clock menu more-arrow no yes mobile

Filed under:

Gretchen Carlson on how forced arbitration allows companies to protect harassers

“Very early on, I realized that it was a pervasive epidemic.”

Gretchen Carlson attends SiriusXM’s “Leading Ladies With Gretchen Carlson” hosted by SiriusXM host Randi Zuckerberg at the SiriusXM studios in New York City on December 12, 2017.
Astrid Stawiarz/Getty Images for SiriusXM

When victims of sexual harassment in the workplace gather the courage to come forward, many learn troubling news: They are legally forbidden to sue their employer.

Mandatory arbitration clauses mean that many — if not most — cases of sexual harassment are dealt with behind closed doors. Instead of making their way to court, they are settled by arbitrators, independent professionals who are selected to resolve disputes. It’s estimated that more than 60 million Americans have signed such arbitration clauses. Today, the Supreme Court ruled that it’s legal for companies to require employees to sign arbitration clauses in their employment contracts, making it impossible for these workers to bring class action lawsuits against employers over labor disputes.

In July 2016, Gretchen Carlson sued Fox News chair and CEO Roger Ailes for sexual harassment, a move that eventually won her $20 million and encouraged dozens of other Fox employees to come forward. In the end, Ailes was forced to step down. Now Carlson is focusing her efforts on ending forced arbitration, which she signed in her own contract with Fox News, and helping women speak publicly about harassment. She’s not allowed to explain how her lawyers managed to get around the clause, and says that kind of secrecy is part of the problem.

In the documentary series America Divided, which aired earlier this month on Epix, Carlson makes clear that her goal is getting a federal law passed that would eliminate mandatory arbitration in harassment for gender discrimination cases. One has been introduced by a bipartisan group of lawmakers, including Sens. Lindsey Graham of South Carolina and Kirsten Gillibrand of New York.

Carlson is not alone: Susan Fowler, the former Uber engineer who came out publicly against her employer alleging sexual harassment, is also working with members of the California State Assembly to pass legislation to eliminate forced arbitration, which prevented Fowler from coming forward about sexual harassment at Uber until after she quit.

“Very early on, I realized that it was a pervasive epidemic,” Carlson says of mandatory arbitration.

”When I filed my suit, I had no idea how pervasive it was across every socioeconomic line and every profession, from Smalltown, USA, all the way to Washington, DC.”

I spoke to Carlson about what happens when employees are forced to settle disputes outside of courts and how companies benefit, among other subjects. Our conversation, which occurred before the Supreme Court ruling about individual arbitration, has been condensed and edited for clarity.

Hope Reese

Can you briefly explain what arbitration clauses are? Why can they be harmful to victims of harassment?

Gretchen Carlson

Most people have no idea that they have them in their employment contracts. They’ve doubled since the year 2000; 60 million Americans have them now.

What it does is it actually take away your Seventh Amendment constitutional right to an open jury process if you find yourself in any kind of a dispute with your employer. Most people start jobs never expecting to get into any kind of a dispute. I know I didn’t. But then when you find out you have one of these, it means that settling that case is going to be secret.

Hope Reese

Can you walk me through how an arbitration clause might shape how a company handles a sexual harassment claim, and how it affects the outcome?

Gretchen Carlson

Let’s say you’re being harassed. You go to complain to HR. The company wipes their forehead with their hand and goes, “Phew, nobody will ever know about this,” because of these clauses. Then you get thrown into forced arbitration where, oftentimes, the company picks your arbitrator for you. You don’t get the same number of witnesses and depositions [as you would in court]. Rarely does the employee win — only 20 percent of the time. And there are no appeals.

Then you could get fired because once you bring a harassment or discrimination claim, companies rarely keep you on. So now you’re out of a job and can’t ever tell anyone why you had to leave. Also, with arbitration, because it’s secret, the perpetrator oftentimes gets to stay on the job — again, because no one knows the person has been accused — to harass again.

Hope Reese

What’s the benefit for a victim of harassment in going to court — financial? Psychological?

Gretchen Carlson

Well, first and foremost, it gives you the opportunity, if you choose, to make your case known. It doesn’t mean that you’re going to go through the whole court process, because that can take years. But it’s the idea that you’re not automatically shoved into secrecy. It doesn’t just help the victim — it might stop the harassment. Because once the perpetrators know that it won’t be shoved into secrecy, they might not harass anymore. It changes the whole dynamic within the workplace.

And it gives voice to more than just one person. The arbitration process means that nobody else in the company knows this behavior might be going on. When things are technically more out in the open, more people don’t feel alone. So you find strength in numbers.

The whole point of this movement is to try and make this more of a public discussion within the workplace. We should be finding out ways to talk about this more openly. The more that a person has the ability to make something transparent, I think, the greater the possibility that people stop doing it.

Hope Reese

How can an employee find out if they signed an arbitration clause?

