POLITICS

Google Is Ending Forced Arbitration. Don't Expect Your Own Employer To Follow Suit.

The policy change is a big win for Google workers, but most companies are moving in the opposite direction.

Google announced Thursday that it is ending forced arbitration for its workforce. The change means employees will no longer have to take their disputes with Google to an arbitrator ― they’ll have the option of suing the company individually or together as a group.

Workers who’ve signed arbitration agreements can’t take their claims to a public court. Instead, they take them to an arbitrator, usually through an arbitration service that’s paid by the employer. Companies like forced arbitration because it helps avoid large, costly lawsuits that lead to big payouts for workers. It also helps keep allegations of wrongdoing out of the public eye, since everything is litigated behind closed doors before the arbitrator.

Google’s turnaround on arbitration follows months of employee criticism of the practice; 20,000 employees took part in a November walkout that drew international attention. Workers listed forced arbitration as a key grievance, saying it hid workplace abuses and left them with little leverage against a powerful employer. 

Google’s turnaround on arbitration follows months of employee criticism of the practice.
Google’s turnaround on arbitration follows months of employee criticism of the practice.

According to Google, no new employees will be presented with an arbitration clause to sign as a condition of getting a job. All current employees who signed one in the past will be allowed to pursue claims in court instead. The new policy goes into effect March 21, though it won’t apply to Google’s contractors or workers employed through vendors.

The change marks a big win for Google’s direct employees, who aren’t unionized but are nonetheless acting like a union. By eliminating the arbitration policy through public pressure, they have given themselves even more collective power ― through the ability to band together and sue in court over issues like wage theft or discrimination.

Though some of Google’s competitors in Silicon Valley may follow suit, it’s unlikely many other U.S. employers will do so. 

The use of forced arbitration has grown steadily over the last few decades, to the point where an estimated 55 percent of U.S. workers ― roughly 60 million ― are subject to such clauses, according to the Economic Policy Institute. The share of workers employed under forced arbitration has roughly doubled since the early 2000s, giving fewer workers access to the courts for civil rights, family leave, and wage and hour claims.

Among those employers with forced arbitration, roughly a third also require workers to sign class- and collective-action waivers, meaning they can’t join group lawsuits against the company. The result is that many valid claims are never brought to begin with, since they are too small on their own.

Though some of Google’s competitors in Silicon Valley may follow suit, it’s unlikely many other U.S. employers will do so.

The trends in arbitration are unlikely to reverse anytime soon, thanks in large part to a monumental Supreme Court decision last year. In the case known as Epic Systems v. Lewis, several workers had sued their employers over the use of class-action waivers in forced arbitration agreements, arguing that it ran afoul of the bedrock U.S. law enshrining collective bargaining rights.

The court’s conservative majority disagreed, issuing a 5-4 ruling in the employers’ favor ― a decision Justice Ruth Bader Ginsburg savaged in her dissent as ”egregiously wrong.” The ruling essentially gave employers the green light to require workers to sign away their rights to sue collectively in court.

It’s still too early to say how much the ruling encouraged employers to institute arbitration clauses. But it’s likely that many were sitting on the sidelines waiting for a signal from the court on the clauses’ legality before requiring workers to sign them.

For Google, the Supreme Court ruling meant ditching its arbitration agreements was entirely optional, and only necessary after thousands of its employees filled the streets. Other employers, even ones with big names, are unlikely to feel so much pressure to walk back their arbitration policies.

Take the burrito chain Chipotle. That company began inserting an arbitration clause into its hiring packets while it was facing a growing wage theft lawsuit from current and former employees.

Once the Supreme Court decision came down, Chipotle used it to successfully boot nearly 3,000 workers from the collective-action lawsuit. The judge in the case said the ruling left him with no other choice.

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