Forced into Employment Arbitration? Sexual Harassment Victims are Saying #MeToo and Beginning to Fight Back – But They Need Congressional Help

Source: Samuel Lack, Harvard Negotiation Law Review Online, August 2020

As awareness of the prevalence and pervasiveness of workplace sexual harassment has grown in the United States, so, too, has the use of mandatory arbitration clauses in employment contracts to shepherd employee claims out of courtrooms and into private arbitration proceedings. Though private arbitration is often touted as cheaper and more efficient than traditional litigation, employees are significantly less likely to win in arbitration and, when they do, their awards are often much less.

Grown out of the expansion of the Federal Arbitration Act (FAA), passed in 1926, mandatory arbitration clauses now cover over half of non-union workers in the United States. Despite evident inequities, Congress has done little to abate the expansion, and the federal court system has adopted a strong pro-arbitration jurisprudence. In recent years, the Supreme Court has gone as far as to limit the use of group arbitration—to the severe detriment of sexual harassment victims amid what can be an already arduous claim process. In response, states and localities have passed laws that forbid or limit the use of mandatory arbitration clauses. These laws, however, are often preempted by the FAA and never take effect. The public has also pushed back against mandatory arbitration and has achieved real success. Many corporations and law firms are stopping the practice amid public pressure, walk-outs, and boycotts.

This Comment will detail the prominent inequities present in mandatory arbitration, particularly in cases of sexual harassment and workplace discrimination. Then, it will advocate for one of two things: (1) judicial reinterpretation of the FAA and its savings clause to permit states to pass laws that restrict the use of mandatory arbitration, or (2) congressional action, namely the passage of the Ending Forced Arbitration of Sexual Harassment Act. This legislation, combined with strategic public pressure on legislators and businesspeople, would lead to immediate relief for sexual harassment victims and signal larger arbitration reform on the horizon.