Microsoft Moves to End Secrecy in Sexual Harassment Claims
Posted December 19, 2017 4:33 p.m. EST
SEATTLE — The wave of sexual harassment claims has toppled powerful men in entertainment, media and politics. Now, it is also creating permanent changes in workplace policy at one giant technology company.
Microsoft, one of the world’s biggest software makers, said on Tuesday that it had eliminated forced arbitration agreements with employees who make sexual harassment claims and was also supporting a proposed federal law that would widely ban such agreements.
The moves make Microsoft an early company — and certainly the most prominent — to take such steps to end legal agreements that have been criticized for helping to perpetuate sexual abuse in the workplace. Forced arbitration lets companies keep harassment and discrimination claims out of court, effectively cloaking them from public view and, in some cases, allowing serial harassers to continue their conduct for years.
“The silencing of people’s voices has clearly had an impact in perpetuating sexual harassment,” Brad Smith, Microsoft’s president and chief legal officer, said in a phone interview.
Microsoft’s action shows how the flood of harassment accusations has gone beyond individual cases to an examination of policy changes for ending the misconduct. That includes greater scrutiny of legal settlements that have silenced victims of abuse.
In one prominent case, an arbitration clause nearly prevented Gretchen Carlson, the former Fox News anchor, from bringing her lawsuit over sexual harassment against Roger Ailes, the former chairman and chief executive of Fox News. Carlson found a legal maneuver allowing her into court, but many employees are not as lucky.
In an op-ed article in The New York Times in October, Carlson wrote that “reforming arbitration laws is key to stopping sexual harassment.” According to the Economic Policy Institute, more than half of U.S. workers are bound by arbitration clauses.
Since then, lawmakers have taken up the issue. Earlier this month, a bipartisan group of senators, including Lindsey Graham, R-S.C., and Kirsten Gillibrand, D-N.Y., proposed legislation that would make forced arbitration in harassment cases unenforceable under federal law.
Smith of Microsoft said he first became aware of the Senate bill after meeting with Graham in Washington to discuss cybersecurity and immigration. Graham urged Microsoft to support the bill, Smith said.
“What this legislation does is ensure that people’s voices can always be heard by going to court, if that’s what it takes for those voices to be heard,” Smith said. “It’s the kind of step that can make a difference.”
He said eliminating the arbitration requirement for harassment claims by its own employees represented an immediate step the company could take while the Senate bill was being considered. The move is largely symbolic because only a minority of Microsoft workers — numbering in the hundreds in its senior ranks, according to Smith — have been subject to the requirement. Microsoft will still require those employees to take claims unrelated to harassment and gender discrimination to arbitration. In total, Microsoft has about 125,000 employees around the world.
Like other technology companies, Microsoft has faced accusations that it has tolerated harassment and discrimination against female employees. Last week, Bloomberg reported that documents unsealed in a gender bias case showed that an unnamed former intern for Microsoft accused another intern of sexually assaulting her outside of work, and that Microsoft required the two of them to continue working together while it investigated the claims.
In a statement, Microsoft said it did not tolerate sexual harassment or assault. “We work hard to create a safe work environment for every employee,” the company said, adding that it encouraged the former intern to take her complaint to law enforcement.
Gillibrand said that getting rid of the arbitration agreements would benefit employers in the long run. “Without the secrecy of mandatory arbitration agreements, serial predators will be less likely to continue climbing the corporate ladder and employees won’t be forced to stay quiet about the harassment they have faced at work, which is good for employees and good for business,” she said in a statement.
By using the arbitration clauses to bar people from joining together as a group, employers — both large and small — have effectively taken away one of the few tools that workers have to fight harassment or discrimination.
The Equal Employment Opportunity Commission has found that forced arbitration “can prevent employees from learning about similar concerns shared by others in their workplace.” Given the proliferation of the clauses, some regulators and civil rights experts also worry that arbitration clauses can obscure patterns of wrongdoing. Strict confidentiality can turn up in a variety of contexts, from payday-lending outfits, which sometimes rely on them to conceal the true identity of lenders that operate through shell companies, to personal relationships. Employment contracts are among the most problematic, lawyers said.
In arbitration, the rules tilt heavily in favor of businesses, employment experts said. Part of the problem is that instead of judges, cases are decided by arbitrators who sometimes consider the companies that routinely bring them business their clients, according to interviews with arbitrators.
The more often companies head to arbitration, the better their chances of winning the case, according to the conclusion of a 2011 analysis by Alexander J.S. Colvin, a professor at Cornell University’s School of Industrial and Labor Relations.
Of 3,945 employment cases decided by arbitrators from one of the nation’s biggest arbitration firms, plaintiffs prevailed in about 31 percent of them when employers had only one case before the arbitrator, according to Colvin’s study. The rate of victory for employees plummeted by more than half when companies had multiple cases before the same arbitrator.