Microsoft Endorses Bill to Outlaw Forced Arbitration of Sexual Harassment Claims

Microsoft Endorses Bill to Outlaw Forced Arbitration of Sexual Harassment Claims

The Ending Forced Arbitration of Sexual Harassment Act of 2017, a bipartisan bill recently introduced in the Senate by Democrat Kirsten Gillibrand of New York and Republican Lindsay Graham of South Carolina, would as its title suggests would bar employers from enforcing mandatory arbitration clauses on employees who come forward with sexual harassment claims. These controversial clauses in employment contracts, which require employees to resolve disputes with their employer in arbitration rather than in court, have been criticized as an impediment to victims speaking out and even more disconcertingly, as tools for silencing victims and letting harassers avoid accountability.

Microsoft on Tuesday publicly announced that it was supporting the bill, with President and Chief Legal Officer Brad Smith writing at the company’s blog:

Over the past couple of weeks, we’ve learned more about the provisions of this bill and the issues it will address. When I recently met with Senator Graham on Capitol Hill to discuss cybersecurity and immigration issues, he followed those topics with a compelling appeal that we consider this new legislation. As he pointed out, as many as 60 million Americans today have no legal ability to bring a sexual harassment claim in court because they work under an employment contract that requires that all such claims be subject exclusively to private arbitration.

Microsoft is also changing its own arbitration policies in line with it support for this legislation, Smith added, acknowledging that “we have contractual clauses requiring pre-dispute arbitration for harassment claims in employment agreements for a small segment of our employee population” and announcing that effective immediately, these clauses are waived.

As Smith notes, the tech giant has been studying the bill for several weeks, but the announcement happens to come in the wake of new revelations about past allegations of sexual harassment and assault at Microsoft and how the company handled them, which were reported at Bloomberg last week after they came to light in files unsealed in an ongoing class-action lawsuit alleging that Microsoft discriminates against women.

Like Google, which is facing a similar suit, Microsoft maintains that it pays and promotes fairly and has resisted efforts by plaintiffs to force them to reveal the detailed compensation data that would back up those assertions. The problem, Bloomberg reports, is that Microsoft has used its internal gender pay equity study to advertise itself as a progressive employer, leading the court to wonder why the data behind that study should remain secret:

To mark Equal Pay Day in 2016, Microsoft published a blog post declaring that for every $1 paid to men at the company, women of the same job title and level were paid 99.7 cents. Not equal but pretty close, the company emphasized.

In court, though, Microsoft argued that it shouldn’t need to reveal the underlying data and communications about the study, saying it fell under various legal confidentiality rules. In June, a neutral arbiter—known as a special master—appointed by the judge for these types of disputes recommended that the company disclose more details to the plaintiffs. “Fundamental fairness,” the special master wrote, “suggests that Microsoft should not be allowed to publicly tout its favorable diversity data, including providing statistics on its success, and then claim the data and resulting method to reach its statistics are privileged.”

The documents unsealed last week also point to what the report describes as “a deeply skeptical internal response” to the pay equity study, mirroring some of the external criticism Microsoft has received regarding its progress toward greater diversity and inclusion. The company has taken some bold steps in the D&I space in the past year, such as tying executive bonuses to meeting D&I goals, but on the other hand, this step came in response to a report showing a decline in the number of women at Microsoft and only small increases in the inclusion of underrepresented minorities.

Microsoft’s push to be the first company to back the Gillibrand-Graham bill also comes as the tech sector writ large faces mounting scrutiny of how it handles sexual harassment and a workplace culture that is increasingly acknowledged to be unwelcoming, hostile, and sometimes dangerous to the women who work there. Even though Microsoft’s announcement was not a reaction to the latest revelations, it may have been made with this growing scrutiny in mind. In the same vein, Facebook recently published its internal sexual harassment policies to position itself as a leader in the conversation about how companies can better address this scourge.