WASHINGTON (CN) — Former Fox News host Gretchen Carlson joined a group of witnesses Tuesday in urging the Senate Judiciary Committee to crack down on a corporate procedure that they argue robs victims of workplace discrimination and consumers of their day in court.
Carlson, who in 2016 sued former Fox News chair Roger Ailes on sexual harassment charges, told lawmakers during a hearing that her high-profile case “could have been easily swept under the rug like countless others” by a corporate practice known as forced arbitration.
Often found as a provision in employment contracts or consumer terms of service, forced arbitration clauses bar the signer from filing a lawsuit against a company in the event of a dispute — instead pushing the case into a private arbitration process with a third-party mediator.
Carlson, a co-founder of anti-forced arbitration nonprofit Lift our Voices, said the practice strips employees, particularly victims of harassment and discrimination, of their right to choose to resolve workplace disputes through litigation.
Making matters worse, she said, the consequences of forced arbitration are not widely known.
“Employees have no idea that signing on the dotted line and accepting forced arbitration can strip them of their rights to future justice,” Carlson said. She recalled that she was told while starting at Fox News that such procedures were becoming “the way of the world.”
Employees aren’t the only ones who might find themselves on the business end of a forced arbitration clause, said Myriam Gilles, a law professor at Yeshiva University’s Cardozo School of Law.
“Everybody in this room is subject to a forced arbitration clause,” she told lawmakers, pointing out that credit card companies, telephone service providers and other consumer enterprises use similar terms to shield themselves from litigation.
Companies impose forced arbitration clauses to “squelch lawsuits and immunize themselves” from accountability, Gilles said.
Provisions that block employees and consumers from bringing suits against companies also hamper class-action legal efforts, the professor added. Without restrictions on forced arbitration protecting class-action lawsuits, companies “can be doing so many illegal things along the edges that are falling through the legal cracks.”
Congress has already taken some action to crack down on how companies wield forced arbitration clauses.
President Joe Biden in 2022 signed bipartisan legislation that exempted sexual assault and harassment claims from private arbitration, allowing victims of workplace harassment to seek accountability from their employers in court.
Efforts are also underway to expand those exemptions. A bill introduced last summer by South Carolina Senator Lindsey Graham and New York Senator Kirsten Gillibrand would shield individuals alleging workplace age discrimination from forced arbitration provisions.
Carlson, who advocated for the 2022 bill, said both pieces of legislation “give Americans a choice about whether or how to seek accountability — a choice that should not be made by companies or the government."
Lawmakers were largely behind slapping heavier restrictions on arbitration.
Illinois Senator Dick Durbin, who chairs the Judiciary Committee, slammed forced arbitration practices, noting that while they were “pervasive,” the rules governing arbitration often limit the amount of evidence employees or consumers can collect to make their case and that third-party arbitrators are subject only to limited judicial review.
Graham cited his legislation — the Protecting Older Americans Act — and said he and other lawmakers were “trying to level the playing field.”
“What I want to do is to make sure that, if you feel like you’ve been discriminated against because of your age, you can have your day in court,” he said. “I think forced arbitration in that situation doesn’t serve the public interest.”
The South Carolina Republican pointed out that there were instances where arbitration services can be useful, such as mediating conflicts between businesses or seeking advice on investments. But those conflicts, he said, occur on level ground.
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