Gretchen Carlson

Contracts can generally be heavy and hard to get through. Often the contract will include, usually at the end, how disputes are resolved. If you have an arbitration clause, it’ll say all disputes will be governed by a list of different groups of arbitrators, as opposed to the courts of, say, New York or whatever state you’re in.

But sometimes it’s in the really fine print, so people have no clue that they even have these things. And when they’re reading through a long contract, unless they’re getting legal help with it, they don’t know what they’re signing. Even if you identify it and bring up to your prospective employer that you don’t want it to be in there, they’ll just move on to the next person.

Hope Reese

You had signed a forced arbitration clause, yet you were still able to win a $20 million lawsuit when you came forward about Roger Ailes harassing you. How did you get around it?

Gretchen Carlson

I can’t get into the specifics of what I had or didn’t have. All I can say is that my attorneys came up with a very creative strategy to allow my case to become public, which was incredibly important. Because otherwise you wouldn’t know why “time’s up” — we’d have known nothing. It was because of that that we’re positioned where we are now.

Hope Reese

Did signing the forced arbitration clause affect your decision or discourage you in any way from coming forward?

Gretchen Carlson

Again, I can’t answer specifics, which is part of the problem about how we resolve issues. We resolve them by muzzling people. But I will say that generally, it’s a dark day for any employee to find out they have an arbitration clause. Especially if they have a dispute, because they’re realizing that they no longer have that right to an open jury process.

Hope Reese

What reasons do companies give for using forced arbitration clauses? That not having them would trigger a flood of lawsuits? That it’s cheaper than courtroom fights?

Gretchen Carlson

Both. Because of the way the system currently operates, where the employee rarely wins, I’m sure that it’s a benefit financially [to the companies]. And yes, I guess there is a perception that these lawsuits would be more public. I think it’s beneficial for corporations to have the outside world not know about their problems.

Hope Reese

Is there any downside to getting rid of forced arbitration? Do companies make any valid points in defending these clauses?

Gretchen Carlson

Not in harassment cases, because [arbitration] was never intended for harassment or discrimination cases in the workplace. The Supreme Court initially ruled on this 20 years ago — it was specifically [meant] to unclog the court system that had become way too overloaded with small-business disputes. But [it wasn’t meant] for human rights violations. That’s actually how my case was made public — it was a human rights law that happened to be on the books in New York. So arbitration is never intended for allegations about human decency; it’s just been filtered into being used in that way.

For example, the bill introduced in December in the House and Senate is very narrow in the sense that it only gives [employees] a choice for harassment or gender discrimination cases to not go to arbitration. It doesn’t say for every dispute. We did that on purpose because we wanted to make it bipartisan, and we knew that we would never get both parties to agree, at least right now, to eradicate all arbitration. I want to make sure that it actually had a chance of passing.

Hope Reese

So, talking specifically about Congress, women make up only 20 percent of the legislative body. How can we pass bills that really support women when many members of Congress can’t relate to these situations?

Gretchen Carlson

I started the All in Together leadership initiative as a way to encourage more women not only to run for office but to call their members of Congress and let their voices be heard on issues that are important to them. The research also shows that women don’t do that — not only are we not equally represented in Congress, but we don’t take actions to make sure that our voices are heard.

My hope is that during this whole #MeToo movement we’re experiencing that women are feeling empowered on everything. Not just this issue, but to also know that their voice does matter.

Secondarily, we’ve seen a huge rush of women deciding to run for office in 2018. In my own town [of Greenwich, Connecticut], we had a local election in November for city council, and many women who had never run before decided to run. And they all won. So I think that alone is sort of the microcosm of what we’re seeing happening.

And here’s the other thing: Women are socialized into thinking that we’ll never win, so we don’t run. We need to empower women to look at it completely differently.

Hope Reese

So few women are able to actually win these suits — how can they face the challenge to go up against a corporation, say, a big tech company that has deep pockets and can pay for lawyers?

Gretchen Carlson

It’s why a lot of times it doesn’t happen, for financial reasons. There are attorneys that will take cases on contingency, which is usually the only way that anyone can afford to do it. You pay a small fee upfront, and then if you win, a percentage of your settlement goes to the lawyers — usually a pretty big chunk of it. But that’s the only way that people can afford to do this.

This is why you’re seeing the movement and the outcry that we’ve been seeing — because there is this injustice. It’s why companies have arbitration clauses, so that nobody ever finds out their dirty laundry.

I’d just like to call out the fact that Microsoft, on their own, has decided to take arbitration clauses out of their contracts. And they did that after we introduced our bill in December. I’m hoping more companies will follow suit. But so far, not a lot have jumped in for it.

Hope Reese is a journalist in Louisville, Kentucky. Her writing has appeared in the Atlantic, the Boston Globe, the Chicago Tribune, Playboy, Vox, and other publications. Find her on Twitter @hope_reese.

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.