We reported in SAA 2021-22 (Jun. 10) that Goldman Sachs was rethinking predispute arbitration agreement (“PDAA”) use in the employment realm. Specifically, the firm on June 4 announced that it was yielding to a shareholder proposal that it review the firm’s employment arbitration policy. Goldman Sachs Issues Statement on Arbitration Policy Review, states: “We are appreciative of the dialogue we have had with our shareholders in recent months on the issue of employee arbitration. Providing our employees a safe and inclusive workplace that is free of discrimination and harassment is among our highest priorities. In consideration of the feedback we have received, as well as the results of the recent shareholder vote at our Annual Meeting, we believe it is appropriate to undertake a review to assess this issue comprehensively. We look forward to sharing further information with our shareholders once this review is completed.”
Scope and Methodology
Goldman’s Board retained Steptoe & Johnson LLP (“Steptoe”), to: advise on whether Goldman Sachs’ arbitration program negatively impacts employees’ ability to seek redress of discrimination or harassment and whether the confidential nature of arbitration proceedings increases the prevalence of workplace misconduct.” Steptoe in turn engaged Professor Samuel Estreicher, Director of New York University School of Law’s Center for Labor and Employment Law and Co-Director of the Institute of Judicial Administration, to assist. Steptoe and Prof. Estreicher: “conducted a comprehensive review of Goldman Sachs’ arbitration program covering a period of approximately six years.”
Findings: Arbitration Policy is Not Harmful …
The review is now completed, and the five-page Goldman Sachs’ Report on Review of Arbitration Program concludes thate arbitration is still the way to go. Based on the review, the Board: “has determined that, for Goldman Sachs, arbitration remains the better way to resolve disputes between employees and the firm. Importantly, as described further below, the firm’s review established that the general concerns raised about the use of arbitration agreements are not applicable to Goldman Sachs’ arbitration program or experience.” How so? Continues the Report: “There is no indication the current program is negatively impacting employees’ ability to seek redress of alleged discrimination or harassment, or that it is increasing the prevalence of discrimination or harassment in the workplace. There also is no sign Goldman Sachs’ arbitration program is in any way being used to cover up incidents of discrimination or harassment, protect perpetrators or encourage recidivism.”
… But Changes are Coming
The Report continues: “Nevertheless, the firm takes seriously the shareholder concerns, which are genuine and strongly held. Accordingly, the Board has directed management to institute enhancements to the firm’s arbitration program for the purpose of further increasing transparency and accountability including: (1) regular reporting to the Board on sexual harassment matters; (2) regular periodic assessments of the firm’s arbitration program; and (3) waiving confidentiality of arbitration decisions on sexual harassment claims at the option of the employee.” The Report offers this elaboration: “Namely, the General Counsel will report to the Board on any material complaints of sexual harassment. The firm also will undertake a periodic assessment of the arbitration program, which will include analyses of arbitration experiences and litigations brought by employees since the December 2021 prior review, as well as a report to the Board on the assessment, and recommendations of program enhancements, or a recommendation to change the program if warranted. Finally, while the firm believes that the confidentiality of arbitration proceedings benefits all parties, employees who assert a claim of sexual harassment in an arbitration will have the option to waive confidentiality as to the arbitration decision on the claim in the event it will not already be made public under the applicable forum rules” (footnotes omitted).
(ed: *Kudos to Goldman for following through on its commitment to evaluate its employment arbitration policies and for sharing the results. **The waiver of confidentiality aspect is interesting.)
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