Shedding Light on Forced Arbitration at Work

Author: Nicki Malekadeli
Posted on: November 4, 2019

The anti-sexual assault and women empowerment movement #MeToo has gained worldwide attention. A  quick browse on Twitter will reveal thousands of users who share their stories as victims of sexual harassment with the movement’s hashtag. Many celebrities have also faced serious allegations amid the explosion of the movement. Along with this discussion is the topic of forced arbitration for sexual harassment cases in the workplace. 

Many enterprises and big brands have faced numerous criticisms on how they deal with sexual assault and harassment. These cases usually involve forced arbitration processes. For example, Google is one of the biggest companies to face such controversy, which pushed the company to end forced arbitration publicly. In late 2018, Google effectively waived forced arbitration for sexual harassment cases after thousands of employees walked out to show their disapproval of how the tech giant handles sexual harassment cases. At that time, this was considered a huge win for Google employees and a hopeful sign for workers in the US. Recently, many more people, especially those in California are celebrating after California Governor Gavin Newsom signed AB 51, a bill that prohibits forced arbitration in the workplace. But what does forced arbitration mean? In this article, we will shed light on forced arbitration at work and how it can affect employers and employees, alike.

What is Forced Arbitration?

Forced arbitration or mandatory arbitration forbids workers from suing their employers for sexual harassment. Instead of going to a public hearing, employees subject to forced arbitration are required to bring any legal complaints to a third-party arbitrator. An arbitrator is chosen by an agency and is paid by the employer to make a decision. Since the hearing is private, the facts about the case are strictly confidential and arbitrators do not need to provide a written explanation for their decision.

Can Forced Arbitration be Beneficial for Employees?

Despite the common perception that forced arbitration only benefits employers and puts employees in an unfair situation, some argue that forced arbitration can also be beneficial for employees. Due to its less complicated procedures, an arbitration process is typically much faster than that of a court proceeding that can take multiple years. As such, solving cases through arbitration also requires less cost. In addition, arbitration proceedings are more flexible. This means that the availability of everyone involved is taken into consideration when arbitration hearings are scheduled.

Workers Should Take Caution

Critics of forced arbitration clauses insist that the arbitration system hugely favors employers over employees. According to them, most employees feel forced to sign contracts that prohibit them from suing their employers. In fact, more than 55% of US workers are subject to mandatory arbitration. However, many employees are unaware of this fact, while some employees are left powerless to sign a contract with a binding arbitration clause because of job necessity. Some say that they may have overlooked the clause because it’s usually hidden in the fine print.

One of the biggest criticisms against forced arbitration is its confidentiality. For example, repeat offenders will be unknown to the public, and complainants will not be aware if there are other employees who have a similar experience. Additionally, the lack of a mandatory written explanation for the arbitrator’s decision can cast some doubt about the impartiality of the process. This also makes it hard for complainants to make an appeal.

Employers historically often win arbitration cases. Unfortunately, employees who receive unfavorable decisions are also at risk of losing their jobs. Once an employee, usually a woman, makes a sexual harassment claim and the arbitrator decides it to be untrue, employers can use this as a reason to fire her.

What Can Be Done?

Mandatory arbitration has been the center of many debates. Feminists have been very vocal against forced arbitration in the workplace as they believe that this protects harassers and absolves them of accountability. Most companies, however, believe that the arbitration process is more efficient and cost-effective, and its less complicated procedures save everyone from unnecessary stress and expenditure. However, some companies have also seen the disadvantages of forced arbitration. Among them are low employee morale and high turnover rate. Sexual harassment experiences can negatively impact the performance of even the best employees and, therefore, drastically decrease their productivity and may even push them to effectively quit their jobs.

Given these complications, employers, especially those outside California must carefully study the possible effects of mandatory arbitration while employees should be more careful and thorough when signing employment contracts. It is high time for companies to see beyond costs and profits and prioritize the welfare of their employees as these can also help them maintain a more friendly and productive workplace for everyone. At the same time, employees should be more proactive in their employment decisions and should keep themselves well-informed so that they can protect themselves from unfavorable circumstances.

If you are a victim of sexual harassment and would like to know more about your employer’s forced arbitration policy, seek legal guidance from our seasoned employment attorneys in Los Angeles. We will help you navigate this complex legal process and strive to achieve the most favorable outcome for you.