Texas based multinational Dell Technologies says it has dropped the practice of requiring its employees to use arbitration for sexual harassment claims.
In response to a routine request for information made by Force the Issue, a coalition of organizations working to end the practice of forced arbitration, the new policy was shared by a Dell spokesperson via email.
Dell's previous policy, based on a statement provided to the same coalition in August 2019, was to require arbitration for sexual harassment claims by default while offering employees a way to opt out. The new Dell policy simply omits the practice of requiring arbitration altogether.
Dell confirmed to Force the Issue the company's arbitration policy changed sometime between the date of the project's first inquiry to Dell in August 2019 and a follow up inquiry made in March 2021. The exact date of the change to the policy is unknown.
Looming legislative factors
Forced-arbitration policies have faced new scrutiny in the Me Too era. Once considered by many to be relatively benign, in recent years the silencing aspects of the practice have received more attention, particularly with respect to claims of discrimination and sexual harassment.
Some business leaders may be taking a closer look at their arbitration policies lately due to a federal bill currently making its way through Congress.
The bill, which recently passed the U.S. House, is the Forced Arbitration Injustice Repeal Act (a.k.a. FAIR Act R. 963). It would make it unlawful for large companies to require arbitration for dispute resolution related to employment, civil rights, and other issues. The bill now sits with the U.S. Senate Judiciary Committee.
Mandatory arbitration agreements are a common practice among U.S. employers. Workers are expected, often as a condition of employment, to sign away their right to access the U.S. court system. Under such agreements, workers who experience sexual harassment or discrimination must use a private arbitration firm to resolve their claims. Such firms are typically chosen and paid for by the employer.
A 2015 report by the Economic Policy Institute (EPI) found that arbitration proceedings tend to favor employers, who most likely benefit from the ongoing paid relationships with arbiters. In 2018, the EPI also found that "women and African Americans are more commonly subject to mandatory arbitration than other workers."
Major hurdle to dismantling
Some of the activists who have been pushing to end the practice of forced arbitration say that raising public awareness is a challenge.
"To me one of the biggest issues is that it takes that second, third, fourth sentence to explain what it is. If you can get to that level of attention on what forced arbitration is, people get furious about it," says Molly Coleman, Executive Director of People's Parity Project, an organization that works to end the practice of forced arbitration at law firms.
Lee Stowell, a former Cantor Fitzgerald broker who sued the firm over alleged sexual harassment she experienced there, says most people have no idea how damaging the practice of requiring arbitration really is.
"Most forced arbitration agreements don't even mention sexual harassment or discrimination, they just say ‘disputes,' so when people sign them, they don't even realize they're giving their employer the right to sweep some really toxic, illegal stuff under the rug," says Stowell.
"The fact that I haven't even been able to talk fully about what I experienced is insane," she adds.
Stowell's case has been held up by Cantor Fitzgerald's ongoing claim that Stowell must use its private arbitration process versus the public courts, despite a 2019 ruling against the company saying it could not enforce an arbitration agreement.
Tech abandoning forced arbitration at highest rates
Despite hurdles to raising public awareness, some industries do appear to be ending the practice of forced arbitration at higher rates.
Overall, the tech sector makes up just 16 percent of the 3,540 total companies in the Force the Issue database, but represents almost 25 percent of the 399 companies that have gone on the record as not using forced arbitration.
One reason tech companies may be more inclined to drop mandatory arbitration is that they compete heavily with one another for talent.
Another factor shaping the tech sector's attitudes toward forced arbitration is a workers' strike that took place nearly three years ago. On November 1, 2018, more than 20,000 Google employees all over the world participated in a one day walk out to protest the company's mishandling of sexual misconduct allegations.
Shortly after the strike, Google announced it was ending the practice of requiring arbitration for sexual harassment claims. Several tech giants including Facebook and Airbnb followed suit and announced they were dropping the practice as well.
Healthcare and finance lagging behind other industries
In contrast to tech, it appears healthcare may be lagging behind other industries in dropping the practice of forced arbitration.
Only 6.1 percent of the 700 healthcare companies listed in the Force the Issue database have confirmed to the project that they don't require arbitration for sexual harassment claims, the lowest rate of not using the practice among the eleven industry sectors being tracked by the project.
Within the healthcare industry, the biotech sector currently has the most companies not using the practice, yet even there, it maintains a strong foothold.
All four major COVID vaccine developers, for instance, are listed in the Force the Issue database as either using the practice or likely doing so. Pfizer is notable as one of only six companies in the database of over 3,500 that affirmatively stated to the project that it requires arbitration for sexual harassment claims. Moderna, AstraZeneca, and Johnson & Johnson are listed as probably requiring arbitration for sexual harassment claims, due to non-response to Force the Issue's inquiries.
Statistically, 65% of companies with more than 1,000 employees use mandatory arbitration, according to the Economic Policy Institute.
The healthcare industry's reluctance to abandon the practice of forced arbitration is of particular concern given that women make up over 70 percent of the workforce according to Department of Labor statistics.
The industry with the second lowest rate of abandoning the practice is finance. As of this writing, only 7.6% out of 654 financial companies in the Force the Issue database report they definitely have ended or never used the practice of forced arbitration for sexual harassment.
As with the now abandoned Dell policy, some companies require arbitration by default, but offer their employees a way of opting out of the policy. It's an approach on which some equity advocates frown.
"Sure, it sounds like you're giving people a choice, but is it a choice?" asks Coleman. "Who feels comfortable opting out of a policy when you're accepting a new job? It's a great way to get that little gold star so it looks like you're doing better than other companies, but essentially a bad policy is still very much in place."
What you can do:
- Encourage your U.S. Senator to vote for the FAIR Act to ban the practice of forced arbitration. Go here to find your senator's contact information. Telephone calls still have the most impact, so we recommend calling your senator to make your voice heard. If a phone call is not possible, sending an email is the next best action you can take.
- Here's a sample of what you can say when you call or write: "I support passage of the Forced Arbitration Injustice Repeal Act and an end to the practice of forced arbitration in corporate America."
- To see which other companies likely use the practice of forced arbitration for sexual harassment claims (and which do not) visit forcetheissue.org