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Gretchen Carlson’s Contract Could Shroud Her Case in Secrecy Gretchen Carlson’s Fox News Contract Could Shroud Her Case in Secrecy
(about 4 hours later)
When Gretchen Carlson sought her day in court with a sexual harassment lawsuit against Roger Ailes, her former boss at Fox News, Mr. Ailes’s lawyers had a quick response: Move the case to arbitration.When Gretchen Carlson sought her day in court with a sexual harassment lawsuit against Roger Ailes, her former boss at Fox News, Mr. Ailes’s lawyers had a quick response: Move the case to arbitration.
Experts and lawyers who have studied arbitration cases say that process, if enacted, could significantly impede Ms. Carlson’s chances of prevailing.Experts and lawyers who have studied arbitration cases say that process, if enacted, could significantly impede Ms. Carlson’s chances of prevailing.
While arbitration is normally a secretive process, a typical plaintiff involved in arbitration would at least be able to speak publicly about his or her case. But Ms. Carlson, a former anchor who was let go last month, had a contract that makes the process even more secret, stipulating that “all filings, evidence and testimony connected with the arbitration, and all relevant allegations and events leading up to the arbitration, shall be held in strict confidence.”While arbitration is normally a secretive process, a typical plaintiff involved in arbitration would at least be able to speak publicly about his or her case. But Ms. Carlson, a former anchor who was let go last month, had a contract that makes the process even more secret, stipulating that “all filings, evidence and testimony connected with the arbitration, and all relevant allegations and events leading up to the arbitration, shall be held in strict confidence.”
“The clause has much broader secrecy language than is common in arbitration,” said F. Paul Bland Jr., an arbitration expert and executive director of the advocacy group Public Justice. “This clause explicitly put in gag-order language on all facts and evidence relating to these types of allegations.”“The clause has much broader secrecy language than is common in arbitration,” said F. Paul Bland Jr., an arbitration expert and executive director of the advocacy group Public Justice. “This clause explicitly put in gag-order language on all facts and evidence relating to these types of allegations.”
The use of arbitration has proliferated over the last decade, as a soaring number of corporations have sought to keep employment disputes private. That is because arbitration in general is a private process, conducted out of public view with no judge or jury. By using the arbitration clauses to bar people from joining together as a group, employers, both large and small, have effectively taken away one of the few tools that workers have to fight harassment or discrimination.The use of arbitration has proliferated over the last decade, as a soaring number of corporations have sought to keep employment disputes private. That is because arbitration in general is a private process, conducted out of public view with no judge or jury. By using the arbitration clauses to bar people from joining together as a group, employers, both large and small, have effectively taken away one of the few tools that workers have to fight harassment or discrimination.
In a report issued just last week, the Equal Employment Opportunity Commission noted that forced arbitration “can prevent employees from learning about similar concerns shared by others in their workplace.”In a report issued just last week, the Equal Employment Opportunity Commission noted that forced arbitration “can prevent employees from learning about similar concerns shared by others in their workplace.”
Some regulators and civil rights experts also worry that arbitration clauses can obscure patterns of wrongdoing.Some regulators and civil rights experts also worry that arbitration clauses can obscure patterns of wrongdoing.
Strict confidentiality can turn up in a variety of contexts, from payday-lending outfits, which sometimes rely on them to conceal the true identity of lenders that operate through shell companies, to personal relationships.Strict confidentiality can turn up in a variety of contexts, from payday-lending outfits, which sometimes rely on them to conceal the true identity of lenders that operate through shell companies, to personal relationships.
But, according to Mr. Bland, only a small minority of employers insert strict confidentiality provisions into their arbitration agreements with workers. Joseph Beachboard, a management-side lawyer at Ogletree Deakins, agreed that the provision was aggressive but said such provisions can be more common in high-profile settings that attract publicity.But, according to Mr. Bland, only a small minority of employers insert strict confidentiality provisions into their arbitration agreements with workers. Joseph Beachboard, a management-side lawyer at Ogletree Deakins, agreed that the provision was aggressive but said such provisions can be more common in high-profile settings that attract publicity.
