Microsoft Ends Forced Arbitration in Harassment Cases, Backs Bipartisan Legislation

Microsoft is taking a stand against sexual harassment.

No more forced arbitration at Microsoft. Stephen Brashear/Getty Images

Microsoft (MSFT) is taking a stand against sexual harassment.

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The tech giant announced today that it was stopping the use of forced arbitration agreements with employees who file sexual harassment claims. Such agreements, which allow companies to settle cases privately out of court, have been criticized for helping to perpetuate sexual misconduct in the workplace.

Microsoft president and chief legal officer Brad Smith wrote in a blog post that while the company had never enforced an arbitration provision, about 1,000 of its 125,000 employees required such protections in their contracts. That requirement has now been waived.

“Every person deserves a workplace where he or she is treated with respect,” Smith wrote. “We’ll continue to identify new opportunities within our own company to support the respectful culture we’re working to advance.”

There is one catch: Microsoft will still require employees to go through arbitration for claims unrelated to harassment and gender discrimination.

Like other technology companies, Microsoft has been under the microscope because of sexual harassment claims. Last week an unnamed former intern accused another intern of sexually assaulting her outside of work. Microsoft allegedly required the two of them to continue working together during the investigation.

Microsoft isn’t just making internal changes, however—it’s also supporting national legislation. Smith revealed that Microsoft had become the first Fortune 100 company to endorse the bipartisan Ending Forced Arbitration of Sexual Harassment Act, proposed earlier this month by Senators Lindsey Graham and Kirsten Gillibrand.  The bill would ensure that every person facing sexual harassment in the workplace can make their case in a public court.

“To expect change without pushing for change is unrealistic,” Graham said in a press release announcing the bill. “Ensuring that sexual harassment and assault claims cannot be negotiated away before they occur will create incentives to change the workplace environment.”

Smith recently met with Graham on Capitol Hill to discuss harassment issues.

“As each new story about sexual harassment demonstrates, current approaches in this area have proven insufficient,” Smith wrote. “Even as we look squarely at the sins of the past, we must take stronger steps to prevent these problems in the future.”

According to the Economic Policy Institute, more than half of American workers (about 60 million people) are bound by arbitration clauses. And since arbitrators usually consider the companies their clients instead of the individual plaintiffs, the businesses overwhelmingly win their cases.

Many Silicon Valley companies such as Facebook and Twitter include forced arbitration clauses in their contracts—although Facebook allows some employees to opt out of arbitration.

Forced arbitration has been a sticking point in many recent sexual misconduct cases. Former Fox News anchor Gretchen Carlson said the network’s clause prevented her from suing CEO Roger Ailes over harassment–she had to find separate legal means to do so.

Carlson, who has stated that “forced arbitration is a harasser’s best friend,” is joining Smith in support of the Graham-Gillibrand bill.

Microsoft Ends Forced Arbitration in Harassment Cases, Backs Bipartisan Legislation