Samuel D. Lack
As awareness of the prevalence and pervasiveness of workplace sexual harassment has grown in the United States, so too has the use of mandatory arbitration clauses in employment contracts, shepherding employee claims out of courtrooms and into private arbitration proceedings. Though private arbitration is often touted as cheaper and more efficient than traditional litigation, employees are significantly less likely to win in arbitration and, when they do, their awards are often much less.
Mandatory arbitration clauses have grown with the expansion of the Federal Arbitration Act (FAA), passed in 1926, and now cover over half of non-union workers in the United States. Despite evident inequities, Congress has done little to abate the expansion, and the federal court system has adopted a strong pro-arbitration jurisprudence. In recent years, the Supreme Court has effectively mandated that arbitration be individualized—to the severe detriment of sexual harassment victims amid what can be an already arduous claim process. In response, states and localities have passed laws that forbid or limit the use of mandatory arbitration clauses. These laws, however, are often preempted by the FAA and never take effect. The public has also pushed back against mandatory arbitration and has achieved real success. Many corporations and law firms are stopping the practice amid public pressure, walk-outs, and boycotts.
This Article will detail the prominent inequities present in mandatory arbitration, particularly in cases of sexual harassment and workplace discrimination. Then, it will advocate for: (1) judicial reinterpretation of the FAA and its savings clause to permit states to pass laws that restrict the use of mandatory arbitration, or, in the alternative (2) congressional action, namely the passage of the Ending Forced Arbitration of Sexual Harassment Act, which, combined with strategic public pressure on legislators and businesspeople, would lead to immediate relief for sexual harassment victims and signal larger arbitration reform on the horizon.