Proponents estimated that more than 60 million American workers are subject to forced arbitration clauses in their employment contracts — often through fine print tucked into legal clauses of which the employees are unaware.
Forced arbitration often requires employees who bring an accusation of workplace misconduct to enter a private proceeding with their employer. It takes away employees’ right to make those claims public in court, shifting them to a process that takes place in secret, led by company-appointed arbitrators, and without the ability to appeal the result. Lawmakers said that process weighed heavily in favor of protecting predators and against victims. The legislation seeks to give victims a choice in how they report their claims, including the option to do so publicly.
Some companies have changed their practices on their own. In 2020, Wells Fargo became the first major financial institution to end its forced arbitration policy for employee sexual harassment claims. Airbnb, Microsoft, Google and Facebook have also removed binding arbitration in sexual assault and harassment claims filed by their employees, as they have grappled with such cases and confronted criticism that their policies helped to perpetuate the abuse.
In an interview, Representative Cheri Bustos, Democrat of Illinois, a co-sponsor of the House legislation, called the move to change that practice across the board “the most significant labor legislation of this century.” Over the years that she has worked on the bill, she said, the legislation became narrower and the language simpler to address some Republican concerns.
“The Chamber of Commerce was very aggressively trying to kill this,” Ms. Bustos said. But the current version has addressed the concerns of many Republican lawmakers, including by changing the language to focus only on assault and harassment, and not discrimination.
“It’s pretty darn hard to say ‘no’ to something this straightforward and this life-changing,” Ms. Bustos said. “I think there’s a lot of sexual perverts in the workplace that would have been sent out to pasture a long, long time ago had we not had this ridiculous legal language in employee contracts.”
Representative Ken Buck, Republican of Colorado and a co-sponsor of the House bill, said the legislation was also a celebration of “bipartisanship” and an example of Congress doing its job.