Policy Practicum: Examining Mandatory Arbitration and NDAs for Gender Discrimination Claims

Catalog description

Client: Lift Our Voices, https://www.liftourvoices.org/. In recent years, a large fraction of U.S. employers--including many leading law firms -- have required their employees to sign contracts containing mandatory arbitration clauses and "non-disclosure agreements" (NDAs). Available research suggests that more than 60 million American workers are bound by these arbitration clauses, which require employees who have any type of legal claim arising out of their work or workplace to waive their right to trial and resolve their claims, on an individual basis, in private arbitration. Traditionally, arbitration takes place behind closed doors, and the details of the employee's claim (and employer's response), any evidence presented to the arbitrators, the proceedings themselves and the ultimate outcome are confidential. Moreover, employees who are offered monetary settlements to resolve their arbitration claims -- or lawsuits, for those who were not compelled to arbitrate under a contractual provision -- are typically required to sign NDAs as a condition of receiving compensation. As a result of arbitration and NDAs, information about wrong-doing in the workplace -- even egregious wrong-doing -- never becomes public, arguably diminishing the ability of the legal system to deter harmful behavior. Moreover, with claims resolved individually, in private, and settlements protected by NDAs, it is impossible to detect a pattern of wrongful behavior and to hold wrongdoers to account in the public square. These consequences seem particularly problematic in claims arising from gender discrimination, particularly sexual harassment. Secrecy also prevents us from discovering whether women of color or low-income women of all colors are particularly disadvantaged by mandatory arbitration and NDAs. The expanding use of mandatory arbitration and NDAs in employment claims has evoked…