[music]

Melissa Harris-Perry: You're listening to The Takeaway. I'm Melissa Harris-Perry. Last week, in a rare bipartisan move, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. Now I get it. This jargon-filled name might make it difficult to decipher just what it accomplishes, but this is a big deal. It's an important new piece of employment law. It grants crucial flexibility and power to employees. It means that when an employee brings sexual misconduct claims against a company, they can't be forced to use the company's arbitration process. Now they have the right to go to court.

One prominent advocate of the new law is former Fox News host, Gretchen Carlson. She's been working to ban forced arbitration since 2016, when she filed a sexual harassment lawsuit against a former Fox News CEO, the late Roger Ailes. The reason Carlson had to bring a lawsuit against Ailes personally was because a forced arbitration clause prevented her from being able to sue her employer.

Gretchen Carlson: Today I'm here on behalf of the millions of American workers who have been silenced for doing nothing wrong. Workers who simply wanted to go to their jobs every day and work in a safe environment.

Melissa Harris-Perry: For more on this, we spoke with David Noll, professor of law at Rutgers Law School.

David Noll: Most of us don't think about how legal disputes will be resolved until something goes wrong and we actually need to use the court system. When folks talk about forced arbitration, what they're talking about is companies taking advantage of that fact. They add fine print provisions to your employment contract, which say that if a dispute arises, instead of taking the dispute to court, the parties have to go to an arbitration process where the parties' legal claims will be resolved by a private arbitrator.

Melissa Harris-Perry: For whom does that private arbitrator work?

David Noll: The arbitrator is nominally independent of the parties, but it's generally selected by the defendant, the company that's being sued. It's also paid by the defendant. One of the concerns with arbitration is that even if the arbitrator attempts to be fair, this creates a bias because the arbitrator knows who's paying her paycheck, and that will create an incentive for the arbitrator to tend to rule in the company's favor.

Melissa Harris-Perry: Is this common? Should folks be looking back right now in their employment contracts to see if this forced arbitration line is potentially in there?

David Noll: These things are everywhere. If you pull out your employment contract, and you're not a member of a union and you're not a public sector employee, I virtually guarantee that you'll find an arbitration provision there. Millions and millions of people are subject to these clauses.

Melissa Harris-Perry: Is this across all layers and levels of employees, or do we typically see arbitration clauses in some kinds of contracts more than others?

David Noll: Everywhere. Employment contracts for law firms, employment contracts for accountants, all the way down to the folks working at Dollar General or the gas station. Employment lawyers figured out that they could do this in the late 1990s. Since then, the clauses have really spread like wildfire. There's a report by the Economic Policy Institute, which estimates that more than half of the US workforce is subject to an arbitration clause.

Companies will tell you that what's great about these things is they allow companies to customize the way that disputes are resolved and to maintain good relationships with their employees. When you actually dig into arbitration clauses, as I've done in some of my research, they're surprisingly similar. Virtually all of them say that employees have to proceed on their own. They don't have to contain a confidentiality provision, but they almost invariably do.

They're specifying the decision-maker. They're specifying your ability to seek certain kinds of support. Even though arbitration offers the possibility of customized proceedings, it's really an off-the-rack system that employers can adopt to essentially minimize their legal exposure.

Melissa Harris-Perry: This might also be important to understand. If one does in fact go through the arbitration process, does that remove your capacity to go through a standard legal process in the courts?

David Noll: If you go to arbitration, that is a substitute for going to court. Not only will the arbitrator's decision be final, but the grounds on which you can appeal that to a court are extremely narrow. It's essentially, the arbitrator was taking a bribe from one of the parties, or a defect of that level. Not only are we taking these cases and taking them out of the court system, but the arbitrator's decision is by design the final word.

Melissa Harris-Perry: Do we have clear evidence about the outcomes in arbitration versus the outcomes in a court of law? Do we know for certain that they typically go towards the employer, or is it simply that this bias is introduced because the employer is choosing and paying the arbitrator?

David Noll: The answer, to summarize a huge body of research, is that we think we know that arbitration is less favorable to people who are trying to sue than going to court. The difficulty with this whole body of research is that there's what social scientists call a selection effect. If you have somebody going to court and seeking to take advantage of the procedures that are available in court, the people who choose to do that are going to look different than the people who are subject to an arbitration clause, because people thinking about whether they can sue, they're going to say, "Can I get a lawyer? What are the procedures going to look like?" So on and so forth.

The people coming into the arbitration system and the people coming into the court system are different. That said, one thing we know for certain is that the procedures in arbitration look very different than the procedures in court. In court, you can bring a claim with other victims of harassment and abuse. You have a broad right to obtain evidence to support your claim. You're going to be able to go in front of a jury, if the case gets that far. Other folks have a First Amendment right to watch the proceedings so that the subject of the lawsuit isn't kept under wraps.

Typical arbitration clauses eliminate all of that. They say that the plaintiff has to go on their own. They say that they can't represent a class. They oftentimes say that the evidence generated in arbitration has to be kept confidential. Some aggressive arbitration clauses even say that the arbitrator's award has to be kept confidential. The concern with these one-sided procedures is that even if somebody is able to go through the entire arbitration process, the arbitration proceeding isn't really acting as a check or as a form of accountability for harassment and abuse. It just allows harassment and abuse to continue.

Melissa Harris-Perry: Remind us how arbitration factored into the Me Too movement?

