year, Congress already passed legislation prohibiting employers from deducting the cost of sexual harassment settlements if the settlement agreement includes a confidentiality provision.  Arbitration provisions may fall to this same pressure. 

For employers, the #MeToo movement has exposed weaknesses in the effectiveness of sexual harassment training and the culture in American businesses that causes sexual harassment victims not to speak out.  Employers should continue to review their sexual harassment reporting mechanisms to ensure they actually work and re-examine the corporate culture to ensure employees feel encouraged to speak out about any potential claims.  Failure to do so exposes the company to huge financial liability and a possibly more damaging public relations liability. 

Brody and Associates regularly provides training and counseling on maintaining a harassment free environment and on employment law issues in general. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.