In arguing for arbitration, Mr. Ailes’s lawyers cited privacy as a crucial component of the employment contract. On Wednesday, David W. Garland, a lawyer representing Mr. Ailes, said, “We view this as a common provision, to further the purposes of the arbitration, and for the benefit of all parties to the arbitration.” (Fox News directed all comment to Mr. Ailes’s lawyers.) Still, confidentiality provisions have sometimes kept the details surrounding accusations of harassment and discrimination under wraps.In arguing for arbitration, Mr. Ailes’s lawyers cited privacy as a crucial component of the employment contract. On Wednesday, David W. Garland, a lawyer representing Mr. Ailes, said, “We view this as a common provision, to further the purposes of the arbitration, and for the benefit of all parties to the arbitration.” (Fox News directed all comment to Mr. Ailes’s lawyers.) Still, confidentiality provisions have sometimes kept the details surrounding accusations of harassment and discrimination under wraps.
In one example, American Apparel required many employees to agree to resolve disputes through arbitration, and to keep most of the details of the arbitration process completely private. Many employment contracts also included a confidentiality agreement that prohibited workers from publicly sharing personal details about Dov Charney, the company’s founder and former chief executive. Those who did, the contracts stipulated, could be required to pay damages of $1 million.In one example, American Apparel required many employees to agree to resolve disputes through arbitration, and to keep most of the details of the arbitration process completely private. Many employment contracts also included a confidentiality agreement that prohibited workers from publicly sharing personal details about Dov Charney, the company’s founder and former chief executive. Those who did, the contracts stipulated, could be required to pay damages of $1 million.
Several cases in which female employees sued American Apparel and Mr. Charney for sexual harassment were pushed out of court and into arbitration, where details were kept private. (An employee who accused Mr. Charney of choking him and rubbing dirt in his face did win the right to pursue his case in court in 2013.) Mr. Charney’s board eventually let him go as chief executive in 2014.Several cases in which female employees sued American Apparel and Mr. Charney for sexual harassment were pushed out of court and into arbitration, where details were kept private. (An employee who accused Mr. Charney of choking him and rubbing dirt in his face did win the right to pursue his case in court in 2013.) Mr. Charney’s board eventually let him go as chief executive in 2014.
His lawyer, Keith Fink, said that tens of thousands of employees worked for the company while Mr. Charney built it and ran it, only a few of whom sued for harassment.His lawyer, Keith Fink, said that tens of thousands of employees worked for the company while Mr. Charney built it and ran it, only a few of whom sued for harassment.
For Ms. Carlson, who has sued only Mr. Ailes and not Fox News, there are essentially two options for resisting the secrecy Fox has tried to impose. The first is to have a court toss out the arbitration agreement altogether.For Ms. Carlson, who has sued only Mr. Ailes and not Fox News, there are essentially two options for resisting the secrecy Fox has tried to impose. The first is to have a court toss out the arbitration agreement altogether.
But she will face an uphill battle, thanks in part to a recent Supreme Court decision that enshrined the use of arbitration clauses. Judges have also cited one of the most fundamental principles of contract law to uphold the clauses: A contract, once signed, is binding.But she will face an uphill battle, thanks in part to a recent Supreme Court decision that enshrined the use of arbitration clauses. Judges have also cited one of the most fundamental principles of contract law to uphold the clauses: A contract, once signed, is binding.
Ms. Carlson’s lawyers could try to use that notion to their advantage. To defeat the clause, her legal team has argued that her contract covers only a suit against Fox News, not one against Mr. Ailes, who is not explicitly mentioned in the contract.Ms. Carlson’s lawyers could try to use that notion to their advantage. To defeat the clause, her legal team has argued that her contract covers only a suit against Fox News, not one against Mr. Ailes, who is not explicitly mentioned in the contract.
“To the extent that Ailes is a stranger to the agreement, he doesn’t necessarily get to take advantage of it,” said Matt Wessler, a principal at Gupta Wessler with extensive experience arguing arbitration cases on behalf of plaintiffs. “It’s a very significant as yet unresolved question.”“To the extent that Ailes is a stranger to the agreement, he doesn’t necessarily get to take advantage of it,” said Matt Wessler, a principal at Gupta Wessler with extensive experience arguing arbitration cases on behalf of plaintiffs. “It’s a very significant as yet unresolved question.”
