Why it matters

Following the hot new trend in employment law, both Uber and Lyft announced they will no longer mandate confidentiality and arbitration provisions for passengers, drivers and employees who raise sexual assault and/or harassment claims. The #MeToo movement has spurred employers—notably, Microsoft, which was the first to declare that it had discontinued the use of such provisions—to drop both confidentiality and arbitration requirements in cases involving sexual harassment and/or assault. Lawmakers and regulators have also jumped on board, with a total of 56 attorneys general urging federal legislators to pass a bill that would prohibit the use of such provisions, which they argued create a “veil of secrecy” that perpetuates a culture of silence. It remains to be seen whether other employers will follow in the footsteps of Microsoft and the ride-sharing companies.

Detailed discussion

The #MeToo movement continues to impact employers, with high-profile announcements from Uber and Lyft that the companies will no longer use confidentiality and mandatory arbitration requirements for passengers, drivers and employees in claims involving sexual assault and/or sexual harassment.

“[W]e will no longer require mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber riders, drivers or employees,” Uber Chief Legal Officer Tony West wrote in a blog post. “[S]urvivors will now have the option to settle their claims with Uber without a confidentiality provision that prevents them from speaking about the facts of the sexual assault or sexual harassment they suffered.”

The same day, Lyft made a similar change. “We agree with the changes [made by Uber] and have removed the confidentiality requirement for sexual assault victims, as well as ended mandatory arbitration for those individuals so that they can choose which venue is best for them,” according to the Lyft statement. “This policy extends to passengers, drivers and Lyft employees. The #MeToo movement has brought to life important issues that must be addressed by society, and we’re committed to doing our part.”

Other efforts to combat the use of such provisions have also made headlines. In December, Sens. Kirsten Gillibrand (D-N.Y.) and Lindsey Graham (R-S.C.) introduced the Ending Forced Arbitration of Sexual Harassment Act of 2017.

Senate Bill 2203 states that “no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of a sex discrimination dispute,” defined as “a dispute between an employer and employee arising out of conduct that would form the basis of a claim based on sex under Title VII.”

The bill remains pending before the Senate Health, Education, Labor and Pensions Committee but received some high-profile backing when the National Association of Attorneys General sent a letter to the leadership of both the Senate and House of Representatives asking “for your support and leadership in enacting needed legislation to protect the victims of sexual harassment in the workplace.”

Many employers require that their employees, as a condition of employment, sign arbitration agreements mandating that sexual harassment claims will be resolved through arbitration instead of judicial proceedings, explained the AGs of all 50 states, the District of Columbia, and the territories of American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the Virgin Islands.

But the use of such provisions perpetuates a “veil of secrecy,” which “may then prevent other persons similarly situated from learning of the harassment claims so that they, too, might pursue relief. Ending mandatory arbitration of sexual harassment claims would help to put a stop to the culture of silence that protects perpetrators at the cost of their victims.”

The attorneys general also praised Microsoft, which launched the trend of employers discontinuing the use of arbitration requirements with respect to sexual harassment claims.

In a blog post, Microsoft President and Chief Legal Officer Brad Smith said that he met with Sen. Graham to discuss Senate Bill 2203, and the company decided to endorse the legislation. “The easiest mistake any employer can make is to assume that ‘this could never happen here,’” he wrote. “While it’s natural to hope and believe that’s the case, one of the fundamental lessons of recent months is that people’s voices need to be heard if their problems are to be addressed.”

“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,” Smith wrote. “And we should act immediately and not wait for a new law to be passed. 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.”

To read Uber’s announcement, click here.

To read Microsoft’s announcement, click here.