Employment & Labor Insider

On Wednesday, Sens. Kirsten Gillibrand (D-NY) and Lindsey Graham (R-SC) introduced the Ending Forced Arbitration of Sexual Harassment Act. The legislation has bipartisan support, although it's not clear yet how much.

The legislation, which would amend the generally pro-arbitration Federal Arbitration Act, would make pre-dispute arbitration agreements unenforceable in any sex discrimination case dispute under Title VII or that could have been brought under Title VII.

The title is misleading because the legislation as currently drafted applies to all sex discrimination disputes, which could include pay equity disputes, generic sex discrimination disputes (such as failures to promote or discharge cases), pregnancy discrimination and accommodation disputes, and -- in some jurisdictions -- disputes based on LGBT discrimination.

The legislation would be effective upon enactment and would apply to any "sex discrimination dispute" that arose on or after the effective date.

A few FAQs:

What's a "pre-dispute arbitration agreement"?

That is an agreement that an employee signs before any actual dispute with the employer has arisen. It could be an arbitration agreement that the employee has to sign when he or she is hired. It could also include an arbitration agreement that the employer requires all current employees, or all employees in a given department or job classification, to sign.

Would the bill allow an employer and employee who are already in a dispute about sex discrimination to agree among themselves to go to arbitration?

It would appear so.

Would the bill prevent an employer, or an individual alleged harasser, from entering into a confidential settlement agreement with an employee who alleged sexual harassment?

I don't see anything in the bill that would preclude a private, confidential settlement of a sexual harassment claim.

What's the point of this bill?

The stated purpose is to make it harder for employers to keep sexual harassment allegations under wraps through arbitration procedures, which are relatively private. Lawsuits, by contrast, are matters of public record.

I suspect money may be another motivation, because arbitration awards to prevailing plaintiffs are generally lower on average than jury awards.

Does the bill apply to other forms of harassment and discrimination that are illegal under Title VII, like racial harassment?

No.

Why not?

I don't know. Singling out "sex" for special treatment doesn't make a lot of sense to me.

Why does the bill prevent employers from arbitrating sex discrimination claims that don't involve harassment?

I don't know. That doesn't make a lot of sense to me, either, and it seems to go way beyond the issue that the sponsors are presumably trying to remedy -- sexual harassment that is condoned and tolerated, and covered up.

I also don't see a principled basis for treating sex discrimination differently from other forms of discrimination prohibited by Title VII, or differently from other forms of discrimination governed by analogous federal laws, such as disability (Americans with Disabilities Act) and age (Age Discrimination in Employment Act).

Why do employers like to arbitrate?

Not all do. But, in an arbitration, the parties can agree on the arbitrator (as opposed to being randomly assigned a judge in court). Arbitration is often faster and less expensive than court litigation, and the parties may not be tripped up by "technicalities,"* such as rules of evidence or civil procedure. Perhaps most importantly, arbitrations are more private, and the awards to successful plaintiffs are generally lower on average than what a successful plaintiff might get in court.

*I don't really believe that rules of evidence or civil procedure are mere "technicalities." Those rules provide important protections for litigants on both sides.

But these advantages to arbitration don't always pan out. Sometimes both parties will be represented by attorneys, and they will agree to follow the Federal Rules of Evidence and the Federal Rules of Civil Procedure, and they'll even be allowed to file pre-hearing motions to dismiss or for summary judgment. In that case, the procedure in an arbitration may not be much different from what the parties would face in court. Also, although juries can certainly do strange things, and although arbitration awards are "generally lower on average" (why does she keeps saying that?), there have been some bizarre and whopping awards made in arbitrations, too.

Do you favor this legislation?

I think I could live with it, provided that (1) it stays limited to pre-dispute agreements, (2) they narrow it to harassment cases, and (3) they include all types of harassment prohibited under the federal anti-discrimination laws.

But there has been talk elsewhere (not in this bill) about preventing confidential settlements of harassment claims. That is a terrible idea (except as applied to our duly elected representatives), and I think it might hurt harassment victims as much as anyone else.