Many companies require their workers to sign arbitration agreements—contracts that require workers to bring any claims related to their employment through arbitration, a private dispute resolution process outside the court system. Companies often require this of both employees and independent contractors, and arbitration agreements can cover all sorts of claims, including sexual harassment, discrimination, wage theft, and more.
Arbitration greatly favors employers over workers. Workers are less likely to win in arbitration, and if they do win, they are usually awarded less money. It is nearly impossible to appeal a decision in arbitration. Arbitration is private, so the worker loses the leverage that comes with the threat of negative media coverage from a public lawsuit against the employer. Further, because arbitration is private, other workers who may also be in a similar situation lose the ability to learn about their rights or join a class-action when they hear about the case. And many forced arbitration agreements ban class-actions outright, denying workers the ability to join together to bring claims for widespread wrongs like wage theft or discrimination.
A major problem with forced arbitration for workers is that it reduces the already small amount of power any worker has to stand up for their rights in the workplace. Employers often present these forced arbitration agreements as a take-it-or-leave-it proposition, requiring the worker to sign the agreement in order to earn a paycheck from the company—often even in low-wage hourly positions. This puts workers in a bind, because they must choose between agreeing to arbitration and paying this month’s rent or grocery bills.
Some employers are beginning to end their forced arbitration programs. For example, Microsoft ended forced arbitration for sexual harassment claims in December 2017. On November 8, 2018, one week after more than 20,000 employees walked out in protest, Google announced that it was ending its requirement that sexual harassment and assault claims be arbitrated. The next day, Facebook announced it was ending forced arbitration for sexual harassment claims.
Although it seems that the tide may be turning on arbitration for workplace sexual harassment and assault claims, forced arbitration is still pervasive for claims of wage theft, discrimination, and many other workplace wrongs. And because the Supreme Court recently held that companies may include class-action waivers in their arbitration agreements, workers face an even harder uphill battle to pursue their rights. However, not all arbitration agreements are enforceable, and courts in some states, such as New Jersey, have held that arbitration agreements must use very specific language to be valid.
If you believe you have a claim against your employer, but may be subject to an arbitration agreement, it is a good idea to contact a lawyer to determine whether you may be able to bring your claim in court.