Even the United States Court of Appeals for the Eighth Circuit, widely seen as one of the more conservative federal appeals courts in the country, recently invalidated an arbitration agreement on this basis.Even the United States Court of Appeals for the Eighth Circuit, widely seen as one of the more conservative federal appeals courts in the country, recently invalidated an arbitration agreement on this basis.
Ms. Carlson could also argue that the conduct she complained about had little to do with her employment relationship with Mr. Ailes and therefore shouldn’t be subject to arbitration. “She could come in and say, ‘Look, I went there to be a broadcaster, not to have this guy look at my rear end,’” said Mr. Bland, alluding to an accusation in Ms. Carlson’s complaint.Ms. Carlson could also argue that the conduct she complained about had little to do with her employment relationship with Mr. Ailes and therefore shouldn’t be subject to arbitration. “She could come in and say, ‘Look, I went there to be a broadcaster, not to have this guy look at my rear end,’” said Mr. Bland, alluding to an accusation in Ms. Carlson’s complaint.
Courts have sided with some plaintiffs who made this argument, although the alleged conduct in those cases tends to be more serious than anything Ms. Carlson has alleged.Courts have sided with some plaintiffs who made this argument, although the alleged conduct in those cases tends to be more serious than anything Ms. Carlson has alleged.
In arbitration, the rules tilt toward businesses, employment experts say. Instead of judges, cases are decided by arbitrators who sometimes consider the companies that routinely bring them business their clients, according to interviews with arbitrators.In arbitration, the rules tilt toward businesses, employment experts say. Instead of judges, cases are decided by arbitrators who sometimes consider the companies that routinely bring them business their clients, according to interviews with arbitrators.
The more times companies go to arbitration, the better they fare, concluded a 2011 analysis by Alexander J. S. Colvin, a professor at the Cornell University School of Industrial and Labor Relations.The more times companies go to arbitration, the better they fare, concluded a 2011 analysis by Alexander J. S. Colvin, a professor at the Cornell University School of Industrial and Labor Relations.
Of 3,945 employment cases decided by arbitrators from one of the nation’s biggest arbitration firms, plaintiffs won about 31 percent of them when employers had only one case before the arbitrator, according to Mr. Colvin’s study. The win rate plummeted by more than half when companies had multiple cases before the same arbitrator.Of 3,945 employment cases decided by arbitrators from one of the nation’s biggest arbitration firms, plaintiffs won about 31 percent of them when employers had only one case before the arbitrator, according to Mr. Colvin’s study. The win rate plummeted by more than half when companies had multiple cases before the same arbitrator.
Yet if a court does not invalidate the entire arbitration agreement, Ms. Carlson has a second option: persuading the judge to strike down just the confidentiality provision.Yet if a court does not invalidate the entire arbitration agreement, Ms. Carlson has a second option: persuading the judge to strike down just the confidentiality provision.
A 2003 decision by the United States Court of Appeals for the Ninth Circuit in San Francisco, which has been cited by a number of other courts over the years, held that striking down a secrecy provision of an arbitration agreement was necessary precisely because of the advantages it provides to companies being challenged.A 2003 decision by the United States Court of Appeals for the Ninth Circuit in San Francisco, which has been cited by a number of other courts over the years, held that striking down a secrecy provision of an arbitration agreement was necessary precisely because of the advantages it provides to companies being challenged.
The loss of confidentiality protection can foreshadow other developments that favor a plaintiff. In 2004, the Washington State Supreme Court threw out a confidentiality provision challenged by a worker named Therese Zuver during a disability discrimination case against her employer.The loss of confidentiality protection can foreshadow other developments that favor a plaintiff. In 2004, the Washington State Supreme Court threw out a confidentiality provision challenged by a worker named Therese Zuver during a disability discrimination case against her employer.
While the court still required the two sides to go through arbitration, the narrower victory appeared to be more than merely symbolic. According to Ms. Zuver’s lawyer, Mitchell Alan Riese, the case never did make it to arbitration. The company settled after the state Supreme Court handed down its decision.While the court still required the two sides to go through arbitration, the narrower victory appeared to be more than merely symbolic. According to Ms. Zuver’s lawyer, Mitchell Alan Riese, the case never did make it to arbitration. The company settled after the state Supreme Court handed down its decision.