On Tuesday, Microsoft announced that it will no longer require employees to resolve sexual-harassment claims through private arbitration, one of the first signs that the legal contracts long used to hide workplace misconduct may be starting to crumble under the pressure of the #MeToo movement.
Roughly 60 million Americans are subject to mandatory arbitration agreements, generally as part of employment contracts they signed when they were hired. The agreements compel employees to address claims through a private arbiter rather than in court, which can keep victims in the dark about prior harassment claims, shield serial abusers, and hide sexual harassment from public scrutiny.
Microsoft says it made the change as it prepared to throw its support behind a bill proposed by Senators Lindsey Graham (R-South Carolina) and Kirsten Gillibrand (D-New York) that would make forced arbitration in harassment cases unenforceable under federal law. “After returning from Washington to Seattle, we also reflected on a second aspect of the issue. We asked ourselves about our own practices and whether we should change any of them,” Brad Smith, Microsoft’s president and chief legal officer wrote on the company’s corporate blog.
Forced arbitration agreements are popular in Silicon Valley, where employers often impose strict confidentiality provisions that keep employment issues private. Now the question is whether other big players will follow Microsoft’s lead.
Amazon says it doesn’t ask employees to sign mandatory arbitration agreements. A Facebook spokesperson says the company is looking into the Graham-Gillibrand proposal and referred to the company"s harassment policy. Uber, Google, and Apple did not immediately respond to questions from WIRED about arbitration agreements for sexual harassment or their support for the new bill. Uber’s employment contracts include a binding arbitration clause, but the company now gives employees 30 days to opt-out of that clause, Uber told WIRED in June.
Confidentiality provisions, including nondisclosure agreements (NDAs) and non-disparagement clauses, came under fire after news reports revealed how these contracts were used to shield serial abusers like Harvey Weinstein, Bill O’Reilly, and Roger Ailes, by silencing victims.
Earlier this month, experts told WIRED that reforming these contracts would help pierce the secrecy around sexual harassment. Both former Uber engineer Susan Fowler and former Fox News host Gretchen Carlson have identified forced arbitration clauses as legal impediments for harassment victims. Fowler, whose harassment allegations led to the ouster of former Uber CEO Travis Kalanick, filed a friend-of-the-court brief in August in support of an ongoing Supreme Court case to determine whether forced arbitration violates federal law. Carlson, who sued Ailes for sexual harassment, joined Graham and Gillibrand at a press conference introducing their bill earlier this month.
Microsoft’s public stand against secrecy follows a Bloomberg story last week about a rape claim from a female Microsoft intern, which came to light as part of a two-year-old class-action lawsuit against Microsoft for gender discrimination.
The rape allegation from the Microsoft intern emerged in recently unsealed documents in the class action suit. According to Bloomberg, the intern was required to keep working alongside her alleged rapist while the company investigated her claim.
The policy change may be relatively simpler to implement at Microsoft, which typically does not include arbitration agreements in its employment contracts. In his blog post, Smith said a review found that only “a small segment” of its 125,000 employees “have contractual clauses requiring pre-dispute arbitration for harassment claims in employment agreements.” That covers a few hundred people. A Microsoft spokesperson says the company also will not compel arbitration related to gender discrimination, which is included in the proposed legislation.
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