Goldman Sticks With Arbitration for Sexual-Harassment Claims
Goldman Sticks With Arbitration for Sexual-Harassment Claims
(Bloomberg) -- Goldman Sachs Group Inc. won’t stop sending employees who claim they were harassed into arbitration, but will allow some workers to waive the confidentiality of decisions.
“The firm’s review established that the general concerns raised about the use of arbitration agreements are not applicable to Goldman Sachs’ arbitration program or experience,” the bank said in a report on its website. “Nevertheless, the firm takes seriously the shareholder concerns, which are genuine and strongly held.”
The decision represents a loss for critics of the system of forced arbitration, a kind of alternate justice system that allows corporations to keep some fights out of court. The firm had initially opposed a shareholder proposal to study the impact of mandatory arbitration, which was defeated in April, though the margin was so small that company executives agreed to change course.
Goldman said that “while the firm believes that the confidentiality of arbitration proceedings benefits all parties,” those employees who claim sexual harassment “will have the option to waive confidentiality as to the arbitration decision.”
The decision to allow employees to choose if their arbitration outcome is confidential now becomes the base standard for any business still using such restrictive employment contracts, said Meredith Benton, who founded consultancy Whistle Stop Capital.
“Investors’ concerns with arbitration go beyond employee confidentiality,” said Benton, who worked with the Nathan Cummings Foundation on the Goldman proposal. “Arbitration prohibits class actions, disincentivizing employees to come forward with all but the most egregious concerns,” she said, and the bank seems to be keeping complaints about racial discrimination beyond closed doors.
Goldman’s review of arbitration came after a proposal backed by former Fox News anchor Gretchen Carlson, an early figure in the #MeToo movement, received almost half of shareholder votes despite Goldman’s opposition. The bank has been fighting one of the industry’s biggest class-action gender-discrimination cases.
Wells Fargo & Co. has abandoned mandatory arbitration for sexual-harassment complaints. But, in general, Wall Street is lagging behind Silicon Valley giants such as Facebook Inc., Alphabet Inc.’s Google and Microsoft Corp., which have done away with forced arbitration for sexual harassment.
©2021 Bloomberg L.P.