Forced arbitration is abused by employers to disempower workers and to keep secrets. It was a concern about these abuses that led members of Congress last year to sponsor legislation to ban the use of mandatory-arbitration agreements to settle sexual-harassment and discrimination claims out of court. In proposing the legislation, Senator Kirsten Gillibrand explained: “When a company has a forced arbitration policy, it means that if a worker is sexually harassed or sexually assaulted in the workplace, they are not allowed to go to court over it; instead, they have to go into a secret meeting with their employer and try to work out some kind of deal that really only protects the predator. They are forbidden from talking about what happened, and then they are expected to keep doing their job as if nothing happened to them. No worker should have to put up with such an unfair system.”
The Ending Forced Arbitration of Sexual Harassment Act of 2017 now has 17 cosponsors in the Senate (including South Carolina Republican Lindsey Graham), while a parallel measure in the House, sponsored by Illinois Democrat Cheri Bustos, has 15 cosponsors.
Congressional efforts to end mandatory arbitration in harassment cases have begun to open up a necessary discussion with regard to the broad threat that these agreements pose to the rights of all workers. Unfortunately, the Supreme Court just weighed in on the wrong side of the debate. The high court ruled this week that companies may use arbitration clauses in employment contracts to bar workers from taking legal action to address mistreatment by employers.
Gillibrand was among the first to respond, noting that “This decision could have devastating consequences for workers, who might now be forced to choose between keeping their jobs and pursuing justice over discrimination or sexual harassment cases.”
The senator’s use of the words “could” and “might” is appropriate. The consequences of this ruling are not yet fully understood. But they are clearly serious, and clearly threatening, for tens of millions of American workers.
The Court’s action invites arbitration abuse. It also creates uncertainty where there should be clarity. While Justice Ruth Bader Ginsberg has suggested that the decision does not “place in jeopardy” discrimination claims that can only be proven through class action, the issue was not addressed in Justice Neil Gorsuch’s decision for the majority. A Bloomberg News analysis concludes that “the impact on civil rights claims is likely to be a subject of future court fights.”