On July 22, 2019, Nick Reiter was quoted in Law360 regarding Southern District of New York Judge Denise Cote's recent ruling that the Federal Arbitration Act trumps New York state's year-old ban on arbitrating sexual harassment claims. According to the article, the ruling breathes new life into the ability of employers to include sexual harassment claims in the arbitration if they prefer that forum.
Reiter, however, said that even though Judge Cote's decision is a win for employers, some businesses in New York may still shy away from including sexual harassment and other types of workplace bias claims in their arbitration agreements.
Part of the reason for this is that during the #MeToo movement, states have not only passed laws governing arbitration agreements, but also passed statutes that seek to curtail the use of nondisclosure agreements, according to Reiter, who noted that those laws don't have the same federal preemption questions surrounding them and could potentially take off the table one of the biggest benefits — confidentiality — that employers get out of arbitration.
"Some states like New York have passed laws that prohibit or at least limit those types of nondisclosure promises between employer and employee and there's no preemption issue about a state law prohibiting nondisclosure of a sexual harassment allegation," Reiter said. "States are still free to legislate in that area. … So, I think savvy employers are going to look at the whole picture and evaluate whether arbitration still makes sense."
But even though Reiter called Judge Cote's decision "a win" for employers that want to arbitrate workplace claims, he cautioned that they "must still address sexual harassment issues in the workplace," whether or not they have broad arbitration agreements covering such claims.
"A well-drafted anti-harassment policy and frequent anti-harassment training programs are some of the best ways to curb the risk of an expensive and potentially embarrassing sexual harassment claim," he said.