Monday, November 1, 2021
As regular readers know, we here at the blog often fret about arbitration clauses because they appear most often in adhesive contracts (those offered on a take-it-or-leave-it basis) where the adherent lacks bargaining power such as wrap, consumer, and employment contracts. In the wake of #MeToo, a few states such as California and New Jersey, passed legislation banning forced arbitration for sexual harassment claims. However, these laws have been questioned as running afoul of the FAA. There is a bipartisan bill that was introduced in July but who knows how long that might take to become law given how busy those folks are over in D.C. with other matters. Fortunately, in some cases, workers have themselves sought to assert some bargaining power after contract execution, by voicing their discontent to management with their terms. On rare occasions, it even works. Last week, Activision Blizzard’s CEO Bobby Kotick announced in a letter that the company would waive arbitration for sexual harassment and discrimination claims. Presumably, this means that they would not require employees who signed contracts containing forced arbitration clauses to submit to arbitration if they brought a sexual harassment or discrimination claim. It doesn’t say whether the arbitration clauses would remain in their employment contracts, however, for new employees. Also, since a waiver may be retracted, there is a possibility that the company could reinstate the policy, but given the backlash that would cause, it seems unlikely (as of now but who knows). In any event, it’s a start and an indication that as difficult as it may be to harness the power of the collective, when efforts to mobilize are made, they can be quite effective.