FB TO DROP FORCED AR­BI­TRA­TION IN HA­RASS­MENT CASES

Business Standard - - FRONT PAGE - DAISUKE WAKABAYASHI & JES­SICA SIL­VER-GREEN­BERG

Face­book said on Fri­day that it would no longer force em­ploy­ees to set­tle sex­ual ha­rass­ment claims in pri­vate ar­bi­tra­tion, mak­ing it the lat­est tech­nol­ogy com­pany to do away with a prac­tice that crit­ics say has stacked the deck against vic­tims of ha­rass­ment.

Face­book acted one day af­ter Google an­nounced sim­i­lar plans. Last week, 20,000 Google em­ploy­ees staged a walk­out from the com­pany’s of­fices around the world to de­mand that it change the way it han­dled sex­ual ha­rass­ment in­ci­dents. Mi­crosoft changed its ar­bi­tra­tion pol­icy about a year ago, as did the ride-hail­ing com­pany Uber six months ago.

The tech­nol­ogy in­dus­try, known for its ground­break­ing prod­ucts as well as its trend­set­ting of­fice cul­ture, has gone to con­sid­er­able lengths in re­cent years to keep work-force dis­putes out of the court sys­tem. Forc­ing em­ployee com­plaints into ar­bi­tra­tion has be­come as com­mon as free lunches and shut­tle buses to the of­fice.

In ar­bi­tra­tion, em­ploy­ment ex­perts say, the play­ing field shifts to­ward busi­nesses. Cases are de­cided by ar­bi­tra­tors in­stead of judges, and the more cases that com­pa­nies take to ar­bi­tra­tion, the bet­ter they fare, ac­cord­ing to a 2011 anal­y­sis by Alexan­der J. S. Colvin, a pro­fes­sor at the Cor­nell Univer­sity School of In­dus­trial and La­bor Re­la­tions.

“This is a piv­otal mo­ment for our in­dus­try and cor­po­rate Amer­ica more broadly,” Lori Goler, a Face­book vice pres­i­dent, said in a state­ment. “We think this is the right thing to do and hope other com­pa­nies do, too.”

The use of ar­bi­tra­tion clauses, em­bed­ded in the fine print of con­tracts, has soared in the last decade, as cor­po­ra­tions try to keep dis­putes away from pub­lic scru­tiny.

Chris Baker, an em­ploy­ment lawyer and part­ner at the law firm Baker Cur­tis & Schwartz, said ar­bi­tra­tion cases were of­ten heard by a re­tired judge who may not be as em­pa­thetic as a jury to a ha­rass­ment vic­tim. They are of­ten shrouded in con­fi­den­tial­ity, and ar­bi­tra­tion awards tend to be less than those in a jury trial.

Mr. Baker said the moves by the tech firms could chip away at ar­bi­tra­tion in all kinds of em­ployee dis­putes be­cause it would be hard for com­pa­nies to draw the line at sex­ual ha­rass­ment.

“I think it’s the peb­ble that starts the avalanche,” he said. “This is very mean­ing­ful.”

The tech in­dus­try is re­act­ing, at least in part, to anger among em­ploy­ees that ha­rass­ment has of­ten gone un­pun­ished, par­tic­u­larly when pow­er­ful ex­ec­u­tives are in­volved. The walk­out at Google was prompted by a New York Times ar­ti­cle last month that re­vealed the com­pany had paid out mil­lions in exit pack­ages to ex­ec­u­tives even af­ter it found that they had been cred­i­bly ac­cused of sex­ual ha­rass­ment.

Be­cause the claims are of­ten kept un­der wraps in con­fi­den­tial ar­bi­tra­tion hear­ings, crit­ics say ha­rassers of­ten move eas­ily to other jobs with­out warn­ing to fu­ture vic­tims.

It has be­come a sig­nif­i­cant is­sue in Sil­i­con Val­ley, where gen­der im­bal­ance is stark and tales of sex­ual ha­rass­ment are ram­pant. Crit­ics of ar­bi­tra­tion re­quire­ments have pushed com­pa­nies to do away with ar­bi­tra­tion and con­fi­den­tial­ity clauses that of­ten

help com­pa­nies keep the pub­lic and their own em­ploy­ees in the dark about bad be­hav­ior.

The Equal Em­ploy­ment Op­por­tu­nity Com­mis­sion has noted that forced ar­bi­tra­tion “can pre­vent em­ploy­ees from learn­ing about sim­i­lar con­cerns shared by oth­ers in their workplace.”

Face­book said it would now make ar­bi­tra­tion an op­tion, but not a re­quire­ment, for em­ploy­ees re­port­ing a sex­ual ha­rass­ment claim. Face­book said it had been plan­ning to make the changes to its ar­bi­tra­tion pol­icy for “a while” but did not spec­ify a time frame. There is no in­di­ca­tion the com­pany was fac­ing spe­cific pressure to al­ter its poli­cies.

In May, Uber an­nounced that it was elim­i­nat­ing the prac­tice for em­ploy­ees, rid­ers and driv­ers who make such claims against the com­pany. Uber took the step af­ter 14 women who have

ac­cused Uber driv­ers of sex­u­ally as­sault­ing them wrote a let­ter to the com­pany’s board, urg­ing it to waive the re­quire­ment and al­low them to pro­ceed with a law­suit in open court.

Lyft, Uber’s top com­peti­tor, made a sim­i­lar pol­icy change around the same time.

In December, as Mi­crosoft faced a pro­posed class-ac­tion law­suit by fe­male tech­ni­cal staff claim­ing dis­crim­i­na­tion, it vowed to end the ar­bi­tra­tion re­quire­ment for ha­rass­ment claims. The women lost the case and are ap­peal­ing.

Mi­crosoft’s pol­icy change was largely sym­bolic be­cause the com­pany rarely used ar­bi­tra­tion clauses in its em­ploy­ment agree­ments. How­ever, Mi­crosoft also said it would sup­port fed­eral leg­is­la­tion mak­ing the re­quire­ment of ar­bi­tra­tion in ha­rass­ment cases un­en­force­able.

REUTERS

Out­side the Face­book head­quar­ters in Menlo Park

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