The “Ending Forced Arbitration of Sexual Assault & Sexual Harassment Act,” introduced in the Senate on July 14, sounds like a proposal to help victims of sexual violence. Don’t be fooled. If enacted, the legislation will make it more difficult and more costly for many victims to seek justice.
The bill prohibits employers from using arbitration to resolve sexual harassment claims by employees. Arbitration is a fancy word for resolving disputes out of court. In arbitration, victims can pursue all of the same civil remedies they could otherwise bring in a formal court proceeding in a private, less formal, less expensive setting. Employees who bring their grievances to arbitration typically have their cases resolved more quickly than if they sued in court. They are also more likely to win and collect more money in arbitration than in court.
So, why would anyone want to ban arbitration agreements? The bill’s sponsors claim that arbitration allows employers to hide complaints of sexual harassment, thus protecting their reputations and allowing repeat offenders to evade accountability. Former FOX News anchor Gretchen Carlson, a leading celebrity proponent of the bill, likes to refer to arbitration as a “secret chamber.” It’s a catchy phrase, but it’s simply not true.
Arbitration agreements (not to be confused with non-disclosure agreements) do not require secrecy. They do not prevent victims from telling their stories to the public or the press. Nor do they prohibit victims from cooperating with government investigations or reporting misconduct to state or federal enforcement agencies, such as the police or even the Equal Employment Opportunity Commission.
At times, the agreements may restrict discussion of the specifics of the proceedings, but they do not limit victims from discussing the underlying facts of their case. Indeed, Carlson, herself subject to an arbitration clause, has told her story countless times—in a book, to the media, before Congress, and before live audiences across the nation.
In truth, a court setting can be more restrictive than arbitration on a victim’s ability to share her story in her own voice. Unlike arbitration, which often allows victims to speak freely, in-court testimony is limited to direct and cross-examination, constrained by complicated rules of evidence. Lawyers often caution their clients not to speak publicly while a case is pending. And many court-approved settlements include strict confidentiality provisions.
Unlike celebrities, such as Carlson, many victims prefer to vindicate their rights with their employer without going public or subjecting themselves to harsh media criticism or online trolls. But in equating privacy with suppression, #MeToo activists and supporters of this bill trample individual privacy in favor of more publicity for the movement.
The title of the bill itself—ending “forced” arbitration—reflects a messaging campaign disconnected from reality. Employment contracts are simply that: contracts to be accepted, rejected, or modified. There is no such thing as “forced” arbitration. Recent experience confirms that employment contracts are indeed malleable: Google amended its arbitration policy for sexual harassment in 2018, in response to employee complaints.
There are currently more than half a million cases pending before the U.S. district courts. Recognizing the nightmare of litigation, Congress and the Supreme Court have long favored arbitration as an alternative mode of dispute resolution. Preventing employers from resolving disputes this way does not mean that more victims will be vindicated. To the contrary, it means victims will be kept waiting.
With the many priorities on Congress’s plate, why have members focused on this bill? Ending arbitration has long been a priority of the plaintiffs’ bar, which directs 97% of its political contributions to the Democratic party. While plaintiffs’ lawyers will love the additional volume of potential new cases, the move is not particularly good for victims. A lawyer needs to strike gold only once, against a lucrative employer, to fund his practice for years. By searching for this type of case, however, victims with claims against smaller employers or without slam-dunk facts may struggle to find help, as the plaintiffs’ lawyer financial model can only take on risk if the reward is sufficiently likely.
Not surprisingly, perhaps, the bill exempts another key Democratic constituency—labor unions. Unions give almost 90% of their donations to Democrats. As a thank you, if an employee’s union-bargained contract contains an arbitration clause, arbitration it is. Apparently, even the unions didn’t want to deal with plaintiffs’ lawyers. And who can blame them?
In 2021, women who are harassed at work have the law on their side. It would be nice if women had politicians on their side too. The Ending Forced Arbitration of Sexual Assault & Sexual Harassment Act purports to help women, when, at best, it enriches plaintiffs’ lawyers and coddles unions. We deserve better.