Microsoft Ends Harassment Arbitration

Microsoft, announced it has 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, according to a blog post on the company’s site.

Brad Smith, Microsoft’s president and chief legal officer, wrote in the memo that the decision was made on a trip back from Washington to meet with Senators Kirsten Gillibrand and Lindsey Graham, who recently introduced new legislation – S. 2203, the Ending Forced Arbitration of Sexual Harassment Act of 2017 – which Microsoft supports:

“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. 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.”

(HRE Editor David Shadovitz wrote about this topic last week.)

“The silencing of people’s voices has clearly had an impact in perpetuating sexual harassment,” Smith told The New York Times on Tuesday.

The timing of the announcement follows Bloomberg’ s reporting on previously sealed court filings brought by a former Microsoft intern that stated she was raped by a fellow intern who was later hired at the company.

Arbitration is a private, quasi-legal procedure originally designed to expedite disputes between corporations, according to Ars Technica. “But over time, it has evolved into a system where individuals are compelled for a variety of reasons to agree to arbitration decisions versus seeking a court decision. The net result is that disputes that normally would have been adjudicated via the public court process are often processed via private arbitration, which generally favors corporations over individuals.”

Only a few hundred of Microsoft’s 125,000 workers have been subject to the requirement, Smith noted, and Microsoft will still require those employees to take claims unrelated to harassment and gender discrimination to arbitration.

Given the current climate on sexual harassment today, it will be very interesting to see which companies follow Microsoft’s bold example — and how quickly they do it.