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Wells Fargo no longer requires arbitration in sexual harassment claims

 

Until recently, Wells Fargo required all employee claims of sexual harassment to be resolved through arbitration. This means employees are forced to give up their right to file a lawsuit in court and have a jury decide the outcome of their claims. Instead, companies such as Wells Fargo pay for private arbitration, which is overseen by a private individual who decides the employees’ claims as well as the amount of discovery to allow. Arbitration helps employers keep allegations of harassment and other misconduct out of the courts, news, and the public’s eye.

A study conducted in 2015 found that arbitration greatly favors companies over the harassment victims. Arbitration can help companies hide inappropriate conduct and keep repeat offenders employed and away from public censure.

Will Wells Fargo’s decision affect the financial industry?

Wells Fargo is the fourth largest bank in the United States. Ending their arbitration policy may encourage other banks to follow suit. While Google, Facebook and other major players in the tech industry ended mandatory arbitration over the past few years, most major firms in the financial sector have decided to retain their mandatory arbitration clauses.  

However, some critics do not think that this policy goes far enough. Mandatory arbitration was only removed from cases involving workplace sexual harassment, but not other forms of harassment. Therefore, while sexual harassment complaints may become public, other types of employee harassment may continue to be swept under the rug.

Are we headed in the right direction?


The U.S. Equal Employment Opportunity Commission reported a drop in total workplace discrimination charges from 2018 to 2019. 76,418 instances of harassment were reported in 2018, 72,675 were reported in 2019. Sexual harassment charges dropped, and only color discrimination and equal pay violation charges increased.

Hopefully, 2020 will continue this downward trend as employers take a tougher stance against harassment, and firms like Wells Fargo move to permit sexual harassment charges to be filed in public courts. It is clear that there is still a lot of work to be done before workplaces are harassment-free. However, each year we can hope to make significant strides in the right direction as people become more aware of this national issue.

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