image: American Apparel

image: American Apparel

Believe it or not, the number of officially-filed sexual harassment complaints hit a two-decade low in 2017. In the midst of the #MeToo movement, which has brought to light alleged wrongdoing by film executive Harvey Weinstein, Guess co-founder and CEO Paul Marciano, famed photographers Terry Richardson, Patrick Demarchelier, and Bruce Weber, American Apparel founder Dov Charney, and many others, “the federal Equal Employment Opportunity Commission (“EEOC”) and its state-level counterparts received just over 9,600 complaints in 2017,” according to data obtained by Bloomberg. That is down from the more than 16,000 complaints received in 1997.

Does this 41 percent drop in the number of sexual harassment complaints filed over the past 20 years – with “every U.S. state seeing the rate of sexual harassment per 100,000 women in the workforce fall” – mean individuals are facing fewer instances of sexual harassment on the job? The answer is probably no. Instead, it likely speaks to another number: The 56.2 percent of private-sector non-union employees – a total of 60.1 million Americans – who are subject to mandatory employment arbitration procedures.

What this decline in EEOC complaints and lawsuits more likely demonstrates, according to no shortage of employment law practitioners and academics, is the fact that individuals who have been on the receiving end of sexual harassment in the workplace are less able to bring their claims in front of a court of law. The number of cases is almost certainly in decline for one of the same reasons that sexual harassment continues to permeate workplaces: How claims of wrongdoing are handled procedurally.

The problem starts even before an individual’s employment tenure, when he/she signs his/her contract. In a trend driven by “a series of Supreme Court decisions dating back to 1991, American employers are increasingly requiring their workers to sign mandatory arbitration agreements,” according to a report from the Economic Policy Institute.

As such, no small number of individuals sign contracts, as a condition of their employment,  that contain a mandatory arbitration clause. Such a provision stipulates that the employee will be required to resolve a dispute with his/her employer, including charges of sexual harassment, through arbitration and not before a court. (Note: This does not mean that an individual cannot file a complaint with police; although the reasons why individuals are apprehensive about reporting sexual violence to the police can be many). 

 image: Bloomberg 

image: Bloomberg 

In practice, arbitration differs from formal litigation in that its proceedings are private, meaning that third parties cannot attend arbitral conferences and hearings, and in some cases, are completely confidential, thereby obscuring information about the proceedings – and also, the allegations of wrongdoing – from the public and from the claimants’ co-workers, who may have also experienced similar harassment.

More often than not, the participants in an in-house arbitration are also forced to sign confidentiality agreements as a prerequisite to the settlement of the claims and any financial arrangement.

The private process “creates a false illusion that we’ve sort of solved the problem because we have the hotlines, we have systems in place, we’ve done the training,” Orly Lobel, a labor and employment law professor at the University of San Diego, told Bloomberg. “There’s a public price we’re paying for not knowing what’s going on in our workplaces.”

One matter that comes to mind is the $32 million settlement between Fox News’ top-rated host Bill O’Reilly and his fellow Fox co-worker Lis Wiehl. As reported by the New York Times in October, “Mr. O’Reilly secretly settled a sexual harassment allegation with [Wiehl] for $32 million — the largest, by far, of six such agreements that eventually toppled the outspoken commentator.”

The news broke after Fox News and its parent company 21st Century Fox “tried and ultimately failed to contain the second wave of a sexual harassment crisis that initially burst into public view the previous summer and, which cost the Fox News chairman, Roger Ailes, and eventually Mr. O’Reilly, their jobs.”

While 21st Century Fox acknowledged to the Times “that it was aware of [Wiehl’s] complaints about Mr. O’Reilly, which included allegations of repeated harassment, a nonconsensual sexual relationship and the sending of gay pornography and other sexually explicit material to her,” little more is known about the matter, as all parties were sworn to secrecy – legally – due to confidential nature of the settlement.

“Although the matter had been settled confidentially, Mr. O’Reilly’s lawyers were [particularly] concerned about keeping the dollar figure secret,” wrote the Times. The $32 million settlement number ultimately made its way to the press, but few other details of the arbitration – and Ms. Wiehl’s allegations against O’Reilly – were made public. 

More is known about the sexual harassment lawsuit that former Fox News host Gretchen Carlson filed against Fox News chairman and CEO Roger Ailes in 2016. Like Wiehl, Carlson signed an employment contract containing a provision in which she agreed to resolve disputes with Fox News through private arbitration. This meant that “Carlson’s case could be thrown out [if she filed it in court] and [her attorney Nancy Erika] Smith, herself, could be sued for millions for filing” on Carlson’s behalf, according to New York Magazine

Carlson’s case was remarkable, as she was able to take it to court, something an estimated 60 million Americans cannot do as a result of the widespread use of arbitration requirements. The long-time television host was able to pursue her case in court by suing Mr. Ailes personally, instead of naming Fox News as a defendant, which was prohibited by her employment contract.

The lawsuit ultimately led to Ailes’ resignation from the network (prior to his death in May 2017), and a reported $20 million settlement for Carlson in 2016.

Just as  significant? The fact that Carlson’s suit – and particularly, the public nature of it – informed and empowered more than two dozen other women to come forward with similar accusations against Ailes, a fact that speaks volumes of the importance of providing individuals with the opportunity to have their day in court.