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Wells Fargo ends mandatory arbitration in sexual harassment cases

One of the outgrowths of the #MeToo movement has been calls for employers to stop requiring alleged victims of sexual harassment and assault to take action via arbitration rather than in court and then to sign nondisclosure agreements (NDAs) that prevent them from speaking publicly about their experience or their settlement.

Among those speaking out about ending the use of mandatory arbitration and NDAs is Gretchen Carlson. She and other Fox News alum have started a group called Lift Our Voices with that goal.

Now banking giant Wells Fargo is ending its requirement of arbitration for sexual harassment claims. It’s the first major U.S. bank to make this change, which, according to its statement, resulted from “internal dialogue and feedback from various stakeholders.”

Two other factors — the fact that Wells Fargo is still recovering from a scandal involving employees setting up fake accounts and the presence of a new chief executive officer — may also have played a role.

It’s not just employees who perpetrate workplace sexual harassment. Another bank, PNC, was just ordered by a jury to pay $2.4 million to one of its former employees. (She was not required to settle the case in arbitration.)

The wealth management professional claimed that PNC refused to do anything after she was sexually assaulted by a customer whom she says was known to engage in such behavior. A spokesperson for the bank, which says it plans to appeal the jury’s decision, said, “Current and former branch employees testified that they received sexual harassment training annually and that they did not view this customer as a threat.”

The victim’s attorney, who was also Gretchen Carlson’s attorney in her lawsuit against Fox News chief Roger Ailes, says that just since the verdict was handed down, “I’ve heard from four female bankers who say they were harassed by wealth customers.”

Another attorney says she would like to see an end to forced arbitration completely. She notes that simply ending it in sexual harassment cases doesn’t help employees or customers who have been victims of discrimination or harassment based on their race, age or other characteristics.

Increasingly, employers are no longer including mandatory arbitration clauses in their employment contracts, changing their contracts to eliminate them or not enforcing these clauses. It’s wise to discuss the pros and cons of such a policy with your attorney.

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