Uber Sued for Harassment for First Time Since Arbitration Policy Change

Allen Smith, J.D. By Allen Smith, J.D. May 22, 2018
Uber Sued for Harassment for First Time Since Arbitration Policy Change

​Just as more employers are considering making arbitration mandatory in light of a recent Supreme Court decision, Uber was sued for the first time on May 21 under its new policy no longer requiring arbitration for individual sexual harassment claims. An engineer alleged that despite formal complaints, colleagues weren't sufficiently disciplined for making sexual remarks at company events and in the office, according to The Wall Street Journal. The plaintiff seeks lost wages and compensation for distress on the job, plus changes to prevent further harassment.

"Uber is moving in a new direction," a spokesman said in a statement, The Wall Street Journal reported. He added that the company has "implemented a new salary and equity structure based on the market, overhauled our performance review process, published diversity and inclusion reports, and created and delivered diversity and leadership trainings to thousands of employees globally."

The Society for Human Resource Management (SHRM) supports alternative dispute resolution to resolve employment discrimination claims.

Individual Claims Permitted

The lawsuit comes a week after Uber reversed its policy of mandatory arbitration that allowed employees alleging sexual harassment and assault to sue Uber in court individually but not as a class. Advocates for workers and victims spoke out against the policy, saying many victims don't have the resources to pursue cases alone. Uber still requires arbitration in other disputes, such as wage and hour claims and discrimination, which the company says is typical among most other companies.

'Deep-Rooted Problem'

In its reversal of policy, Uber announced that it's dropping all arbitration agreements for riders, drivers and employees to allow them to make individual claims of sexual assault or harassment. It also ended confidentiality provisions that prevented victims from speaking out. "The last 18 months have exposed a silent epidemic of sexual assault and harassment that haunts every industry and every community," Tony West, Uber's chief legal officer, wrote in a blog post. "Uber is not immune to this deeply rooted problem, and we believe that it is up to us to be a big part of the solution." But arbitration agreements are common in Silicon Valley—Google and Facebook mandate that all class actions take place in private arbitration, as Uber still does.

Call for Mandatory Arbitration to End

Susan Fowler, a former employee at Uber, wrote a blog post in February 2017 alleging harassment at the organization. Her post shocked the tech sector and prompted the company to investigate its work culture. In April of this year, she called for companies to eliminate mandatory arbitration. Because arbitration is in a private forum, companies risk letting toxic environments continue to flourish, unseen or ignored. "If you waived forced arbitration agreements and let employees bring their claims to court, I bet you'd find out about the problems in your company real quick," she said. She pointed to Microsoft as an example of a major company that recently eliminated forced arbitration agreements with employees who make sexual harassment claims.

[SHRM members-only online discussion platform: SHRM Connect]

Uber's Response to Fowler's 2017 Blog Post

As a result of Fowler's 2017 blog post, Uber hired former U.S. Attorney General Eric Holder, now an attorney with Covington & Burling LLP in Washington, D.C., and Tammy Albarrán, also an attorney at Covington & Burling LLP, to conduct an investigation of its culture. In a 13-page report issued last June, the company created a special committee to evaluate Uber's workplace environment relating to the charges Fowler raised; whether the company's policies and practices were sufficient to properly address discrimination, harassment and retaliation in the workplace; and steps the company could take to ensure diversity and inclusion. Holder's probe was separate from another investigation of the company by the law firm of Perkins Coie, which resulted in Uber firing 20 employees, including some senior executives.
(SHRM Online)

Supreme Court OKs Class-Action Waivers

While Uber has moved away from mandatory arbitration, more companies are likely to embrace it, particularly for wage and hour claims, following the Supreme Court's decision on May 21 that class-action waivers in arbitration agreements are lawful. Dissenting in the 5-4 decision, Justice Ruth Bader Ginsburg called on Congress to legislatively overturn the Supreme Court's ruling. However, writing for the majority, Justice Neil Gorsuch stated that neither the Federal Arbitration Act nor the National Labor Relations Act make arbitration agreements' class-action waivers unlawful.
(SHRM Online)



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