Forced Arbitration Ban Paving the Way for Safer Workplaces
When an 87-year-old former nun with memory loss was sexually assaulted in her nursing home, her nieces tried to bring a lawsuit against the facility, but they had no right to sue. Why? A forced arbitration clause in the company’s contract legally barred any resident from bringing a civil suit for any reason and at any time in the future.
Legal advocates estimate that as many as 90 percent of large nursing-home chains in the U.S. now include arbitration agreements in their admissions contracts. And because of this, our most vulnerable citizens are at risk for neglect, assault, and abuse with no legal recourse. In addition, American companies that include forced arbitration clauses and class action waivers in employment contracts increased to nearly 50 percent in 2018.
Groundbreaking bipartisan bill bans forced arbitration
But consumers – and the federal government – are finally pushing back against this erosion of our Constitutional rights. In March, President Joe Biden signed a groundbreaking bipartisan bill that banned employers from forcing workers to resolve sexual assault and harassment complaints using arbitration (usually from an arbitrator chosen by the company).
“There will be cases where victims want their claims resolved in private, but some survivors will want their day in court, and that should be their choice and nobody else’s choice,” Biden said at the signing on March 3.
This law requires that prospective plaintiffs, not the defendants, choose whether to litigate their sexual assault or harassment claims in court or through arbitration. Individuals are no longer forced into arbitration even if they previously signed an agreement limiting their legal remedies to arbitration only. Also, employees may choose to bring suit individually or through a class-action lawsuit, again regardless of whether the individual signed an agreement waiving their right to collective legal action.
How did we get here? Why legal reform was necessary
As a result of the #MeToo movement in 2017, lawmakers sought to change legislation around sexual assault and sexual harassment in the workplace. The Equal Employment Opportunity Commission estimates that anywhere from 25 percent to 85 percent of women have experienced sexual harassment in the workplace. The number is likely much higher because the Commission says up to 90 percent of abuse incidents go unreported. Many employees fear retaliation if they speak out, including losing their jobs. Because of the way forced arbitration contracts were constructed, harassers faced no real consequences which opened the door for repeated abuse.
In one famous example, former Fox News anchor Gretchen Carlson sued Fox News after she was fired for allegedly refusing sexual advances from company Chairman Roger Ailes. Fox tried to have her claims adjudicated in mandatory closed-door arbitration instead of court, effectively requiring that the details of her case remain hidden from the public. After Carlson came forward, many more women accused Roger Ailes of sexual harassment.
What’s next for forced arbitration?
The fight for your legal rights isn’t over! Two weeks after President Biden signed the bipartisan bill into law that banned forced arbitration in sexual harassment and assault cases, the U.S. House passed the Forced Arbitration Injustice Repeal (“FAIR”) Act of 2022 (H.R. 963). Whether it passes the Senate and gets signed into law remains to be seen but it would put the future of many, if not all, arbitration agreements in jeopardy.
The bad news? Forced arbitration clauses are still everywhere. Be aware that they may, if they haven’t already, pop up in contracts with credit cards, cell phones, bank accounts, student loans, cable and internet providers, and more. Fair Arbitration Now is a resource that helps consumers determine whether certain industries include forced arbitration clauses in their contracts. If you’ve signed a forced arbitration agreement and want to know your rights, or wish to discuss specifics of your case in a free consultation with an experienced Tucson personal injury lawyer, please contact us today.