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Google, Facebook End Forced Arbitration After Employee Walkouts

In May, the U.S. Supreme Court ruled in Epic Systems Corp. v. Lewis that individual arbitration clauses in employment contracts are enforceable under the Federal Arbitration Act. Therefore, employers can require, as a condition of employment, employees to agree to resolve their employment law claims individually in arbitration rather than taking them to court or attempting to act collectively.

Individual arbitration is widely considered to be advantageous to employers for a number of reasons, so employers were expected to begin requiring it broadly.

Broad adoption of individual arbitration clauses could deeply change the enforcement of our employment laws. Instead of cases being brought in public through the Equal Employment Opportunity Commission or in court, employees' claims would be handled in a private forum where decisions don't create precedent.

It appears, however, that individual arbitration clauses will not be adopted universally. Several large technology companies have recently dropped the requirement, including Microsoft and Uber. Now, an employee walkout at Google and employee pressure at Facebook have persuaded those companies to drop the arbitration requirement, at least in sexual harassment and misconduct cases.

At Facebook, employees complained that private arbitration allowed sexual misconduct to remain secret, often letting abusers deny and continue their misbehavior. Facebook agreed to end private arbitration in these cases and to make other policy changes.

On Nov. 1 at Google, over 20,000 employees staged a walkout to protest the company's handling of sexual harassment and misconduct complaints. In one example, the company gave a senior executive a $90-million severance package even though he was found to be credibly accused of sexual harassment.

The search giant's CEO announced on Nov. 8 that individual arbitration will no longer be required in sexual harassment or sexual assault claims. Moreover, the company will overhaul its sexual harassment reporting process to be more transparent to employees and will begin docking employees on performance if they fail to complete sexual harassment training.

However, Google did not agree to make an internal report on harassment public or to include an employee representative on the board, as the employees had asked. And, the changes it did announce will not apply to vendors, contractors or temporary workers, although Google does require vendors to investigate sexual misconduct complaints by contractors.

The organizers behind the employee walkout, Google Walkout for Real Change, said the changes were encouraging but didn't go far enough.

"These forms of marginalization function together to police access to power and resources," reads a statement by the group. "Sexual harassment is the symptom, not the cause. If we want to end sexual harassment in the workplace, we must fix these structural imbalances of power."

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