Attorneys at Sanford Heisler Sharp, along with many other commentators (and, unfortunately, a number of forceful judicial dissents), have written extensively about how arbitration has been distorted and manipulated to deprive employees and other individuals of their legal rights and remedies and prevent them from holding companies fully accountable for unlawful conduct.
Now, after years of stalled efforts in Congress, H.R. 4445 represents the first successful federal legislative inroads into an arbitration regime run amok. The bipartisan bill prevents employers from enforcing pre-dispute arbitration agreements—as well as waivers of class, collective, and joint actions—in sexual harassment and sexual assault cases.
How H.R. 4445 Protects Employees
Significantly, H.R. 4445 avoids any potential litigation disputes over whether a particular arbitration agreement was forced upon the employee or made a mandatory condition of employment. The bill allows any employee subject to such an agreement to freely elect whether to proceed in court or in arbitration.
This was needed to provide a real and meaningful choice to workers. If employers are able to extract arbitration agreements from workers, they are also readily able to extract statements that such agreements were voluntary. Even workers given the ostensible option to opt-out at the point the agreement is imposed are still often pressured to accede to their employer’s wishes and sign onto what is presented as standard employment paperwork.
In many cases, employees are unaware that they are purportedly subject to an arbitration agreement until they try to bring a lawsuit after experiencing unlawful conduct in the workplace. Allowing employees to choose their desired forum at the time they bring a case ensures that they actually wish to proceed in arbitration and were not compelled to do so.
Further, any disputes over whether the statute applies to a particular arbitration agreement and whether an agreement covered by the statute is valid and enforceable are to be determined by a court, not an arbitrator.
This prevents employers from circumventing the law by imposing delegation clauses that require arbitration over the threshold question over whether a dispute must be arbitrated or may proceed in court. Such clauses require a dispute to start out in arbitration, a forum often stacked in favor of employers and corporate interests, just to determine the appropriate venue.
Where the statute declares sexual misconduct cases non-arbitrable at the employee’s election, it is efficient and sensible to allow employees to pursue their claims in court from the get-go. Otherwise, employers could still hail workers into arbitration against their will.
H.R. 4445 is a landmark development that provides critical protections to survivors of sexual harassment and assault. By enabling survivors to join together and pursue claims in court, the bill limits employers’ ability to conceal and perpetuate their acts and shield perpetrators of sexual misconduct.
Burying proceedings in confidential individual arbitration provides for insufficient accountability and deterrence and makes violations more likely to recur. It has long been said that sunlight is the best disinfectant; public accountability will help hold repeat offenders in check and root out impediments to institutional reform.
Carving out sexual misconduct cases from mandatory arbitration is a popular proposition, even among Republicans. Still, to get there, proponents had to repel a bid from the Chamber of Commerce and certain lawmakers to amend the bill to separate out sexual harassment and sexual assault and strip the act’s protections from harassment victims—leaving them subject to forced arbitration.
The Chamber attempted to engage in strong arm tactics, suggesting that the amendment was a “top priority” and that it would closely monitor legislators’ actions and throw its support and campaign dollars behind the amendment’s co-sponsors while withholding it from opponents.
The Chamber’s position was practically and legally untenable as it is often a fine line as to when workplace sexual harassment crosses over into assault, and perpetrators of assault and harassment must be held equally accountable. Fortunately, the amendment was defeated.
There Is Still More Work To Be Done
However, while the attempt to sever sexual harassment claims was unsuccessful, the limitation to sexual misconduct matters leaves significant work to be done. The bill is only a key first step and is insufficient in itself to curb the excesses of an arbitration jurisprudence gone terribly awry.
While the bill’s protections have been deemed particularly salient and pressing in sexual misconduct cases, H.R. 4445 must be used as a model for further legislative efforts. Its provisions must be extended more broadly to cover employment, civil rights, consumer, antitrust, and other areas in which powerful corporate and institutional interests can exploit arbitration to evade responsibility and accountability for their actions and even to break the law with impunity.
For example, why should victims of other types of gender discrimination—in hiring, pay, promotions, and more—be forced to pursue their claims in a corporate haven where their rights are significantly curtailed and the matter is kept under wraps? Other forms of discrimination and harassment (on the basis of race, religion, etc.)? Wage theft? And so on.
Proponents of arbitration reform should celebrate this bipartisan victory and then redouble their efforts to enact more sweeping safeguards for employees, consumers, and other individuals who seek to pursue redress for corporate abuses.
Sanford Heisler Sharp is committed to defending the rights of employees all across the nation. If you want to hold your employer accountable for wrongdoing, then please don’t hesitate to reach out to us to discuss your situation. Call 646-681-7373 or contact us online for a case consultation.
- Jeremy Heisler, Andrew Melzer, and Kate MacMullin. States, the Final Frontier: How State Law and State Courts Can Provide Avenues for Justice and Resist the U.S. Supreme Court’s “Lochner Lite” Anti-Employee and Anti-Consumer Agenda
- Andrew Melzer. The “Tough Noogies” Doctrine: Rights But No Remedies: https://www.law360.com/articles/847396/the-tough-noogies-doctrine-rights-but-no-remedies;
- Danielle Fuschetti. 7 Reasons Arbitration Harms Employees: https://www.sanfordheisler.com/blog/2018/september/7-reasons-arbitration-harms-employees/
- Andrew Melzer, Rebecca Ojserkis, and Lucy Zhou. NFL Vow to End “Race-Norming” Holds Civil Rights Lessons:https://www.law360.com/articles/1401042/nfl-vow-to-end-race-norming-holds-civil-rights-lessons