Examining Mandatory Arbitration and NDAs for Gender Discrimination Claims (Law 808C)

In recent years, a large fraction of U.S. employers—including many leading law firms — have required their employees to sign contracts containing mandatory arbitration clauses and “non-disclosure agreements” (NDAs). Available research suggests that more than 60 million American workers are bound by these arbitration clauses, which require employees who have any type of legal claim arising out of their work or workplace to waive their right to trial and resolve their claims, on an individual basis, in private arbitration. Traditionally, arbitration takes place behind closed doors, and the details of the employee’s claim (and employer’s response), any evidence presented to the arbitrators, the proceedings themselves and the ultimate outcome are confidential. Moreover, employees who are offered monetary settlements to resolve their arbitration claims – or lawsuits, for those who were not compelled to arbitrate under a contractual provision – are typically required to sign NDAs as a condition of receiving compensation. As a result of arbitration and NDAs, information about wrong-doing in the workplace – even egregious wrong-doing – never becomes public, arguably diminishing the ability of the legal system to deter harmful behavior. Moreover, with claims resolved individually, in private, and settlements protected by NDAs, it is impossible to detect a pattern of wrongful behavior and to hold wrongdoers to account in the public square. These consequences seem particularly problematic in claims arising from gender discrimination, particularly sexual harassment. Secrecy also prevents us from discovering whether women of color or low-income women of all colors are particularly disadvantaged by mandatory arbitration and NDAs.

The expanding use of mandatory arbitration and NDAs in employment claims has evoked considerable controversy and legislation has been introduced at both the national and state level to prohibit the inclusion of these clauses in employment contracts. However, the legislation has yet to move forward on the national level and whether state statutes will withstand challenge is currently unclear. Moreover, there is little systematic evidence of the consequences of mandatory arbitration and NDAs, leaving both supporters and opponents to rely on anecdotes. There is little hard information on the numbers of employees covered by arbitration contracts or how this varies by industry sector and employee gender, race, ethnicity or socio-economic characteristics.  Importantly, we do not know how the existence of these contracts affects men and women’s willingness to bring their claims to their employers’ attention or how claiming varies by race, ethnicity or employee status. Nor do we know how pursuing claims for gender discrimination, including sexual harassment, affects claimants’ future career trajectories.

The Client for this policy lab, Lift Our Voices, was co-founded by women’s rights advocates and broadcast journalists Gretchen Carlson and Julie Roginsky. Ms. Carlson’s sexual harassment suit against powerful former Fox News chairman and CEO Roger Ailes helped pave the way for the #metoo movement. Roginsky left Fox after settling a lawsuit for sexual harassment and discrimination against Fox News, its former co-president Bill Shine and Ailes. To learn more about Lift Our Voices, go to https://www.liftourvoices.org/

The goal of this practicum is to produce objective empirical evidence – both quantitative and qualitative – that can be used in Life Our Voices and others’ advocacy activities regarding mandatory arbitration and NDAs, including advocacy – if the data support this – that argues in favor of restricting or precluding mandatory arbitration and NDAs in some or all circumstances.

In Spring 2021 students in this practicum met with Gretchen Carlson and Julie Roginsky to identify the questions for which empirical evidence would be most useful for policy reform advocacy. Based on these discussions and their review of relevant commentary, the students decided to break up into two teams, each of which would design a research project. Project 1 will interview plaintiff and defense lawyers to develop a better understanding of the incentives for victims of sexual harassment and sexual assault to sign non-disclosure agreements. Project 2 will interview corporate legal counsel in corporations (and potentially law firms) that have abandoned mandatory pre-dispute arbitration contract clauses to develop a better understanding of why these companies and firms abandoned arbitration and what have been the outcomes for the organizations to date. At the end of the spring quarter, each team prepared a memorandum outlining the issues that their team focused on and reviewing the relevant case law and recent statutory reforms. In addition, each team prepared a data collection protocol including draft questionnaires and lists of potential interviewees. The data collection protocols were informed by informal discussions with SLS faculty who are knowledgeable about these issues as well as a few outside advisers.

The goals of the fall quarter are to implement these research designs, collect and analyze data and prepare white papers to share with the clients. Early in the quarter, students will meet with Mss. Carlson and Roginski to discuss policy developments since the spring and may revise the spring quarter students’ research designs in response.

The Canvas page for the fall practicum includes the memoranda and other materials the students produced in the spring quarter. Students interested in registering for the fall practicum should review these materials, keeping in mind that they are free to elaborate on them if they wish and if new policy developments suggest this would be appropriate. If a sufficient number of students register for the practicum one or more related projects may be added to our agenda.


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Clients & Deliverables

Client: Lift Our Voices, https://www.liftourvoices.org/

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