Alex Vlaisavich is the firm’s guest blogger. He is a full-time student at Wheaton College and an intern at Favaro & Gorman, Ltd.
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act is on the verge of being being signed into law. After garnering bipartisan support in the U.S. Senate Judiciary Committee, the bill passed in the Senate as a whole and moved to the House of Representatives where the House Judiciary Committee advanced the bill as well. Should the act be approved in the House, President Biden has already conveyed support for preventing mandatory arbitration in the workplace regarding sexual harrasment and assault.
Delving into the bill itself, what it aims to do is ensure that victims and/or charging parties possess the ability to bring their case to court rather than be constrained by the bounds of arbitration proceedings. (The bill includes an exception for arbitration clauses in union contracts). For reference, arbitration is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons, the arbitrator(s) whose decision is binding upon the parties involved. Unlike public cases, arbitration is nearly always confidential and can be accompanied by nondisclosure agreements. Proponents of arbitration emphasize the timely and cost effective manner in which it is conducted. However, opponents of arbitration, particularly within the employment realm, point out that arbitration is often stacked against the charging parties who more often than not are singular employees. Within the arbitration proceedings, the charging employees often must present a stronger case than seasoned defense attorneys who usually have experience in arbitration. Even if the employee triumphs and a settlement is reached, they often are left unfulfilled with the outcome, as monetary amounts do not necessarily live up to the desired standard of justice. Compared to civil lawsuits, monetary awards received during arbitration pale in comparison.
What the act will do is potentially disrupt the cycle of abuse that is perpetuated by the wall of secrecy that arbitration provides. Faced with the potential of public litigation, Congress hopes that abusers will be more deterred from engaging in this illegal and inappropriate behavior.
Senate Judiciary Committee Chair Dick Durbin (D-IL) who helped to introduce the bill, commented saying, “The bill before us today would give survivors of sexual assault and harassment a choice to go to court instead of being forced into arbitration under the fine print of contracts signed before the dispute arose.” On the opposite side of the aisle, Senator Lindsey Graham (R-SC) who also helped to head the bill, stated, “Under current law, many employment contracts require binding arbitration no matter the nature of the grievance. When it comes to sexual assault and harassment, I believe these types of agreements have a chilling effect and should be banned.” Regardless of politics, both sides understand the current injustice and urgency to address the issue. In that sense, Congress can be applauded for conjoining in a bipartisan manner during a very polarized time.
Interestingly, this is not the first time that the issue of forced arbitration has made its way to Congress. In 2019, the House passed the Forced Arbitration Injustice Repeal Act (FAIR Act) which was a more overarching bill created with the intention of banning mandatory arbitration agreements in all civil rights, future employment, consumer and antitrust cases. Even within the business world, mandatory arbitration is on the decline. In 2017, Microsoft became one of the first companies to end mandatory arbitration for sexual harassment. Then in 2018, Uber and Lyft followed suit and in 2020, Wells Fargo implemented the same policy. If anything, it is clear that society as a whole is moving in the direction of ending mandatory arbitration when circumstances may lead to unbalanced leverage. While public litigation is far from perfect, there are indeed benefits of bringing certain issues to light both on a micro and macro level.
DISCLAIMER: The above is not and should not be interpreted as legal advice. It is for informational purposes only. You should consult an attorney for legal advice. If you or someone you know are a victim of harassment and are seeking representation, click here to reach out to our firm.