January 25, 2018, Trial News

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Microsoft voids forced arbitration clauses in employee contracts for claims of sex discrimination, harassment

Diane M. Zhang

picture of Microsoft logo on building

Microsoft has announced that it will eliminate forced arbitration clauses in agreements with its employees. A blog post written by the company’s president and chief legal officer, Brad Smith, recounted how the recent #MeToo movement prompted Microsoft to examine its own internal policies, which led the company to discover forced arbitration clauses in employee agreements for a small number of its employees. Those clauses are now void.
 

On Dec. 19, Microsoft announced that it will eliminate forced arbitration clauses in agreements with its employees. A blog post written by the company’s president and chief legal officer, Brad Smith, recounted how the recent #MeToo movement prompted Microsoft to examine its own internal policies, which led the company to discover forced arbitration clauses in employee agreements for a small number of its employees. Those clauses are now void.

“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,” the blog post read. Microsoft’s decision was announced shortly after media outlets reported on the contents of unsealed documents from a 2014 class action against Microsoft alleging gender discrimination at the company. The plaintiff, an intern, alleged that a fellow intern assaulted her after a post-work event; despite filing a police report and relating the assault to her supervisor, Microsoft required her to work alongside her alleged rapist and hired him after the internship ended.

Microsoft also announced that it has become the first Fortune 100 Company to endorse bipartisan legislation introduced by Senators Kirsten Gillibrand (D-NY), Lindsey Graham (R-SC), Lisa Murkowski (R-AK), and Kamala Harris (D-CA); and Representatives Cheri Bustos (D-IL-17), Walter Jones (R-NC-3), and Elise Stefanik (R-NY-21). S. 2203/H.R. 4734, the “Ending Forced Arbitration of Sexual Harassment Act of 2017,” introduced early last December, would ensure victims of sex discrimination and harassment have the opportunity to get their day in court. The legislation’s sponsors were joined by former Fox News host Gretchen Carlson, who was prevented from taking her allegations against Roger Ailes, the late chairman of Fox News, to court due to a forced arbitration clause in her employment contract with Fox. She successfully sued Roger Ailes directly instead.

“Forced arbitration allows sexual harassment and discrimination to flourish in our workplaces by shrouding allegations in secrecy and denying survivors their day in court,” said Andrew Rogers, AAJ’s director of legislative programs. “With Microsoft’s announcement, companies are recognizing that forced arbitration is bad for business. Microsoft should be commended for stepping up, doing the right thing, and taking meaningful steps to help improve workplaces for everyone.”