(Bloomberg Opinion) -- The #MeToo revelations that have lately rocked all parts of U.S. business and society made it clear that a cultural revolution has been long overdue. Ultimately, it’s attitudes that need to change, but public policy has a role to play. Reform of employment law can make a valuable contribution — and one reform in particular. More than 60 million Americans are bound by employment contracts that force them to take complaints about sexual harassment to arbitration, not to court. This practice needs to stop.
No doubt, there’s a good case for settling many disputes through arbitration rather than litigation. Lawsuits are time-consuming and expensive, and sometimes benefit the lawyers contesting them more than the victims bringing the action. But this can’t justify denying complainants the right to sue as a condition of their employment. Arbitration isn’t always suitable, and sometimes it’s downright unjust. Recourse to the courts should be available when needed.
Mandatory arbitration has especially pernicious consequences when it comes to sexual harassment. It typically involves a confidential process that spares companies and their senior managers embarrassment. This prevents victims for learning about each other’s cases and acting together. It also shields broken corporate cultures from the kind of public scrutiny they could not withstand.
There have been some moves in the right direction. States such as New York and Maryland have banned mandatory arbitration when it comes to sexual harassment claims — though federal law, in effect, may shield these arrangements. Companies such as Microsoft Corp. and Facebook Inc. have said they won’t force employees to go to arbitration in cases of sexual harassment. (Bloomberg LP doesn’t require its employees to agree to arbitration for sexual harassment claims.) Congress needs to oblige other companies to do the same.
Earlier this year, Democratic lawmakers introduced the FAIR Act. This would prohibit mandatory arbitration as a condition of employment and let employees choose how they want to resolve a dispute. Industry groups are opposed, but Republican resistance to the idea seems to be weakening, in part because of the outcry over sexual harassment. It’s about time: Congress has an especially poor record as an employer in this regard, and needs to heed public opinion on the matter, both as a law-making body and a place of work.
In a healthy corporate culture, sexual harassment would not be tolerated and recourse to arbitration or litigation would rarely be needed. To build the right culture, companies need adequate formal systems for stating clear standards, receiving complaints, and dealing effectively with violators. But internal systems won’t always succeed, and outside forms of dispute settlement and legal redress will sometimes be needed. In such cases, if a complainant freely chooses to go to arbitration, that’s fine. But the law should be clear: The employment contract shouldn’t forbid going to court.
—Editors: Alexis Leondis, Clive Crook.
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