Revoking Mandatory Arbitration Agreements in Sexual Harassment Cases

Katz, Marshall & Banks partner Debra Katz and associate Matthew LaGarde co-authored an article for Bloomberg Law titled, “INSIGHT: The Societal Reckoning Caused by the #MeToo Movement Must Now Translate into Legal Reform.” The #MeToo movement has exposed not only the shameful behavior and negligence of those directly involved in cases of sexual harassment and assault, but it has also brought to light the legal tools and structures that enable perpetrators. Ms. Katz and Mr. LaGarde argue for a significant change to employment contracts that will allow employees to pursue claims in the courts – revoking mandatory arbitration restrictions for those alleging workplace harassment.

Mandatory arbitration often prevents workers from pursuing claims of sexual harassment in the courts, and instead subjects victims to a confidential proceeding where the odds are often stacked against them. The secrecy of such proceedings may preclude the testimony of witnesses, who are unaware that anyone asserted a legal claim. The closed forum may also prevent other victims from knowing about a harasser’s pattern of behavior and coming forward themselves.

Additionally, significantly more arbitrators have backgrounds in representing employers versus employees, and statistics reveal that the more often an employer appears before an arbitrator, the better odds the company has in prevailing.

While Congressional action on this issue seems unlikely in the near future, certain companies have taken it upon themselves to end such agreements. Microsoft announced in December 2017 that it would end mandatory arbitration for employees with sexual harassment claims, and Uber and Lyft recently made similar policy changes.

Mandatory arbitration is not only wrong for victims, but it is bad public policy.  Until it is phased out, victims of sexual harassment will find it very difficult to obtain justice, even in the #MeToo era.

Read the full article here.