… to ban forced arbitration of sexual harassment.
The immense #MeToo wave now rolling across the continent toward Washington may soon get a boost from the West Coast.
The ever-independent Golden State is preparing to pass a bill that would strengthen victims’ rights in workplace sexual-harassment cases — in defiance of federal law.
Buoyed by the #MeToo movement, a pair of committees in the California legislature have passed a bill that would bar California employers from forcing job applicants, as a condition of employment, to waive their right to take their sex-harassment claims to court.
The bill’s prospects appear bright.
Opponents say it would run afoul of the Federal Arbitration Act, a 93-year-old law that in recent years has been expanded, controversially, by the U.S. Supreme Court to give corporations wide latitude to deny workers and customers access to a public jury trial.
Employers love that. Forced arbitration saves them money, compared to costly litigation. As a result, arbitration clauses have proliferated, and now show up in every sort of contract.
Nationally, some 60 million Americans have a forced-arbitration clause in their employment contract.
Two-thirds of private employers in the Golden State employ forced arbitration, according to a report by the Economic Policy Institute.
Recently, the controversial clauses have emerged as a defensive weapon for morally compromised corporate executives—invoked, for example, by the powerful cable-TV chief Roger Ailes to prevent his multiple female accusers from airing their stories in open court, and by the disgraced leaders of Wells Fargo Bank to forestall lawsuits by hundreds of thousands of angry, defrauded customers.
Why is this happening? Secrecy.
Arbitration is private. Its results are usually hidden under a nondisclosure agreement. This makes it an ideal tool for squelching negative publicity — and for reducing accountability.
Typically, a clause will require the signer to agree, in advance, to forswear litigation in the event of a future dispute, keep mum about it, and accept, sight unseen, the decision of a private, third-party arbitrator—who is often selected and paid for by the company itself.
Presented as a fine-print ‘take it or leave-it,’ the clause is usually signed unknowingly — or, if understood, reluctantly.
The system’s ultra-secrecy leaves harassment victims in the dark about the existence of other victims or how their complaints were addressed. Isolated and helpless, many remain silent.
Which is great for serial harassers.
In the words of the bill’s author, Assemblywoman Lorena Gonzalez Fletcher, D-San Diego: ‘In a workplace with a culture of sexual harassment, these arbitration agreements are particularly toxic, enabling the abusive behavior to continue unchecked.’
Her bill, AB 3080, is a second try. An earlier version, vetoed three years ago by Governor Jerry Brown, swept more broadly. To win his approval, the new version has been narrowed to ban forced arbitration only in sexual-harassment, discrimination, and wage-theft cases, and to apply prospectively, leaving existing arbitration agreements in place.
The California Chamber of Commerce, representing big business, opposed the vetoed bill and its revised successor, dubbing both ‘job-killers’ that would ‘benefit the trial attorneys, not the employer or employee.’
Meanwhile, in Congress support is building for a national version of the measure, the bipartisan Ending Forced Arbitration of Sexual Harassment Act (H.R.4734 / S.2203), which, as its name suggests, would amend the Federal Arbitration Act to make forced-arb clauses voluntary in sex-harassment cases.
The federal bill enjoys the endorsement of every state attorney general in the nation and of #MeToo hero Gretchen Carlson. It seems unstoppable. Yet GOP congressional leaders are blocking it, in order to please the nation’s largest employers. (Microsoft, to its credit, has voluntarily abandoned the clauses.)
The problem is coercion. The solution is freedom.
Binding arbitration is fine, after a dispute has arisen. Predispute, it’s unconscionable.
By making the clauses voluntary, says Gonzalez Fletcher, ‘We’ll let the market decide if arbitration is as wonderful as the [bill’s] opponents put it out to be.’
At an April 24 committee hearing, Chamber lobbyist Jennifer Barrera praised arbitration as ‘a more open forum’ than a trial, noting California law requires arbitration-company websites to publish disputants’ names, allegations, and outcomes. ‘That’s more data than you’re going to get out of a [county] court,’ she said.
Barrera predicted the bill will ‘probably be preempted’ by federal law. But Steve Smith, of the California Labor Federation, disagreed. ‘We’re confident these provisions are well within the state’s purview without running afoul of federal law.’
Who’s right? There is only one way to find out. Enact the bill.
And then sit back and watch, as an intensified #MeToo wave rolls on toward Washington.
Dean Clancy, a former senior Republican official in Congress and the White House, writes on U.S. health reform, budget, and constitutional issues. Follow him at deanclancy.com or on twitter @deanclancy.