Google surrenders favored employer tool: mandatory arbitration

Google's announcement it will discontinue mandatory arbitration in employment disputes starting March 21 surrenders a favored employers' tool in resolving legal issues at the height of its strength.

The move comes after 20,000 employees walked out last November to protest Google's use of arbitration in sexual harassment cases. Soon after, Alphabet Inc.-owned Google was among several companies to say they would no longer force arbitration in sexual harassment cases.

Google is the first major employer to end forced arbitration in all employment cases. A spokesperson confirmed the decision, but said there is no official statement yet.

Googlers for Ending Forced Arbitration, a group of organizers and participants in the original walkout, applauded the move, but said there is more to be done beyond the one company.

"We commend the company in taking this step so that all its workers can access their civil rights through public court. We will officially celebrate when we see those changes reflected in our policy websites and/or employment agreements," the post on the website Medium says.

Google confirmed in an email that it will update its online policies soon, and new hires' contracts will reflect the change.

"Google's announcement confirms that the most effective way to stop forced arbitration is not through Congress or the courts, but with public and employee pressure," said Ryan Wu of Capstone Law APC.

"It starts with public-facing companies like Google, who have an image to protect and in-demand employees with the leverage to negotiate the terms of their employment. More companies will surely follow suit. I hope eventually this movement reaches low-wage workers, who truly need protection from forced arbitration," he added.

Even as mandatory arbitration falls under more public scrutiny, the U.S. Supreme Court under Chief Justice John Roberts has repeatedly tangled with the Federal Arbitration Act over the past year. Most notably, it upheld the use of class action waivers in Epic Systems Corp. v. Lewis last May. Such waivers are a standard inclusion in arbitration agreements.

As part of its departure from mandatory arbitration, Google confirmed it will no longer use class action waivers.

When technology companies announced their move away from arbitration in sexual harassment cases, plaintiffs' attorneys saw it as a business move and said it did not go far enough. Now, they hope the complete discontinuation will spread.

"I have to give credit where credit is due. Kudos to Google for doing the right thing," said James M. Finberg of Altshuler Berzon LLP.

Attorneys on both sides of the bar also noted the practical difficulties of not forcing arbitration in only one type of lawsuit, especially if claims were mixed.

"Analytically, it made no sense to distinguish between sex harassment claims and race harassment claims or discrimination claims," Finberg continued.

"I hope other companies follow Google's lead. Just because the Supreme Court says a company can compel arbitration of employment claims does not mean that it makes good sense from a policy or employee relations perspective to do so," he said.

The California Legislature also tangled with arbitration last year. AB 3080, which would have outlawed mandatory arbitration in claims under the Fair Employment and Housing Act, passed both houses but was vetoed by Gov. Jerry Brown. Brown reasoned the law was preempted by the Federal Arbitration Act.

A similar bill was reintroduced in the winter after the election of Gov. Gavin Newsom and the Democratic supermajority.

For Googlers to End Forced Arbitration and other advocates, the next step is spreading the change to Google's suppliers and business partners, as well as the business community at large.

"Google's new forced arbitration policy is a win for all of their employees," said Carney Shegerian of Shegerian & Associates. "While the removal of forced arbitration for sexual harassment and assault cases was a step in the right direction, the same policies should be applied to all forms of discrimination."