When an estimated 20 percent of Google's global work force walked off the job this month in protest of the company's handling of sexual harassment, they had several demands. But the first one was this: an end to forced arbitration, the agreement employees signed that obliges them to settle sexual harassment and discrimination claims in front of a private arbitrator rather than in court.

Last week, Google announced that it was ending that policy. It also ended the policy that forbade sexual harassment victims from bringing a companion or representative for support when discussing their complaints with HR--another change protesters demanded.

The following day, Facebook, which had a similar policy--that it defended as "official and appropriate" last year--announced that it was ending its forced arbitration policy as well. Microsoft, Uber, and Lyft all ended similar policies in the past year. But Google and Facebook's changes are significant, not only because they are "FAANG" companies (Facebook, Amazon, Apple, Netflix, Google), the most high-profile companies in Silicon Valley, but also because both are companies that have traditionally been very careful--almost fanatical--about keeping nearly everything they do confidential, a practice that goes way beyond new product ideas and designs and also covers internal policies, aspects of corporate culture, and much more.

Based on the dramatic success of these companies, it might be that keeping everything secret is good for the bottom line, at least for a while. But that culture of secrecy, which pervades Silicon Valley and corporate America in general, allows employers to ignore the fact that they have an overwhelmingly white male workforce. They can also hide behind secrecy to avoid publicly disciplining powerful men who sexually harass or assault women--something The New York Times made very clear in a scathing exposé of Google that touched off the protests.

Google CEO Sundar Pichai first responded to the article by sending out a memo that said Google had fired 48 executives because of harassment complaints and had lots of resources in place to help victims of sexual harassment. When that clearly wasn't good enough, he sent out a second memo that apologized and promised to support the protesters. In that second memo, he said Google would change its ways but stopped short of acquiescing to any of the protesters' specific demands. Given the company's longstanding practice of keeping nearly everything confidential, it's easy to see why he didn't want to.

17,000 unhappy employees.

But. Seventeen thousand employees reportedly walked off the job during the protests and even for Google, that's a lot of people. Pichai must have decided it was better to make some big changes than risk alienating a large portion of its workforce. Most likely, his biggest fear is not further protests but the loss of Google's cachet as a wonderful, enlightened workplace--something that helps the company tremendously when it comes to fighting for high-tech talent. Facebook is a rival employer, which is almost certainly why that equally secretive company announced its policy change 24 hours later.

The protest's organizers point out that, while the changes amount to real progress, Google is still ignoring some of their demands--particularly those that would systemically increase Google's diversity and change its culture rather than just deal more fairly with sexual harassment. Among those further demands: That the chief diversity officer report directly to Pichai; that Google make a real commitment to greater diversity in its workforce; that an employee representative be added to the board; and that Google take concrete steps to end the persistent pay gap between men and women.

Even so, Google's and Facebook's changes are a very, very big deal. As The Wall Street Journal noted, forced arbitration remains the norm in U.S. companies large and small, and one study found that more than half of American employees are bound by arbitration agreements. But in the high-tech industry, they're disappearing fast. Airbnb and eBay are the latest to confirm that they are ending their forced arbitration policies. And some companies, including Pinterest, Oath (the newly combined Yahoo and AOL, owned by Verizon), Twitter, and Reddit, are proud to say they never had them.

If this trend continues throughout the tech industry, employers who keep demanding forced arbitration may start losing talent--especially female talent--to those with more enlightened policies. In other words, it looks like Silicon Valley may be doing what it's done so many times before--disrupting an outdated model that should have gone away long ago.

Published on: Nov 13, 2018
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