Microsoft ends forced arbitration for sexual harassment cases

Microsoft’s announcement that it will allow employees to sue the company for sexual harassment has handed the #MeToo campaign an important victory after months of revelations about predatory behavior and assault by powerful men in media, entertainment and technology, advocates said.

The software giant said this week it was scrapping employment agreements that require workers to settle harassment complaints in private and called itself the first Fortune 100 company to back a bill before Congress that would ban companies from forcing such disputes into closed-door arbitration.

“We concluded that if we were to advocate for legislation ending arbitration requirements for sexual harassment, we should not have a contractual requirement for our own employees that would obligate them to arbitrate sexual harassment claims,” Brad Smith, the president and chief legal officer, said in a statement. “For this reason, effective immediately, we are waiving the contractual requirement for arbitration of sexual harassment claims in our own arbitration agreements for the limited number of employees who have this requirement.”

More than half of American workers have signed away their right to sue their employer for sexual harassment, gender or racial discrimination, according to a recent study from the Economic Policy Institute in Washington.

Employee advocates say such contracts shield predators and perpetuate the problem. Some expressed hope Microsoft’s decision, while affecting only a small number of its employees, could push other firms to drop their secrecy rules.

“Microsoft just jumped way ahead,” said Ira Rheingold, executive director of the National Association of Consumer Advocates, which opposes legal agreements that silence whistleblowers. “This will put pressure on other corporations to do just that.”

In his statement, Smith said Microsoft supported the bipartisan bill introduced earlier this month that would outlaw mandatory arbitration in sexual harassment cases and void existing employment contracts that demanded it. Such arrangements allow accusations to stay secret, and firms have a say in who decides the cases, advocates say.

Sen. Lindsey Graham, R-S.C., one of the bill’s conservative sponsors, persuaded Microsoft to support the bill, Smith wrote.

The two happened to have a meeting scheduled for Dec. 6, the same day Graham unveiled the legislation on Capitol Hill with Sen. Kirsten Gillibrand, D-N.Y., a source close to Graham said. They were supposed to discuss cybersecurity and immigration, but, Smith wrote, Graham “followed those topics with a compelling appeal that we consider this new legislation.”

Graham had asked Smith: Where does Microsoft stand on this?

About two weeks later, he got the answer.

For Microsoft, the decision to update its company policy was more of a symbolic move than a cultural upheaval. The firm said a small fraction of its workforce – “hundreds of employees” out of 125,000 worldwide – were bound by similar contracts.

Private arbitration burst into the spotlight last year after former Fox News anchor Gretchen Carlson sued her longtime boss, Roger Ailes, for trying to derail her career after she rejected his sexual advances.

The lawsuit set off a national discussion about sexual misconduct in the workplace and drew attention to the use of legal agreements to hush victims.

Rheingold, the NACA executive, said support from the business world is critical to quashing the practice.

“We have little faith that Congress is going to pass any bills right now that will protect victims of sexual harassment,” he said. “The one way we will see change is through demands for corporations to take responsibility.”

The U.S. Chamber of Commerce, the leading business lobby, has not taken a stand on the bill.

“We’re taking a look at this important legislation and discussing it with our members,” a spokesperson said in an email Wednesday. “We hope to have an opportunity soon to talk with lawmakers so we better understand it. The Chamber will work with anyone to make sure appropriate steps are taken to combat sexual harassment.”

On Twitter, however, Microsoft’s move unleashed more enthusiasm among women in different industries.

“This is incredible: Microsoft eliminates forced arbitration in cases of harassment etc.,” wrote Susan Fowler, the former Uber engineered who has criticized the ride-sharing company for failing to protect its female workers from discrimination on the job. “The single most important thing tech companies can do to end harassment and discrimination is to end forced arbitration.”

Carlson, who has become a face of the movement against workplace misconduct, tweeted that more companies should follow the company’s lead.

“EVERY organization should end forced arbitration,” she wrote, “because keeping victims silent is how sexual predators can get away with it for years (or decades).”

And Reese Witherspoon, an actress who speaks candidly about sexism in Hollywood, applauded the blow against secrecy.

“No more forced arbitration agreements for sexual harassment cases makes a safer work environment,” she wrote.

Kate Brodock, chief executive of Women 2.0, a group that works to recruit women into the technology industry, said on Wednesday that Microsoft’s announcement reflects the power of the #MeToo movement, which has unleashed millions of stories about sexual harassment and assault on social media since October.

“When you’re closed off and silenced in a corner – that’s one of the biggest problems that has come to light from all of this,” Brodock said.

Still, she added, the movement’s work is far from over.

“So many kudos to Microsoft,” she said, ” but for the industry, I hope this leads to more victories. There’s still a lot of stuff to be done.”

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