Forced arbitration: How AB 51 could right many wrongs

In response to a walkout by 20,000 employees last year, Google announced the scrapping of its policy requiring workers to arbitrate sexual misconduct claims. The tech giant made an even more profound change earlier this year by declaring it was eliminating forced arbitration altogether.

Google's actions were laudable, but there remain millions of California workers who are required to sign away their rights to take their legitimate grievances to court as a condition of employment. These employees may not have as much clout as Google staffers, but they too deserve to be freed from restrictive arbitration agreements.

A bill authored by Assemblywoman Lorena Gonzalez, Assembly Bill 51, would go a long way toward providing those workers with relief. The San Diego Democrat's legislation would ensure employees have the option of taking their workplace sexual misconduct claims and other labor claims to a public forum, such as a court or state agency. AB 51 would do so by prohibiting employers from mandating that their workers agree as a condition of employment to resolve such issues in a secret arbitration proceeding. The legislation would also bar employers from retaliating against employees who refuse to sign forced arbitration clauses.

These worker protections would be particularly important in the sexual harassment and assault context. Forced arbitration has resulted in many horrendous examples of workplace sexual abuse being kept in the dark, making it possible for serial harassers to commit additional offenses, including at new jobs. Employees with the courage to bring forward sexual misconduct claims should be the ones protected, not repeat offenders.

It's been heartening to see workers nationwide demanding better, ranging from high-profile advocates such as former Fox News anchor Gretchen Carlson to little-known line staffers. These anti-arbitration efforts have made an impact beyond Google. Amid the powerful #MeToo movement, other companies have agreed to jettison arbitration policies covering sexual harassment and assault claims.

But it's essential to ensure workers can also bring other claims before courts or state agencies, and AB 51 would pave a way for that to happen. The legislation would also permit employees to refuse to sign agreements requiring them to arbitrate discrimination, retaliation, pay equity and additional types of labor law claims. Violations of law in these realms can be just as damaging to employee morale, and workers should be allowed to seek redress in a public forum.

AB 51, which is co-sponsored by Consumer Attorneys of California and the California Labor Federation, comes at a time in which employers are increasingly subjecting their workers to forced arbitration. While this approach has been common in the tech industry, it has also spread to unexpected industries, such as hospitality and food service. Overall, more than two-thirds of California's workforce is subject to arbitration agreements, according to Gonzalez' office.

Arbitration not only allows employers to keep illegalities hidden and uncorrected, but studies have shown it is a much more employer-friendly venue than the courtroom. Employees often must go before an arbitrator chosen by the employer, and the arbitrator could have an incentive to side with a large company giving them repeat business as opposed to a plaintiff they will likely never see again. Meanwhile, juries are typically much more sympathetic to the legitimate claims of employees facing off against their employers.

Despite AB 51's many worthy aims, it has drawn opposition from members of the business community. The California Chamber of Commerce listed the legislation as its first "Job Killer" of 2019. The chamber argues that the bill would lead to increased costs for employers "as a result of more litigation and the expense of delayed dispute resolutions." The chamber also has suggested, as have others, that the bill would be preempted by federal law.

However, AB 51 does not impinge upon an employer's ability to request arbitration or interfere with enforcement of arbitration agreements between companies and their employees. The legislation only prohibits retaliation against an employee who refuses to agree to an arbitration clause in certain circumstances.

Even conservative U.S. Supreme Court Justice Neil Gorsuch has acknowledged the Federal Arbitration Act has limits. In an opinion he wrote while serving on the 10th U.S. Circuit Court of Appeals, Gorsuch said that before the Federal Arbitration Act's "heavy hand in favor of arbitration swings into play, the parties themselves must agree to have their disputes arbitrated."

Unfortunately, former Gov. Jerry Brown vetoed a bill similar to AB 51 last year, saying it would violate federal law. But Gov. Gavin Newsom has shown a willingness to chart a new course in several areas early in his tenure, and he is considered a strong supporter of workers' rights. Hopefully Newsom will support the common sense and much-needed reforms included in AB 51 if the bill ultimately lands on his desk. 