Arbitration Agreements Under Fire in the #MeToo Era

    In the wake of the #MeToo environment, legislators in several states and in Congress have taken aim at arbitration agreements as they apply to claims of sexual harassment in the workplace.FN1 Additionally, all 56 attorneys general recently sent a letter to Congress asking it to prevent employers from requiring that sexual harassment claims be resolved through arbitration.FN2

    Legislators in Colorado went a step further by proposing legislation that would create a chilling effect on arbitrations related to employment or consumer claims by requiring arbitrators to disclose certain information and would provide avenues to challenge an arbitrators’ impartiality, among other things.FN2 Although arbitration agreements are and will continue to be under fire, such agreements remain viable and enforceable under Colorado and federal law.

    Employers should continue to consider whether to include arbitration agreements in connection with the employment of its workforce to limit litigation costs and exposure to excessive and possibly unconstitutional jury verdicts. Campbell Litigation will continue to provide updates regarding pending or approved legislation in this area.

Footnotes:

FN1: States that have considered legislation barring arbitration of employment discrimination lawsuits include Washington, New York, New Jersey, and Massachusetts. Below are links to bills introduced in these states and Congress:

·         http://apps2.leg.wa.gov/billsummary?BillNumber=6313&Year=2017&BillNumber=6313&Year=2017

·         http://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2017&sInd=0&body=S&type=B&bn=999

·         https://www.budget.ny.gov/pubs/press/2018/pr-enactfy19.html

·         http://www.njleg.state.nj.us/bills/BillView.asp?BillNumber=S121;

·         https://malegislature.gov/Bills/190/H4058;

·         https://www.congress.gov/bill/115th-congress/house-bill/4570

FN2: http://www.coloradoindependent.com/168643/coffman-arbitration-sexual-harassment

FN3: Colorado’s proposed Arbitration Services Provider Transparency Act would have required arbitration services providers that administer consumer or employment arbitrations to collect, publish, and make available specified information on those arbitrations administered in the previous 5 years.  http://leg.colorado.gov/bills/hb18-1262. The proposed Colorado Arbitration Fairness Act would have applied to certain consumer and employment arbitrations and would have required ethical standards for arbitrators, allowed any party to challenge in court the impartiality of an arbitrator or arbitration services provider, and authorized injunctive relief against an arbitrator or arbitration services provider who engages in certain specified acts.  http://leg.colorado.gov/bills/hb18-1261. Both bills were recently “killed” (i.e., suspended indefinitely) in the Republican-controlled Colorado Senate.