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The relationship between arbitration agreements & sex harassment

Most people think of sexual harassment and gender discrimination as two separate, unrelated offenses. For some purposes, they are separate. But in most workplaces, Sexual harassment includes gender discrimination and vice versa. An office culture that condones either behavior likely condones both.

This point was clearly articulated in a recent New York Times opinion piece. The author is a woman named Maureen Sherry, who worked on Wall Street for years. Her article chronicles numerous instances where she and other women experienced sexual harassment, gender discrimination and pregnancy discrimination - sometimes all in the same day.

Many male-dominated professions (such as Wall Street finance jobs) have faced pressure to become more inclusive of women. But what progress has been made has not significantly changed the culture of many of these companies. Women still face double standards, pay disparities and frequent harassment.

Why haven't there been more substantial changes? According to Sherry, one of the biggest obstacles for women is being required to sign arbitration agreements as a condition of employment (this can also be an obstacle for male employees as well). These agreements force workers to settle any disputes directly with their employer with the help of a third-party arbitrator. The arbitrators are supposed to be neutral, but because companies hire and pay the arbitrators, there is a rather glaring conflict of interest that makes neutrality nearly impossible.

Sexual harassment and discrimination complaints do not make it to court. Instead, they are kept confidential and decided by an arbitrator. Even when the victims prevail in arbitration, they are prevented from discussing their complaints with others. This means that the public never hears about the unacceptable behavior that occurs in a particular company, so the company never faces public pressure to reform the workplace culture.

Mandatory arbitration clauses are quickly becoming a standard feature of employment contracts. While they are great for employers, they leave workers with very little recourse when harassment and discrimination occur. Perhaps, as Sherry suggests, getting rid of these arbitration agreements is the best (and perhaps only) way to reduce the prevalence of these offenses.

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