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Md. House considers removing arbitration clauses for sexual harassment claims

The Statehouse building in Annapolis, (Maximilian Franz / The Daily Record)

The Statehouse building in Annapolis, (Maximilian Franz / The Daily Record)

With the rise of the #MeToo movement and heightened awareness about sexual harassment in the workplace, the General Assembly is weighing bills that would outlaw provisions in an employment contract or policy waiving the right to a legal remedy for sexual harassment claims.

“It has become apparent that sexual harassment affects women of all classes and all levels of the workforce,” said Del. Kriselda Valderrama, D-Prince George’s, in a hearing before the House Economic Matters committee last week.

Del. Kriselda Valderrama, D-Prince George’s

Del. Kriselda Valderrama, D-Prince George’s

Forced arbitration agreements and nondisclosure agreements employees may have to sign when accepting a job force those who are sexually harassed to forgo their rights to a formal legal proceeding, Valderrama said.

“Silence is not the friend of truth,” she said.

House Bill 1596, which Valderrama is sponsoring, also would prohibit an employer from taking adverse actions against an employee who refuses to enter an agreement that contains a waiver. Employers with more than 50 workers also would submit a report to the Maryland Commission on Civil Rights on sexual harassment settlements. The commission would have to make the reports available online.

The House is also considering HB 1239, which also targets contractual waivers but does not have a reporting requirement with the civil rights commission.

“This is for individuals who, in a sense, are precluded by contract from doing anything but arbitration,” said Del. C.T. Wilson, D-Charles and the bill’s sponsor, during a hearing last week.

Employment lawyer Kathleen Cahill, who specializes in sexual harassment cases, said private arbitration proceedings “dramatically further tilts the table against victims of sex harassment and sexual assault in the workplace.”

The state’s court system is “open to all equally and it’s an open forum open to the public where people are held accountable publicly,” she added. “Arbitration is the exact opposite. It’s pay as-you-go, which immediately starts tilting the table.”

Cahill, a Towson solo practitioner, said she would support the bills provided there is a clear distinction between waiving procedures and remedies and waiving specific claims altogether. She also supports the reporting requirements.

“It advances the objectives of deterring such misconduct and providing notice of repeat offenders and compensating victims fairly to remove mandatory arbitration from the tools of the employer,” she said.

HB 1596 has drawn support from both women’s rights advocates, including the Maryland Coalition Against Sexual Assault and the Women’s Law Center of Maryland, as well as the pro-business Maryland Chamber of Commerce.

Lisae C. Jordan, executive director and counsel at the Maryland Coalition Against Sexual Assault, told the House committee the proposal will turn talk into action.

“This bill will actually do something,” she said. “People expect the Maryland General Assembly to act now.”

The chamber, meanwhile, supports the bill with amendments so it does not preempt the Federal Arbitration Act and only applies to sexual harassment cases, Lawrence A. Richardson Jr., the organization’s vice president of government affairs, said Friday.

“We recognize there’s a concern out there. We want to help to be part of a solution to a problem,” Richardson said Friday, adding the chamber wants to “maintain the intent of what the sponsors want to do.”

Michelle Siri, executive director of the Women’s Law Center of Maryland, drew parallels between sexual harassment in the workplace, domestic violence and the #MeToo movement.

“In employment matters it’s important to keep in mind that there is an imbalance of power,” Siri said, in reference to why employees often sign contracts with arbitration provisions.

Valderrama’s bill has also been cross-filed in the Senate. Senate Bill 1010 is scheduled to be taken up by the Senate Finance Committee on March 15.

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