Experts say arbitration protects abusers in workplace

A worker at a Kia car dealership who said her boss groped her. A lawyer at the luxury brand conglomerate LVMH who said a director at the company pinned his body against hers. An actor who said her co-star cracked rape jokes about her in front of cast and crew. A woman who worked at the medical device company Afiniti who said the company’s founder made numerous unwanted sexual advances toward her, culminating on a trip to Brazil, where he allegedly beat and raped her in her hotel room.

On Wednesday, they testified before the House Judiciary Committee. All four women said they reported the behavior to someone at their company. All four women said they were retaliated against for speaking up. And all four women went through mandatory arbitration — an often confidential process that has, for many companies, become the primary way of handling employee disputes.

All four women said the process failed them.

Mandatory arbitration, a process that requires employees and consumers to mediate their grievances with the company in a closed-door forum rather than go to court, is now the norm for many businesses, especially nonunion workplaces.

But more than four years after the #MeToo movement propelled a nationwide reckoning of sexual abuse in the workplace, critics of mandatory arbitration say it has protected toxic, abusive workplaces and the people who run them. Changing this particular process is crucial to making substantive strides on workplace harassment, they say.

Supporters of arbitration, meanwhile, claim the process is a faster, less-expensive alternative for workers than filing a lawsuit in court and could be less intimidating. But workers rights groups and trial lawyers have long argued the process isolates workers and leaves them at a major disadvantage in winning remedy or compensation from their employers.

In Congress, there is a bipartisan push to amend arbitration rules. On Wednesday, the House Judiciary Committee passed the Forced Arbitration Injustice Repeal Act, which would offer workers the option to resolve their complaints through arbitration or the courts.

The bill would give workers with sexual abuse claims against their employers the choice to either go through arbitration or pursue their claims in court.

According to a 2018 report from Economic Policy Institute, a left-leaning think tank, around 60 million workers signed arbitration agreements, effectively barring them from accessing the courts. Legal experts say many of those workers may not know they have signed an arbitration agreement: They are often a condition of employment, with many workers signing them alongside benefits or human resources paperwork — after they’ve already accepted the job.

While some companies have rolled back these clauses, they are so widespread that it’s challenging to find a nonunion company that doesn’t have this requirement, experts say. Up to 80 percent of Fortune 500 companies use forced arbitration, and they are especially common in low-wage industries and service work.