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Brad Smith Microsoft General CounselMicrosoft President Brad Smith Microsoft

  • Microsoft is removing from employees’ contracts provisions that barred them from suing the company over sexual harassment claims.
  • Only a “small segment” of employees had the provisions, which require them to go to arbitration for such claims, in their contracts.
  • The change comes as Microsoft is supporting legislation that would ban such clauses from employment agreements at all companies.
  • Mandatory arbitration clauses have come under fire of late; critics charge that they silence victims of sexual misconduct.

Microsoft is making it easier for employees to sue the software giant over sexual harassment.

The company is removing language found in some of its employees’ contracts that barred them from filing suit over workplace sexual harassment claims. Previously, employees subject to the provisions would have had to go to arbitration to resolve such claims, a private process that can hide the identities of repeated perpetrators.

“Because the silencing of voices has helped perpetuate sexual harassment, the country should guarantee that people can go to court to ensure these concerns can always be heard,” Brad Smith, Microsoft’s president and chief legal officer, said in a blog post announcing the changes. He added: “The easiest mistake any employer can make is to assume that ‘this could never happen here.'”

When a harassment case goes to private arbitration, a victim is usually barred from publicly releasing any details, including the names of any alleged harassers. Critics say that such provisions effectively silence victims, allowing abuse to continue. 

Microsoft supports “The Ending of Forced Arbitration of Sexual Harassment Act of 2017,” proposed legislation from senators Kirsten Gillibrand of New York and Lindsey Graham of South Carolina that would end such provisions, Smith said. But as part of supporting the bill, Microsoft reviewed its own contracts and found that a “small segment of our employee population” had arbitration clauses in their agreements, he said. The company decided it couldn’t support the Gillibrand-Graham bill and continue to include or enforce arbitration clauses in its own employment contracts, he said.

The software giant is just one among many companies that have included arbitration clauses in their employees contracts. Companies often favor arbitration, because it can be less expensive than a public trial and can allow them to avoid bad publicity.

The issue of mandatory arbitration for harassment cases gained national attention last year when former Fox News host Gretchen Carlson sued network president Roger Ailes over alleged sexual misconduct. A mandatory arbitration clause in her 11-year-old employment contract prevented her from taking the matter to court, but her legal team circumvented the matter by suing Ailes personally.

More than 56% of American workers — about 60 million — are subject to mandatory arbitration clauses that cover all kinds of claims, including sexual harassment, according to the Economic Policy Institute’s survey of nonunion private-sector employers.

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