In a first, Microsoft pushes to ban arbitration in harassment cases
SAN FRANCISCO – Microsoft is supporting a Senate bill that would ban provisions in employment contracts that keep victims of sexual harassment and gender discrimination from making their case in open court.
The giant software maker says it’s also getting rid of the requirement that these cases be handled in private arbitration in the small number of its own employment contracts where they still remained.
The move is the first by a major technology company and comes as an ongoing torrent of sexual harassment claims oust men from powerful perches in the business world and draw greater scrutiny of workplace policies. Whether other corporations will follow suit remains to be seen.
Provisions that force employees into private arbitration have become controversial with the national #MeToo outcry over sexual harassment. The Senate bill’s backers say arbitration silences women and cloaks the identity and activity of serial abusers, allowing sexual abuse to fester in the workplace.
The legislation introduced by Sens. Lindsey Graham, R-S.C., and Kirsten Gillibrand, D-N.Y., is being championed by former Fox News anchor Gretchen Carlson, who accused Roger Ailes, the late chairman of Fox News, of sabotaging her career after she rejected his sexual advances. An arbitration clause prevented her from suing the company, so she sued Ailes instead.
Her $20 million settlement with Fox News’ parent company contributed to the ouster of Ailes, the man credited with making Fox News into the most-watched cable channel.
“Thank you Microsoft. This is a huge victory for the last 17 months of hard work I’ve been doing trying to educate the public and companies about the unfair and secret arbitration clauses in employment contracts — specifically with regard to sexual harassment,” Carlson said in an email to USA TODAY.
Arbitration clauses, which are often a condition of employment, affect an estimated 60 million Americans. Private arbitration heavily favors businesses, according to San Francisco civil rights and employment lawyer Cliff Palefsky, a longtime critic of forced arbitration.
Microsoft says it will continue to mandate arbitration in all other areas. The company’s president and chief legal officer Brad Smith was persuaded to support the bill that restricts their use in sexual harass- ment and gender discrimination cases after meeting with Graham on Capitol Hill, he said in a blog post.
“As each new story about sexual harassment demonstrates, current approaches in this area have proven insufficient,” Smith wrote.
Microsoft also says it’s dropping the arbitration clause in sexual harassment and gender discrimination cases for a tiny number of its employees who were still subject to the requirement. He says Microsoft has “never enforced an arbitration provision relating to sexual harassment.”
A former Microsoft intern who accused another intern of sexually assaulting her outside of work was required to continue working with the alleged perpetrator while the company investigated the claims, according to Bloomberg News, which cited files from a class-action suit alleging gender discrimination at the company.
Voiding arbitration clauses in sexual-harassment and gender-discrimination cases would aid victims by pulling back the veil of secrecy on bad behavior in the workplace, the bill’s backers say. Graham encouraged business leaders and the business community to support the bill during a press conference earlier this month.
“The reason we need to get rid of these clauses is that it’s good for America,” he said.
The U.S. Chamber of Commerce said at the time it would review the legislation. It did not respond to a request for comment Tuesday.