What Was Forced Arbitration for Harassment?
Forced arbitration for sexual harassment was a common employment practice. Prior to Congress banning the practice in early 2022, it used to be that when you took a job at a mid-to-large sized company, you were usually giving up your right to take employer to court if you experienced sexual harassment at work. That language was typically buried in a company's on-boarding materials, somewhere in the paperwork it asked you to sign when starting a new job.
The arbiter was usually hired by your employer and the arbiter’s decision was binding. Worker victories were rare and in most cases, appeal wasn't an option. Companies usually required confidentiality around arbitration proceedings. So if one took place, you were typically not able to discuss your case with anyone, not even your partner, family or friends. A 2018 report by the Economic Policy Institute estimated use of forced arbitration had more than doubled since the early 2000s and over 60 million Americans were bound by it at that time.1
On November 1, 2018, over 20,000 Google workers participated in a mass global walkout to protest the company’s handling of sexual harassment allegations. The walkout was sparked by by a New York Times investigation that revealed top Google executive Andy Rubin had been paid $90 million after the company learning of a credible allegation of sexual assault against him by an employee. Within a week of the historic worker walkout, Google announced it had ended its policy of requiring arbitration for sexual misconduct claims.
In the weeks following the Google worker strike, several large tech companies dropped the practice of forced arbitration for sexual harassment as well including Facebook, Lyft, Square, Airbnb, eBay, and Uber. (Tech companies compete heavily for talent, which may be why the trend developed so quickly in that industry.2) On September 9, 2019 the Force the Issue project launched with the goal of leveraging that momentum in favor of getting other industries to drop the harmful practice. Over the next two years, Force the Issue successfully got over 350 big companies in an array of industries to state on the record that they had either dropped or never used the practice.
In 2020 the Washington Post broke the news that MGM Resorts had dropped the practice after being contacted by the Force the Issue project. In 2021, the Biden Administration's Gender Policy Council requested Force the Issue's data to inform its efforts on this issue. In early 2022, following long standing efforts by an array of worker, consumer, and policy groups and activists, the U.S. Congress passed The Ending Forced Arbitration Act with bipartisan support, effectively ending the practice.
Why Did We Want to End Forced Arbitration?
Getting rid of forced arbitration for sexual harassment was the right thing to do. The practice protected serial harassers and made workplaces less safe. Research shows that arbitration favors employers, most likely because they benefit from maintaining close, ongoing relationships with the arbitrators who decide the cases.3 It was clear: workers should be free to take their cases to court.
It's highly likely that the end of forced arbitration for sexual harassment claims will also help to advance race, gender, and class equity. Research has found women of color are more likely to experience workplace sexual harassment, due in part to a perception on the part of harassers that they have relatively little workplace power.4 Another recent study found that women, African American workers, and low wage workers were more likely to be subject to the coercive contracts that required forced arbitration for sexual harassment.5
Since traditionally marginalized groups are disproportionately impacted both by sexual harassment and forced arbitration, it's not difficult to imagine that ending this practice, even in a limited way, could help to level the playing field. How much less harassment would women of color endure if they were more widely perceived as being powerful at work? How much time, income, and health would women gain if it was easier to expose and eject serial harassers?
Finally, getting rid of forced arbitration for sexual harassment likely benefits companies and investors. Without access to information about cases of harassment, investors have a difficult time assessing whether a company provides a respectful, safe environment, a quality that has been correlated in some reports with positive shareholder returns.6 It’s estimated a typical Fortune 500 company loses over $14 million per year due to absenteeism, staff turnover, and low productivity caused by sexual harassment.7 Ending the practice, therefore, was something many ethical investors wanted.
It's important to note, however, that there is still work to be done on the issue of forced arbitration. At a national level, companies are still able to use this harmful practice with respect to a wide variety of discrimination claims including ableism, racism, and ageism. In 2021 California passed the Silenced No More Act, an expansion of its forced arbitration ban that prevents California-based companies from using this practice for most discrimination claims, not just sexual harassment. We maintain that a similar expansion of anti-forced arbitration law needs to happen at a federal level.
What Was The Force the Issue Project?
