Google to End Forced Arbitration for Sexual-Harassment Claims

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Google employees staged a walkout in New York on Nov. 1 over the treatment of sexual harassment at the company. Similar protests were held at Google offices around the world.

Google employees staged a walkout in New York on Nov. 1 over the treatment of sexual harassment at the company. Similar protests were held at Google offices around the world.


Photo:

bryan r. smith/Agence France-Presse/Getty Images

Google said it would 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 greater detail on sexual-harassment claims in regular reports and provide more services to employees who raise concerns, including counseling and career support.

The

Alphabet
Inc.


GOOGL -1.23%

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 wouldn’t 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 away 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 read “Worker’s rights are women’s rights.”

The protest organizers published a letter with five demands, including an end to forced arbitration, a system that encourages HR staff to treat victims of harassment fairly and greater transparency around the reports on harassment claims. In its steps announced Thursday, Google didn’t address two of the 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.

In a blog post on Medium on Thursday, the organizers of the walkout called Google’s response “progress” but said the measures don’t go far enough to make diversity a priority and include protections for the contract workers who make up a large portion of the company’s workforce.

The world-wide 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 yield quicker settlements at a lower cost than class-action suits and may spare companies from bad publicity.

The percentage of nonunion, private-sector employees in the U.S. 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 would 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

Appeared in the November 9, 2018, print edition as ‘Google Changes Arbitration Rule.’