David Noll: Sure. Arbitration exploded onto the scene during Me Too, because arbitration clauses were one of the contractual provisions that predators were using to suppress information about their wrongdoing. Perhaps the most famous example comes from Gretchen Carlson. Gretchen Carlson recorded evidence of her being harassed, but her employment contract not only contained a non-disclosure agreement that purported to bar her from talking about all kinds of stuff that happened at Fox, it also contained an arbitration clause which said that if she wanted to sue Fox, she had to go to private arbitration.

There were tons of stories like this. Gretchen Carlson is an especially prominent victim of harassment. As we learned during Me Too, sexual harassment is a problem that affects the entire economy. Arguably, it's even more severe in situations where you have low-paid employees and employees where there's really a huge power imbalance between the employee and the employer.

Melissa Harris-Perry: Okay, quick pause for a moment. Back with more on The Takeaway in just a minute.

[music]

We've been talking about new federal legislation that ends forced arbitration in cases of sexual misconduct. David Noll, professor of law at Rutgers Law School, is with us. He continue to explain how forced arbitration played out during the Me Too movement.

David Noll: The concern is that when you couple arbitration with these other kinds of contractual clauses that give all the power to the employer, you are creating what Jodi Kantor and Megan Twohey call a complicity machine. Ultimately, it's impossible to hold harassers to account. This web of contractual provisions makes it all but impossible to hold them accountable. The Me Too folks, folks involved with the Me Too movement said this is a problem because the promise of accountability is illusory. Even if somebody suffers horrifying abuse or harassment, there's no pathway open to them that allows them to go into court and to seek a remedy.

Melissa Harris-Perry: Help us to understand what this new measure does and just how big of a workplace reform this is?

David Noll: The new bill is very straightforward. What it says is that if you have a claim for sexual harassment or sexual abuse, at the victim's option, that case can go to court instead of being forced into arbitration. This is a huge deal because there are tens of thousands of these cases that currently will be sent to arbitration that are going to proceed in court now, if the victim so chooses.

Melissa Harris-Perry: What counts under that category?

David Noll: This is going to be one of the issues that lawyers are going to fight about. The law says that if you have a claim for sexual harassment or sexual abuse, as defined by federal law or by a similar state or tribal law, then that claim is exempt. One of the really interesting issues under this law is that states can potentially define sexual harassment and sexual abuse in a way that sweeps a little more broadly than federal law, and thereby allow more cases to get into court.

Traditionally, states haven't been able to do this because the Supreme Court has been extraordinarily aggressive about saying that federal law takes precedence over state law when it comes to whether cases are arbitrated or heard in court. The new bill is giving a little bit of power back to states to say, you get to say what's an appropriate subject for arbitration as opposed to the companies that write these agreements.

Melissa Harris-Perry: Is this legislative effort retroactive? Will it give back power to any folks who already went through those forced arbitrations?

David Noll: Lawyers are already fighting about this, but the basic answer is no. The way that the Act is written, it applies to existing employment contracts, but it seems to say that the dispute has to arise after the date that the bill became law. If you suppose that you signed an employment contract 10 years ago and then were subject to sexual harassment at work, if you previously tried to bring a claim surrounding that, it's going to be very difficult under this new law to get into court. However, if you haven't yet brought a claim, the language of the law, if the dispute hasn't arisen, then the law says, at the victim's election, you can take that into court and you can go to court with those cases.

Basically, what Congress is trying to do is saying that, "For new cases, we want you to be able to go forward in court, but we're not reopening all of those old cases." There'll be a lot of examination of what kinds of cases folks can bring now, now that potential plaintiffs can escape forced arbitration, and companies aren't going to be eager to give up the shield that they have from arbitration. Companies, for their part, will try to restrict the application of the law as narrowly as possible and say that it really only applies to genuinely new disputes and claims.

Melissa Harris-Perry: Now I do want to point out that on the one hand, this seems like an enormously important, and it probably is enormously important, and at the same time, it's not necessarily easy to sue one's employer in court. There are still massive asymmetries often between an employee and especially large companies.

David Noll: People talk about this as if it's going to remove all the barriers to go into court. The fact of the matter is that there's all kinds of reasons, other than legal process, why people don't sue their employers. There's fear of retaliation. You have to find a lawyer. You have to find money for litigation. For many folks who are victims of job discrimination, taking a case to court is almost its own injury.

The process is so complicated and so demanding at a personal level, that people decide just to move on to the next thing rather than seeking a remedy. It makes it somewhat easier to have your case heard in front of an impartial adjudicator, but by no means does this eliminate all of the barriers to court for victims of job discrimination.

Melissa Harris-Perry: What might be some of the potential structures that could be erected that would in fact, at least level that field a bit and reduce some of those asymmetries, making it more possible for, particularly those who are in this circumstance of not only enduring harassment, enduring abuse, but also that fear of what could happen when you bring forward these kinds of claims?

David Noll: The traditional answer that we had for decades and decades was that that's why you have a union. Employees have a union to represent their interests. Often, one of the things that unions do is provide legal services, legal advice to their members. An interesting twist of this is that unions will often negotiate an arbitration process for resolving workplace disputes, but it'll look nothing like these forced arbitration provisions.

Melissa Harris-Perry: David Noel is a professor of law at Rutgers Law School. David, thanks for joining us on The Takeaway.

David Noll: Great to be here with you.

[music]

Copyright © 2022 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.