This article was originally published February 20, 2018 as part of Law360.com's Expert Analysis Opinion
Long overdue, the #MeToo movement has emerged to challenge workplace cultures that foster pervasive sexual harassment. Importantly, this is a movement and not just a moment. As Supreme Court Justice Ruth Bader Ginsburg recently said, #MeToo has staying power. “I don’t think there will be a serious backlash,” she told CNN’s Poppy Harlow, “It’s too widespread.”[i]
The movement is widespread because the problem infects nearly all corners of the economy. In 2016, the EEOC concluded that at least one in four people are affected by workplace harassment in the United States.[ii] Moreover, wherever sexual harassment is rampant, it is likely that racial, religious, and/or homophobic harassment is also occurring. For example, after dozens of women exposed a culture of sexual harassment at FOX News, 13 current and former employees revealed that they had suffered years of racial harassment at the hands of the company’s longtime comptroller.[iii]
Workplace harassment persists, in part, because employees are often reluctant to report it. Some fear they won’t be believed, or that they will be blamed. Others are afraid that nothing will be done, or that they will suffer retaliation for speaking up. Many rightly perceive their company Human Resources departments are more interested in protecting the employer than disciplining transgressors.[iv]
However, there is another barrier which, although less recognized, may be even more important. Quietly, more and more employers have been taking drastic steps to block workers from enforcing their rights. These employers require employees to accept forced arbitration policies as a condition of getting or keeping their jobs. Frequently delivered in fine print to employees on a take-it-or-leave it basis through job applications, employee handbooks, or click-through emails, forced arbitration is resulting in widespread claim suppression.[v]
Unlike a court of law, arbitration is a private forum in which secrecy is the order of the day and the rules and processes are stacked against the employee. Employers write the rules, which can vary widely and must be enforced according to their terms. Depending on the fine print, the normal rules of discovery and evidence may not apply.[vi] Employers usually select the arbitration company paid to oversee the adjudication of the claim, and companies tend to hire a firm with which they have a pre-existing business relationship, giving themselves a “repeat-player” advantage.[vii] Nearly all forced arbitration provisions contain confidentiality clauses that require workers to keep silent about their experiences, with some going so far as to bar employees from acknowledging the process ever took place.[viii]
Additionally, while America’s workforce is increasingly diverse, arbitrators of employment claims are not. According to the Bureau of Labor Statistics, women comprise 47 percent of U.S. workers, and the racial makeup of the workforce is 61 percent non-Hispanic white, 17 percent Hispanic/Latino, 12 percent African American, six percent Asian, and one percent Hawaiian or Pacific Islander.[ix] By contrast, the two largest arbitration organizations in the U.S, the American Arbitration Association and JAMS, are overwhelmingly white and male. The AAA self-reports that only 24% of their roster of arbitrators and mediators are women and/or minorities.[x] JAMS, the largest ADR provider in the world, reports their universe of ADR panelists is comprised of 22% women and 9% persons of color.[xi] Arbitrators’ institutional knowledge base is also remarkably one-sided. The vast majority of arbitrators are retired judges or corporate attorneys who have little to no experience representing plaintiffs in labor, employment, or civil rights cases.
This lack of demographic and professional diversity is problematic because implicit bias can cause decision makers to favor their own in-groups.[xii] The numbers bear it out: an Economic Policy Institute study found plaintiffs in forced arbitration win 21.4% of the time compared with 36.4% of the time in federal court; and the median damages employees are paid amount to $36,500 in forced arbitration compared to $176,426 in federal court.[xiii]
Regrettably, the use of forced arbitration in employment contracts is on the rise. An estimated 60 million non-union private-sector workers are currently bound by forced arbitration policies.[xiv] The National Employment Lawyers Association’s policy affiliate, the Employee Rights Advocacy Institute For Law & Policy, reports that 80 of America’s Fortune 100 companies use arbitration clauses in their employment contracts – and nearly half of those ban employees from joining together in class or collective legal actions when workplace harassment is widespread.[xv]
To be sure, ending forced arbitration will not be the single cure-all to rid the workplace of harassment and discrimination. Studies show, for example, that rates of workplace harassment are lower where women and other marginalized groups are promoted into positions of authority and power.[xvi] At the same time, without a meaningful process for enforcement of workplace legal protections – access to a public judicial forum where perpetrators and toxic workplaces can be exposed and held accountable – the imbalance of power that fuels harassment is unlikely to change.
[i] Ariane de Vogue, #MeToo Will Have Staying Power, Ruth Bader Ginsburg Insists, CNN.com (Feb. 12, 2018), available at https://www.cnn.com/2018/02/11/politics/ruth-bader-ginsburg-me-too-poppy-harlow/index.html.
