Earlier this year, the U.S. Supreme Court ruled in Epic Systems Corp. v. Lewis that employment contracts may require workers to solve their employment complaints in individual arbitration.
Many employees and their advocates have criticized the use of individual arbitration mandates, particularly in sexual harassment and other discrimination cases. For one thing, employment agreements with arbitration clauses are typically the product of uneven bargaining power — employees may prefer court over arbitration, but they don’t have enough power to reject the arbitration requirement. For another, the requirement keeps employees from joining together in collective or class action lawsuits, which would allow the workers to share costs.
Moreover, arbitration is private and creates no precedent. Even if a plaintiff wins, there may be no way to force the employer to change its policies. Furthermore, companies may combine arbitration with nondisclosure agreements that prevent harmed workers from speaking out. This can allow employers to continue their illegal behavior.
However, although arbitration policies continue to be popular among employers, some in the tech industry have been pressured by their employees into reviewing these policies.
Much of the activity began with a large-scale walkout of Google employees on Nov. 1, 2018. More than 20,000 members of Google’s worldwide workforce walked out to protest the company’s workplace culture and handling of sexual harassment complaints. As a result, the company promised changes to its reporting process, more transparency for both the accuser and accused when complaints are made, and greater compliance with sexual harassment training. More significantly, it agreed to make arbitration optional in individual sexual harassment and misconduct cases.
Facebook has made a similar change to its policy, eliminating the arbitration requirement in sexual misconduct cases. According to the Associated Press, the change was made in response to pressure by Silicon Valley tech workers. Uber Technologies Inc. and Microsoft have also dropped their mandatory arbitration requirements in sexual harassment cases.
Airbnb has gone even further, disposing of the arbitration requirement in all employment discrimination cases, not only sexual harassment. An Airbnb spokesperson said that the company is the first major tech firm to eliminate the requirement for all discrimination complaints brought by employees. However, cases brought by Airbnb hosts and guests must still be resolved in individual arbitration even if they involve allegations of discrimination or sexual harassment.
If you have questions about how you may be impacted by an arbitration provision in your employment contract, reach out to an employment attorney for guidance.
Want more timely employment law updates? Sign up for our newsletter.