Banning workers from suing their employer hurts people of color and women most

Last week, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which will block enforcement of arbitration requirements for workers alleging sexual harassment or assault. Arbitration is the process of handling disputes outside of the court system — forced arbitration prohibits workers from suing their employer altogether.

This is an important outcome for the #MeToo movement and has the potential to reach many workers and employment claims, depending on how broadly or narrowly it is interpreted.

In a fair and just country, corporations are held accountable in the courts if their irresponsible behavior harms people. However, like many policies, the communities most impacted by forced arbitration are historically marginalized groups. Indeed, forced arbitration has a disproportionate impact on low-income Americans and Black and brown women, when they are the victims of discrimination. Their abuse goes beyond the general adverse impacts of forced arbitration, noted in a new report by the Center for Progressive Reform.

What is often overlooked is how this process impacts low-income individuals, people of color and women. This lack of information led us to publish the first report to examine the legal effects of forced arbitration on marginalized communities and vulnerable groups, like residents of nursing homes.

All workers are disadvantaged by forced arbitration, but low-wage workers are more likely to be victimized by it. For example, forced arbitration is more common in low-wage industries and workplaces, even though low-wage workers — and particularly those of color — are more likely to be the victims of wage theft. According to one estimate, some 17 million workers earning less than $13 per hour have been forced into arbitration of their wage claims.  

Not surprisingly, low-wage workers experiencing wage theft are more likely to be women and people of color and to have received less education. Overall, low-income people are less able than higher-wage Americans to absorb the financial impacts of unaccountable, irresponsible or illegal corporate behavior. Even the smallest loss can dramatically affect a family’s financial stability. And 80 percent of the private sector, non-union workforce is projected to be subject to mandatory arbitration by 2024.

Passage of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, act would also help build momentum for passing the Forced Arbitration Injustice Repeal (FAIR) Act, which aims to broadly end arbitration agreements for both consumers and employees. This may provide relief for marginalized groups who experience other forms of harm, in addition to workers who experience sex-based harassment. 

Under the current state of the law, there is still no remedy for racial harassment, discrimination, wage theft and other civil rights claims subject to forced arbitration. A process that provides no access to court, no public record, as well as no class claims for systemic harms is inherently unfair and systematically puts historically marginalized groups at a disadvantage. Most notably, women and people of color are at greater risk of unconscious discrimination because almost all arbitrators are white men. These groups are also more likely to be the subject of workplace discrimination than their white counterparts. 

In addition, women find it far more difficult to prove a pattern of sexual harassment and other types of abuse under forced arbitration because the process is secretive. As a result, arbitrators do not have to justify their decisions as consistent with prior cases, which prevents other workers or consumers from using a favorable award as precedent in their own cases. This also prevents the development of the law to fit new circumstances and information, which in turn, blinds other victims or people who could force change to systematic patterns of abuse.

In the absence of broad legislation, protecting various types of abuses, socially responsible companies can act. For example, some companies like Facebook, Google and Lyft have ended forced arbitration after facing pressure from employees. More companies need to go in this direction if they say they are committed to race and gender justice.

Forced arbitration is yet another example of historic oppression of Black communities and other marginalized groups. It deserves attention this month and all year long — and legislative support and action. Congress must end forced arbitration and restore the rights of Americans and courts to hold businesses accountable for illegal and irresponsible actions that harm people and disproportionately harm historically marginalized communities. The time to do so is now.

M. Isabelle Chaudry is senior policy analyst at the Center for Progressive Reform and an expert in workers’ legal rights. Chaudry is co-author of the recent report, “Private Courts, Biased Outcomes.”

Jamillah Bowman Williams is an associate professor of law at Georgetown University and Workers’ Rights Institute’s faculty director.