[ii] U.S. EEOC, Select Task Force on the Study of Harassment in the Workplace Report of Co-Chairs Chai R. Feldblum & Victoria A. Lipnic (2016), available at https://www.eeoc.gov/eeoc/task_force/harassment/report.cfm (noting, “anywhere from 25% to 85% of women report having experience sexual harassment in the workplace”).
[iii] Katie Mettler, More Lawsuits Aimed At Fox News, This Time For Race Discrimination, The Washington Post (April 26, 2017), available at https://www.washingtonpost.com/news/morning-mix/wp/2017/04/26/more-lawsuits-aimed-at-fox-news-this-time-for-race-discrimination/?utm_term=.1d187a2fff62.
[iv] See Anna-Maria Marshall, Idle Rights: Employees’ Rights Consciousness and the Construction of Sexual Harassment Policies, 39 Law & Soc’y Rev. 1, 83 (2005).
[v] Sternlight, Jean R., "Forced Arbitration Undermines Enforcement of Federal Laws by Suppressing Consumers' and Employees' Ability to Bring Claims" (2013). Congressional Testimony. Paper 1 (available at http://scholars.law.unlv.edu/congtestimony/1). See also, Sternlight, Jean R., “Disarming Employees: How American Employers Are Using Mandatory Arbitration to Deprive Workers of Legal Protection” (2015), Scholarly Works, Paper 935.
[vi] The Employee Rights Advocacy Institute For Law & Policy, Taking “Forced” Out of Arbitration (2016).
[vii] Katherine V.W. Stone & Alexander J.S. Colvin, Economic Policy Institute, The Arbitration Epidemic: Mandatory Arbitration Deprives Workers and Consumers of their Rights (EPI Briefing Paper #414)(Dec. 7, 2015)(finding that “the first time an employer appeared before an arbitrator, the employee had a 17.9 percent chance of winning, but after the employer had four cases before the same arbitrator the employee’s chance of winning dropped to 15.3 percent, and after 25 cases before the same arbitrator the employee’s chance of winning dropped to only 4.5 percent”).
[viii] See, e.g., Noam Schreiber and Jessica Silver-Greenberg, Gretchen Carlson’s Fox News Contract Could Shroud Her Case In Secrecy, NY Times, July 13, 2016, available at https://www.nytimes.com/2016/07/14/business/media/gretchen-carlsons-contract-could-shroud-her-case-in-secrecy.html (last visited Feb. 9, 2018).
[ix] Women in the Labor Force, Bureau of Labor Statistics, https://www.dol.gov/wb/stats/NEWSTATS/facts/women_lf.htm#one (last visited Feb. 9, 2018). Labor Force Characteristics by Race and Ethnicity, Bureau of Labor Statistics (October 2017), https://www.bls.gov/opub/reports/race-and-ethnicity/2016/home.htm (last visited Feb. 9, 2018).
[x] See https://www.adr.org/RosterDiversity (last visited February 5, 2018).
[xi] See https://www.jamsadr.com/diversity/ (last visited February 5, 2018)(JAMS lauds a staff of associates comprised of 40% persons of color and 75% female, yet the actual ADR panelists tasked with hearing cases and rendering decisions in employment arbitration remains a largely homogeneous group).
[xii] Understanding Implicit Bias, The Ohio State University Kirwan Institute For The Study Of Race And Ethnicity, http://kirwaninstitute.osu.edu/research/understanding-implicit-bias/ (last visited February 5, 2018).
[xiii] See Taking “Forced” Out of Arbitration, supra, note II.
[xiv] Alexander J.S. Colvin, The Growing Use of Mandatory Arbitration (Economic Policy Institute 2017), available at http://www.epi.org/publication/the-growing-use-of-mandatory-arbitration/.
[xv] Professor Imre S. Szalai, The Widespread Use of Workplace Arbitration Among America’s Top 100 Companies (The Employee Rights Advocacy Institute For Law & Policy, September 2017), available at http://employeerightsadvocacy.org/wp-content/uploads/2017/09/Insitute-2017-Report-Widespread-Use-Of-Workplace-Arbitration.pdf.The practice of incorporating class and collective action bans into arbitration clauses is currently under review by the U.S. Supreme Court in National Labor Relations Board v. Murphy Oil USA, Inc., where the Court is considering whether the bans violates the National Labor Relations Act, inter alia.
[xvi] Frank Dobbin & Alexandra Kalev, Training Programs and Reporting Systems Won’t End Sexual Harassment. Promoting More Women Will¸ Harvard Business Journal (Nov. 15, 2017), https://hbr.org/2017/11/training-programs-and-reporting-systems-wont-end-sexual-harassment-promoting-more-women-will.