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Microsoft backs bill barring mandatory arbitration of sex harassment claims, waives its own clause

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Microsoft is backing federal legislation preventing mandatory arbitration of sexual harassment claims, while it takes steps to change its own contractual requirements with some employees.

Chief legal officer Brad Smith announced the technology giant’s policy in a blog post, report the National Law Journal (sub. req.), the New York Times and Bloomberg Technology.

Smith said a limited number of its employment contracts require arbitration for harassment claims, though the company has never enforced the provision. Effective immediately, the company will waive the contractual requirement.

The company is also endorsing the Ending Forced Arbitration of Sexual Harassment Act of 2017, introduced by Sens. Kirsten Gillibrand, D-N.Y., and Lindsey Graham, R-S.C.

The law would make mandatory arbitration in harassment cases unenforceable under federal law. Microsoft is the first Fortune 100 company to endorse the legislation, according to Smith.

Gillibrand said in a statement that eliminating the secrecy of mandatory arbitration agreements would mean “serial predators will be less likely to continue climbing the corporate ladder, and employees won’t be forced to stay quiet about the harassment they have faced at work.”

A 2011 study of nearly 4,000 cases decided by arbitrators from a large arbitration firm found that plaintiffs won about 31 percent of the cases when their employers had only one case before the arbitrator. The win rate declined by more than half when companies had multiple cases before the same arbitrator, according to the Times summary of the study.