Over the past week, the US Equal Employment Opportunity Commission has sent a series of signals to US employers that it is focusing its energies on rooting out sexual and other forms of harassment in the American workplace. On Thursday, the agency announced that it had filed seven separate lawsuits against employers throughout the country over allegations of sexual harassment and misconduct, as well as racial harassment and other forms of abuse.
“As the nation has seen over the past nine months, harassment at work can affect individuals for years in their careers and livelihoods,” EEOC Acting Chair Victoria A. Lipnic said in a press release announcing the lawsuits. “There are many consequences that flow from harassment not being addressed in our nation’s workplaces. These suits filed by the EEOC around the country are a reminder that a federal enforcement action by the EEOC is potentially one of those consequences.” About a quarter of the lawsuits filed by the EEOC in recent years has involved an allegation of harassment, Lipnic added, as do one third of the 80,000 to 90,000 discrimination charges the EEOC receives each year.
The EEOC also recognizes that most instances of harassment never come to its attention. Studies show that more than 80 percent of harassment victims never file a formal complaint, the agency noted in its statement, while nearly three quarters never even raise the issue internally within their organizations. To that end, and in light of the heightened public consciousness of sexual harassment brought about by the #MeToo movement, the agency is also looking to promote changes in American workplace culture to make harassment less common and more likely to be addressed when it does occur.
On June 11, the EEOC reconvened its Select Task Force on the Study of Harassment in the Workplace, a panel of experts including academic scholars, legal practitioners, and representatives of advocacy groups and organized labor, which was established in 2015 to study the problem of harassment (including, but not limited to, sexual harassment) and what employers and the agency itself could do to prevent and respond to it. In her opening remarks at last Monday’s meeting, Lipnic, who co-chairs the task force along with Commissioner Chai R. Feldblum, stressed that harassment had been on the EEOC’s radar for some time, but that the government could not solve the problem alone:
The US Supreme Court ruling on Monday upholding employers’ right to include arbitration agreements and class action waivers in employees’ work contracts is being celebrated by business associations and employer-side attorneys as a major victory, mitigating the risk of expensive litigation over labor disputes that may arise from honest mistakes rather than deliberate malfeasance. Advocates of arbitration say it is faster and cheaper than a courtroom trial and that the confidentiality of arbitration is a benefit to both employees and employers (though critics, of course, disagree on all of these points).
What individual arbitration does not protect organizations from, however, is reputational risk. We’ve seen this in the public blowback against companies whose arbitration policies are interpreted as them trying to hide ongoing discriminatory behavior. Within the past six months, companies like Microsoft, Uber, and Lyft have abandoned forced arbitration of harassment cases to guard against this risk. The public relations downside to handling these matters quietly may be growing to outweigh the upside in terms of cost and legal risk.
In a 5–4 ruling handed down on Monday, the US Supreme Court ruled that organizations can legally require their employees to sign arbitration agreements in their work contracts and waive their right to resolve labor disputes through class-action lawsuits. The court split on ideological lines, with the five conservative justices voting to allow class action wavers and the liberal minority dissenting, the New York Times reported:
Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by a federal law favoring arbitration and the court’s precedents. If workers were allowed to band together to press their claims, he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”
Justice Ruth Bader Ginsburg read her dissent from the bench, a sign of profound disagreement. In her written dissent, she called the majority opinion “egregiously wrong.” In her oral statement, she said the upshot of the decision “will be huge under-enforcement of federal and state statutes designed to advance the well being of vulnerable workers.” Justice Ginsburg called on Congress to address the matter.
The ruling, which the Times adds could affect some 25 million employment contracts, comes nearly a year and a half after the high court agreed to hear a group of cases on the legality of arbitration clauses and class action waivers. It was not unexpected, given the court’s conservative majority and the inclinations Gorsuch and his right-leaning colleagues have shown in other labor-related cases.
Business groups and employer-side attorneys cheered the ruling, which they say will free companies from burdensome litigation and allow disputes to be resolved through the cheaper and speedier process of arbitration. Labor rights advocates expressed dismay, however, warning that it would result in a rollback of employees’ fundamental rights and would prove particularly disastrous in discrimination and harassment cases. In a Times op-ed, Terri Gerstein and Sharon Block, of Harvard Law School’s Labor and Worklife Program, criticize the ruling for taking away a key safety net for employees:
Uber announced on Tuesday that it would no longer require employees, drivers, or customers who experience sexual harassment on the job or while using the ride-sharing service to adjudicate their claims in arbitration proceedings. Coming in response to pressure from former employees and customers, the change will allow alleged victims of sexual harassment in the US to pursue claims against the company in court. Uber will also no longer bind accusers to confidentiality requirements as a condition of receiving a settlement on the company, though it will continue to keep financial details of such settlements confidential.
In a blog post, Uber’s Chief Legal Officer Tony West said the company would also publish a public safety transparency report including data on sexual assaults and other incidents that take place on its platform.
Hours after Uber’s announcement, Lyft also announced that it was waiving its standard arbitration agreement for sexual assault claims and would no longer impose confidentiality requirements on alleged victims of sex crimes, Recode’s Johana Bhuiyan reported later on Tuesday. Lyft also intends to release a safety report on sexual assault complaints it receives on its platform; Lyft COO Jon McNeil wrote on Twitter later Tuesday afternoon that his company would be happy to work together with Uber on this reporting project.
West said Uber had made its decision in the interest of transparency, but also acknowledged the risk the company was taking in being more open about these allegations (albeit a risk mitigated to some extent by the participation of its chief competitor):
Since last year, the #MeToo movement has blown a hole in the shroud of secrecy that has long surrounded the scourge of sexual harassment at companies of all forms, sizes, and industries, both in the US and around the world. Yet just as the public consciousness of this issue is growing, more sexual harassment complaints are being handled behind closed doors than in the past. The US Equal Employment Opportunity Commission and equivalent state agencies received 41 percent fewer complaints in 2017 than they did in 1997, Bloomberg’s Jeff Green points out—not because fewer employees are getting harassed, but rather because companies have become much more likely to handle these matters internally:
Ninety-five percent of companies now have an in-house complaint process, the Society for Human Resource Management said in a January report. Eighty-two percent have an investigation protocol in place. …
At the company level, HR departments don’t always know the extent of their own problems. The same SHRM report found a wide disconnect between what HR sees and what employees are saying. Three out of four non-manager employees who experienced harassment said they did not report it. At the same time, 57 percent of human resource professionals said that unreported sexual harassment occurs “to a small extent.”
Washington Governor Jay Inslee on Wednesday signed a suite of legislation that will make it illegal for employers to use non-disclosure agreements and other contractual provisions to stop employees from reporting or discussing sexual harassment and assault in the workplace, The Hill reports:
One of the bills Inslee signed would prohibit employers from requiring nondisclosure agreements that would stop individuals from speaking out about sexual assault and harassment in the workplace. Another will prevent nondisclosure agreements from barring employee testimony in civil lawsuits relating to assault or harassment claims. That bill also allows those bringing the suits to conduct discovery on previous harassment claims.
Inslee also signed a new law voiding employment contracts and arbitration agreements that preclude an employee from filing assault or harassment complaints outside their companies.
Washington is the first state to take this kind of action in the wake of the #MeToo movement that revealed the still-high prevalence of sexual harassment and misconduct in the American workplace, including the statehouses in Olympia and other capitals.
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.