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Tech companies like Google are giving workers the right to take sexual harassment claims to court — but employees are calling for more

Employees and labor activists say they want to see an end to forced arbitration in all cases — not just for sexual harassment — and for all workers.

A man on a bike outside Google headquarters in Mountain View
Google employees staged a walkout to protest the company’s actions on sexual harassment.
Mason Trinca / Getty

Amid increasing public scrutiny, many major tech companies are reconsidering a practice that bars workers from taking their employer to court over workplace issues such as sexual harassment.

In the past two weeks alone, Google, Facebook, Airbnb, eBay and Square all announced they’d end forced arbitration for cases of sexual harassment. Forced arbitration is an agreement that requires employees to settle disputes in-house rather than in the courts,

The announcement is good news for tech employees because arbitration generally works in favor of employers and tends to involve lower payouts than traditional court cases.

At Google, the immediate cause behind the change was an employee-led collective action: Thousands of employees walked out of work earlier this month, demanding better workplace policies for preventing sexual harassment and listing an end to forced arbitration as their primary demand. Shortly after, Google management ended the practice in some cases. Other major tech companies quickly followed suit as the Google story grabbed mainstream attention.

But while labor advocates are celebrating the victory, some — including organizers of the walkout — are calling on Google and other tech companies to end forced arbitration more broadly.

They say tech companies have been narrow in their approach to limiting forced arbitration, often banning it only in cases of sexual harassment and assault. Many employees are demanding that the protection apply to other cases of workplace grievances, such as discrimination, as well.

One of several employees who organized the Google Walkout, Tanuja Gupta, wrote in an email to Recode that the company ending forced arbitration in cases of sexual harassment was a “good first step,” but ultimately not enough.

“The tepid policy change shows that leadership still does not understand how closely discrimination correlates to harassment,” wrote Gupta. “In fact, the cause for harassment is often discrimination itself, so we need to address the underlying power structure and pull it up from the roots.”

A spokesperson for Google had no comment about making arbitration optional — instead of required — for other workplace issues such as discrimination.

Companies that abandoned forced arbitration in cases of sexual harassment this month join a number of other tech companies that have already stopped the policy — including Microsoft and Uber — often in response to the public airing of severe sexual harassment abuses at those companies. Twitter, Salesforce and Amazon, among others, never had forced arbitration for such cases in the first place. Apple also ended forced arbitration for cases of sexual harassment and discrimination this year but would not confirm the date with Recode.

The practice of forced arbitration is appealing to employers, who are always looking for ways to limit their liability. But they also argue arbitration can be beneficial for workers because the process is faster and can allow employees to retain privacy — if they choose.

Google, for example, says the company has never required confidentiality in the arbitration process. The company’s CEO, Sundar Pichai, wrote that “arbitration still may be the best path for a number of reasons,” even as the company decided to give employees the choice to opt out in cases of sexual harassment and assault.

Another issue at tech companies that have ended some forms of forced arbitration: The new protections don’t always apply equally to all workers.

At Google, a significant chunk of workers — from shuttle bus drivers to coders — are contracted by third-party firms. These workers make up more than 50 percent of Google’s workforce, according to a recent Bloomberg report, and they’re not covered by the company’s new protections against forced arbitration. Instead, the third-party supplier firms who employ these workers make those decisions.

Google has a Supplier Code of Conduct that requires Google suppliers to “demonstrate a commitment to identify, measure, and improve a culture of diversity and inclusion through all aspects of workplace management,” and the company says it audits these suppliers regularly. A spokesperson for Google could not disclose how many suppliers include forced arbitration for sexual assault and harassment as part of their contract with workers.

Forced arbitration nationwide is still growing

These moves to end forced arbitration by Google and others are welcomed by activists, but they’re not likely to put a dent in the trend toward the practice nationwide.

“It’s a wonderful result of workers engaging in collective action, demanding this kind of change,” Celine McNicholas, director of labor law and policy at the Economic Policy Institute, told Recode. “These announcements are encouraging, but they do not necessarily represent more than good public relations.”

McNicholas is skeptical that the policy changes will translate into behavior changes inside these companies. She also noted that the actions of a handful of marquee tech companies aren’t going to stem forced arbitration’s U.S. growth across other industries.

In six years, the share of U.S. private-sector, non-union workplaces with mandatory arbitration could rise from 54 percent to 80 percent, according to Economic Policy Institute estimates based on current growth rates.

That’s in part due to a Supreme Court decision this spring in favor of forced arbitration agreements containing class and collective action waivers, meaning workers have to file claims individually rather than as part of a group. The case solidified a series of Supreme Court cases, dating back to 1991, that have upheld companies’ ability to enforce the procedure. These cases have made it so the use of forced arbitration clauses can grow unhindered.

From 1991 to 2017, the share of U.S. workers subject to forced arbitration rose from 2 percent to 56 percent, according to a report by the Economic Policy Institute. That will grow as more workplaces adopt the practice.

There has been some resistance from the left to the rise of forced arbitration. A recent bill introduced by House Democrats would ban businesses from requiring forced arbitration altogether and could help stem the tide, but it is not expected to be approved by the Republican-controlled Senate.

The information industry, of which internet and tech companies are a part, has one of the highest rates of mandatory arbitration of any industry at 59 percent, according to the Economic Policy Institute. Additionally, California, tech’s capital, has some of the highest rates in the nation, with 67.4 percent of workplaces in the state adopting the policy.

Finally, a number of companies that ended forced arbitration in sexual harassment cases still require employees to waive their right to class- and collective-action lawsuits. That means employees can sue, but they have to take on that financial burden themselves.

Ultimately, many labor advocates say they’re happy tech workers have helped expose the problems with forced arbitration and limited its scope in some cases — even as they wish to see broader change on the issue.

“I’m glad sexual harassment is getting that visibility,” Terri Gerstein, director of the state and local enforcement project at Harvard Law School Labor and Worklife Program, told Recode. “I want other workplace abuses to get this visibility, too.”

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