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Google to End Forced Arbitration for Sexual-Harassment Claims--Update

08/11/2018 6:44pm

Dow Jones News


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By Douglas MacMillan 

Google said it will end its requirement for employee sexual-harassment claims to be handled in private arbitration, a move that comes one week after thousands of workers walked out of the company's offices around the world to protest its handling of workplace issues.

In a memo on Thursday, Chief Executive Sundar Pichai told staff that Google will also include more granular details about sexual-harassment claims in regular reports and provide more services to employees who raise concerns, including counseling and career support.

The Alphabet Inc. unit is contending with a rising tide of activist employees who are organizing to demand changes in the way the company conducts business. The internet giant said earlier this year it would not renew a contract supporting the U.S. Defense Department's drone-targeting program after hundreds of Google workers signed a petition questioning the ethics of the project.

The company hasn't backed down from its exploration of a censored search engine for Chinese users, another source of employee frustration.

The policy change for harassment claims is a victory for the organizers of the world-wide walkout, in which employees huddled outside of Google offices from Singapore to San Francisco chanting "Time's Up!" and holding signs that said "Worker's rights are women's rights."

The protest organizers published a letter demanding five changes, including an end to forced arbitration, a revised process for handling sexual-harassment claims and greater transparency around the reports. In its changes Thursday, Google didn't address two demands: that the company commit to end pay inequity for women and minorities; and that the company's chief diversity officer report directly to the CEO.

Representatives of the group organizing the walkout didn't respond to requests for comment.

The protest came together after the New York Times reported that Google protected three senior executives over the past decade after they were accused of sexual misconduct, including one who received a $90 million exit package in 2014. Google declined to comment on details in the Times story.

Google follows tech peers like Microsoft Corp. and Uber Technologies Inc. in opting to end forced arbitration, a widespread but controversial practice that prevents U.S. workers from suing their employers in open court. Companies prefer arbitration for sexual-harassment claims because it tends to lead to quicker settlements at a lower cost than class-action suits and may spare companies from bad publicity.

The percentage of nonunion, private-sector employees covered by the mandatory-arbitration clauses has more than doubled since the early 2000s, according to a 2017 study by a Cornell University professor and sponsored by the Economic Policy Institute, a left-leaning think tank in Washington, D.C.

An analysis by The Wall Street Journal earlier this year found that a small number of sexual-harassment claims actually reach arbitration.

In many cases, workers drop the claims because they can't get lawyers to take their cases. Plaintiffs' lawyers say they are reluctant to represent arbitration clients on contingency fees because potential settlement and award payouts are generally lower than in court.

In an announcement outlining its policy changes, Google said it had discovered that alcohol was a factor in about 1-in-5 harassment complaints. The company said it will encourage senior executives to restrict excessive drinking at company events.

The company also said it would dock the performance ratings of any employee who doesn't complete sexual-harassment training, including senior leaders.

Write to Douglas MacMillan at douglas.macmillan@wsj.com

 

(END) Dow Jones Newswires

November 08, 2018 13:29 ET (18:29 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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