Big companies love forcing employees to arbitrate. To many corporate lawyers, pulling an arbitration agreement out of their back pocket is their ultimate “gotcha” move. There will be an ugly employment case where the company realistically stands to lose a couple million dollars. Not only that, but the lawsuit could be a disaster for the company’s brand and reputation. And at the last minute, some smug BIGLAW attorney shows up with a click-wrap arbitration agreement that the employee “signed” on their first day or work during onboarding. Was arbitration ever supposed to be used this way? No, but that’s a story for another day. Suffice to say that big companies and their BIGLAW cronies love arbitration. And why not? Arbitration removes the threat of a big jury verdict. Arbitration allows the company to vote on who the arbitrator is — shocking that big companies normally want former BIGLAW attorneys to serve as arbitrators in their cases. And arbitration – unlike court – is much easier to keep quiet and confidential.
Law Bans Forced Arbitration of Sexual Harassment &
Sexual Assault Claims
So it should come as no surprise that big companies want to force sexual harassment and sexual assault cases into arbitration. But a relatively new federal law bans forced arbitration of those cases. In March of 2022, the President signed into effect the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. The Act allows a person alleging sexual harassment or sexual assault to proceed in court — even in the face of an arbitration agreement. But the Act does not apply to claims that arose prior to its passage.
Naturally, corporate America and their BIGLAW allies have fought to limit the scope and the power of the Act. But so far, at least in some jurisdictions, those efforts have failed. A recent case out of the United States District Court for the Southern District of New York provide a good overview. In one case, Teyo Johnson sued his former employer Everyrealm on a variety of claims, including discrimination and sexual harassment. Naturally, the company argued that all of Johnson’s claims except for the sexual harassment claim must be sent to arbitration.
To any reasonable person, that would have made no sense. Think about it: Johnson would have been forced to pursue two separate cases: one in court and one in arbitration. BIGLAW loves that because it translates to more billable hours. And corporate America loves that because it complicates things, creates more work, makes the case less attractive, and basically creates a disincentive for the employee to pursue legal action.
Fortunately, the Court disagreed with the Company and ruled that the entire case could be litigated in court. Basically, the judge reasoned that the Act says any “case” involving sexual harassment or sexual assault cannot be forced into arbitration. The Act does not say that only the specific claims of sexual assault are allowed to escape arbitration. The entire case is allowed to proceed in court. In my view, that is the correct and obvious interpretation of the Act. It is also a great step in the right direction. But that is just one judge in New York Federal Court. I anticipate that corporate America and corporate lawyers will continue trying to push sexual harassment and sexual assault cases into arbitration — in spite of clear federal law to the contrary.
Practical Guidance
As an employee (or former employee) dealing with sexual harassment or sexual assault, it is critically important that you know and understand your rights.
Many employees who are confronting workplace harassment issues have far too much faith in their employers. In my view, most companies do not handle sexual harassment and sexual assault complaints the right way. I have seen dozens if not hundreds of these situations. Complaints to HR frequently go ignored. Companies make light of the offending behavior. Companies protect certain perpetrators because they generate lots of revenue or are friends with higher-ranking employees / executives. And, in some instances, employees who come forward to report sexual harassment or sexual assault are retaliated against.
If you are dealing with sexual harassment at work or recently have separated from a company because of sexual harassment, you should contact an attorney. And you absolutely should speak with an attorney before signing any documents that could impact your rights.
About Attorney Jonathan Pollard
Pollard PLLC is a law firm based in Fort Lauderdale, Florida that represents employees in a variety of employment cases. The Firm’s founder Jonathan Pollard has appeared in or on The New York Times, Wall Street Journal, Bloomberg, PBS News Hour, NPR, The Guardian, The Times (London), and more. He has 75,000+ followers on LinkedIn where he frequently posts his commentary on law, business, and life. The Firm can be reached at 954-332-2380.