The Force the Issue project launched September 9, 2019 as a joint project between LedBetter Gender Equality Index, Grab Your Wallet Alliance, and Robasciotti & Philipson. The goal was to get companies as many companies as possible to end the harmful practice of requiring arbitration for sexual harassment claims.
The project’s launch was accompanied by a statement of support from a wide array of institutional investor groups representing $54 billion in investor assets.
In the spring of 2022, following long standing efforts by a wide array of worker, consumer, investor, and policy groups and activists, the U.S. Congress passed The Ending Forced Arbitration Act with bipartisan support, effectively ending the practice of forced arbitration for sexual harassment at large U.S. corporations.
Two years prior, the Washington Post published a report on Force the Issue's success in pressuring hundreds of large corporations to drop the practice. Less than one year prior to the passage of the new law, the White House Gender Policy Council requested (and received) Force the Issue's data to inform the Biden administration's consideration of the issue.
Before publishing a company profile page, we reached out to that company to ask if it requires arbitration for sexual harassment claims. In our queries, we asked companies to let us know whether they outright require arbitration for sexual harassment claims, require it by default with an opt-out provision or simply didn't require it at all.
We let these companies know that a lack of response would be interpreted as an indication the organization likely does require arbitration for sexual harassment claims. (Statistically, most private-sector employers with 50 or more employees do.9) Such companies were listed in the database as "Probably requires arbitration for sexual harassment."
When a company indicated to us that some or all of its employees are required to use arbitration for sexual harassment claims, its status in this database was listed as "requires arbitration for sexual harassment."
When a company indicated an employee must opt out of its arbitration services in order to avoid having to use them for sexual harassment claims, the company’s status in the database was listed as "Requires arbitration by default (with opt-out provision). For the purposes of this database, an opt out provision was defined as an affirmative or proactive step an employee must take in order to preserve her own rights.
The category "practices of concern" was used on the site when a company offered a response / communicates in such a way that its policy remains inscrutable even after good faith attempts to clarify. It may also be used in cases in which a company claims the full details on the company's policy are not known.
This website was being used to track companies’ responses to our inquiries. When a company reached out to let us know it has changed its policy regarding use of arbitration for sexual harassment claims, we update the site with that information in a timely fashion. Status field changes are tracked in the Timeline of Changes area as well as in each company’s profile page.
Many of the companies we contacted are active in multiple countries, so we did not limit the scope of our inquiries to just U.S. employees. If a company requires arbitration for sexual harassment claims in any nation, it is listed as "requires arbitration for sexual harassment." We did limit the scope of our inquiries to a company's employees. In other words, a company's relationship to contractors is not captured here.
Note: when a non-publicly traded company was on the public record as using forced arbitration or similarly coercive practice (i.e. overly broad NDAs, anti-mobility clauses (i.e. non-competes), it was our policy to include it in the database due to the impact investment community's natural interest in such companies.
- 1,8 Alexander J.S. Colvin, "The growing use of mandatory arbitration” Economic Policy Institute (April 6, 2018)
- 2 Jena McGregor, "Google and Facebook ended forced arbitration for sexual harassment claims. Why more companies could follow.” The Washington Post (November 12, 2018)
- 3 Alexander J.S. Colvin, "An Empirical Study of Employment Arbitration: Case Outcomes and Processes” Cornell University, ILR School (February 2011)
- 4 Dan Cassino and Yasemin Besen-Cassino, "Race, threat and workplace sexual harassment, 1997-2016” Gender, Work and Organization (June 2019)
- 5 News from EPI Press Release, "Women and African Americans are More Likely to be Subject to Mandatory Arbitration,” Economic Policy Institute (April 6, 2018)
- 6 Dr. Andrew Chamberlain, "Does Company Culture Pay Off? Analyzing Stock Performance of ‘Best Places to Work’ Companies,” Glassdoor (March 2015) // Dr. G. Kevin Spellman, "ESG Matters," Institutional Shareholder Services (Jan 2020)
- 7 Lynn Parramore, "$MeToo: The Economic Cost of Sexual Harassment,” Institute for Economic Thinking (January 2018)