On the Connection Between Workplace Harassment and Compulsory Arbitration
The New York Times reported on Tuesday on women who gave congressional testimony, recounting how compelled arbitration had prevented from from going public with allegations of workplace sexual misconduct. Their testimony came in the context of Congress’s consideration of legislation that would ban mandatory arbitration of workplace sexual assault and harassment. I wish I had more faith in Congress’s ability to pass targeted legislation outside of the context of omnibus, must-pass spending bills.
Radin distinguishes between the realm of contracts we mostly teach about in the first-year contracts course, which involve negotiations and mutual consent, and modern contracting, which involves form contracts and do not provide an opportunity for the offeree to give meaningful consent to the terms. Radin speaks of the former as World A contracts, which we can think of as contracts that entail mutual assent. But most contracts exist in World B, the world of boilerplate that I was referencing, far too cryptically, in my Tweet from yesterday.
For example, one women who testified was 23-years-old when she was offered $60,000/year to work for a company owned by a family friend. That very family friend then commenced a campaign of harassing e-mails and later sexually assaulted her. Upon beginning employment, she had signed papers that required arbitration of all claims relating to her employment as well as strict confidentiality with respect to such claims. The woman had no idea of what what she was signing, focusing more on the prospects of starting a career. She did not give meaningful assent to the terms that bound her, both because she likely was not given adequate time to read and consider them, and because the terms were non-negotiable. She would have needed legal advice to understand them, but given her market position, even a lawyer would not have been able to help her negotiate more favorable terms. In such circumstances, which are the usual circumstances for almost all of us in almost all contractual settings, signing and hoping for the best is the rational thing to do.
Sarah Parshall Perry, a legal fellow at the Heritage Foundation, testified against the legislation, while likely means that it is doomed in the Senate. She argued that the problem is not arbitration but confidentiality agreements. It’s really both. Arbitration can be a way to protect bad actors from negative publicity and the binding nature of precedential decisions. Ms. Parshall Perry is quoted in the Times as saying, “Curtailing access to arbitration would injure, in the end, the very people that Congress has sought for nearly a century to protect.” Statements like this give me fits.
Ms. Parshall Perry’s statement is both misleading and condescending. It is misleading because nobody is talking about curtailing access to arbitration. They are talking about restoring access to courts. Parties can still choose arbitration when it suits their needs. Consequently, Ms Parshall Perry’s statement is also condescending, because it assumes that plaintiffs are incapable of determining what is in their best interests. Arbitration has many advantages — it is faster and cheaper, and in most situations, a plaintiff is likely to get at least some sort of relief through arbitration, even on claims that might get dismissed for non-substantive reasons in courts. Plaintiffs aren’t idiots. They should be free to choose, in consultation with their legal counsel, the venue that best suits their needs.