Background
Impact of Epic Systems
Employers' options
Comment


This article reviews the impact of the #MeToo movement, and other corporate culture concerns, on employers and its connection with the Supreme Court's decision in Epic Systems.(1)

Background

Approximately 13 years ago, Tarana Burke established an activist group that she called '#MeToo' in an effort to raise awareness and create a support network for survivors of sexual assault. When Harvey Weinstein was exposed in October 2017 for having allegedly engaged in numerous acts of sexual assault and harassment, many other women started sharing their stories through Twitter and other forms of social media using the hashtag MeToo.

Following Actress Alyssa Milano stumbling on this phrase, unaware of its origins, and urging survivors of sexual aggression to use it, the #MeToo hashtag was used more than 12 million times. The #MeToo movement has not only demonstrated that there is power in numbers, but also that access to a public forum can be a key driver in forcing companies and society as a whole to pay closer attention to the problem of sexual assault and harassment. Further, this movement has helped to effectuate the type of changes in culture and attitude that lead to the elimination of this type of misconduct.

Impact of Epic Systems

There is concern that the Supreme Court's decision in Epic Systems will, in many cases, deprive women and men who have been victims of sexual assault or harassment in the workplace of their right to bring collective or class actions, as Epic Systems has forced employees to bring their claims through one-on-one arbitration. Further, there is concern that this decision will deny employees access to a public forum, since arbitration is generally private and settlements typically include confidentiality provisions.

This concern can be seen in a recent Huffington Post article, which used the following headline: "The Supreme Court Is Helping Companies Get Away With Sexual Harassment". According to the vice president of the National Women's Law Centre, Emily Martin:

it is a real blow to women in the workplace. The steam from the #MeToo movement the power that comes from women's voice is coming together. This decision makes it so much harder for employees to challenge harassment or other forms of discrimination, which means that those workplace abuses are more likely to continue.

Further, Professor Ruan of the University of Denver's Sturm College of Law has stated that class actions have forced companies to change their policies and pay significant monetary damages. In her dissenting opinion in Epic Systems, Justice Ginsburg, who was joined by two other female justices, Justice Kagan and Justice Sotomayor, and by Justice Breyer, stated that "the inevitable result of today's decision will be the under-enforcement of federal and state statutes designed to advance the well-being of vulnerable workers".

However, Ginsburg's dissent also states that she does not believe that the majority opinion will apply to complaints asserting disparate impact and pattern of practice claims that call for proof on a group-wide basis.

According to a 2018 Economic Policy Institute analysis, approximately 60 million workers in the United States have already signed away their right to go to court by agreeing to arbitrate disputes with their employers. Of those workers, approximately 30% have also signed the kind of class action waivers that were at issue in Epic Systems.

For companies that already have mandatory arbitration programmes, the question has now become whether they should take action in the wake of the #MeToo movement and Epic Systems.

Employers' options

Carve out sexual harassment claims
For various reasons – including a concern about the #MeToo movement and other public relation issues – companies such as Uber, Lyft and Microsoft have carved out sexual harassment claims from their otherwise mandatory arbitration programmes.

However, most companies should steer away from this, as it could lead employees (or even the media) to conclude that the company prioritises sexual harassment over other forms of discrimination (eg, racial discrimination, age discrimination and disability).

Review existing programmes
Employers that already have mandatory arbitration programmes should carefully review their policies and consider whether any changes are necessary in light of Epic Systems. For example, many mandatory arbitration agreements are silent on whether employees have waived their right to bring classic collective class actions. Without a clear waiver of this right, arbitration provisions could be construed to permit employees to commence classic collective class actions in the arbitration proceeding itself, as was recently the case in the Ninth Circuit's ruling in Lamps Plus v Varela.

On 30 April 2018 the Supreme Court granted a petition for writ of certiorari in Lamps Plus. It will be interesting to see how this case develops in the Supreme Court.

Companies without arbitration programmes
For companies without an arbitration programme, now would be a good time to consider whether to adopt one. For example, for companies spending millions of dollars a year on defending wage and hour class action or collective cases, a mandatory arbitration programme could result in significant cost savings.

Employers can choose between many types of arbitration programme, including ones that allow employees to opt in when a claim arises or opt out if they do not want to give up their right to go to court.

Regardless of the specifics of the programme, companies planning to adopt a programme involving arbitration should inform employees of the potential benefits that they will receive. Even if there are no other perceived benefits to employees, the speed of final resolution is viewed by many employees as a major benefit.

Along these lines, serious consideration should be given to including a mediation opportunity prior to the arbitration so that the parties have an opportunity to be heard by a neutral party before the commencement of any arbitration.

Comment

In short, companies without arbitration agreements or those with arbitration agreements but without limitations on class or collective actions should review their historical litigation expenses and decide whether implementing such an programme is worthwhile. That said, with the advent of the #MeToo movement, there are social issues that must be considered even if such programmes will bring significant savings.

Finally, employers asking themselves whether and how to make their arbitration programmes more employee friendly – specifically in terms of sexual harassment claims – must remember that this can be a slippery slope: if too many exceptions are carved out, the company will be left with no rules. Further, as companies carve out further exceptions for sexual harassment claims, what message does this send about, for example, racial discrimination?

In light of these considerations, employers are advised to seek counsel from their lawyers and a public relations firm.

For further information on this topic please contact Brian S Cousin or Richard I Scharlat at Dentons by telephone (+1 212 768 6700) or email ([email protected] or [email protected]). The Dentons website can be accessed at www.dentons.com.

Endnotes

(1) This article is part of a series on the impact of Epic Systems throughout the United States. For previous articles in the series, please see "Practical insights for employers considering mandatory arbitration programmes following Epic Systems" and "California's employment regulatory scheme: PAGA in wake of Epic Systems".