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Mandatory arbitration for sexual harassment may soon be banned

Mandatory arbitration in workplace sexual harassment cases may soon be a thing of the past. The attorneys general of every state in the nation have joined together, urging Congress to prohibit forced arbitration. The bipartisan group--which includes Texas Attorney General Ken Paxton--is encouraging legislation that would allow victims to take their harassment claims to court.

Mandatory arbitration in the workplace

Many employers include clauses in their contracts requiring mandatory arbitration for sexual harassment claims. Mandatory arbitration compels employees who experience sexual harassment to have their claims determined by an arbitrator--an attorney or retired judge, usually paid for by the employer--rather than a real judge or jury. This keeps employees' claims of sexual harassment out of the public eye--a boon for employers, but an arrangement that many employees and sexual harassment advocates argue is unfair.

The 56 participating attorneys general recently sent a letter to Congress addressing the mandatory arbitration of harassment claims. In their letter, the attorneys requested that lawmakers end "the injustice of forced arbitration and secrecy" surrounding workplace sexual harassment. The letter was purportedly motivated by the recent onslaught of public allegations of workplace sexual misconduct throughout the country.

The implications for employers

If Congress does enact legislation to end mandatory arbitration, it will have a major impact on employers. If an employee approaches a supervisor with allegations of sexual harassment, it may still be possible to settle them in private. But employers would no longer be allowed to incorporate wording into employment contracts that requires alleged victims to give up their rights to a trying their case in a real court before a judge or jury. The claimants would be able to publicly litigate their sexual harassment claims, putting their employers at risk of unfavorable court decisions, costly settlements and bad press. Whether Congress will pass anti-mandatory arbitration legislation remains to be seen, but it will no doubt continue to be a hot-button issue for employers.

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