Rivian wants to force arbitration in sexual harassment case, despite new law prohibiting it
Congress this year passed a new law that means employers can no longer force their employees into arbitration to resolve claims of on-the-job sexual harassment or assault. Advocates say the change gives workers freedom to decide what legal path works best for them – and to speak out publicly if they so choose.
The electric automaker Rivian wants to force arbitration anyway.
The dispute is partly about timing. A former Rivian employee has sued the company in federal court, alleging she was harassed and groped by co-workers at the Rivian plant in Normal. She says it happened multiple times between December 2021 and April 2022, and that Rivian failed to stop it.
In a new court filing, Rivian says it wants to force the woman to drop the lawsuit and instead resolve her claims through private arbitration, away from the public eye. Even though the new law went into effect March 3, Rivian says the woman’s claims “accrued” before that day, meaning the new law doesn’t apply.
Rivian’s legal strategy has raised eyebrows among lawyers and advocates who cheered passage of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA).
“This is precisely the kind of matter to which this legislation was directed,” said Laurel Bellows, a business lawyer at Chicago-based Bellows Law Group.
The dispute comes after two years of rapid hiring at Rivian’s Normal plant that has added 6,000 workers in the past two years as it’s ramped up production of electric trucks, SUVs and delivery vans. It’s now Bloomington-Normal’s second-largest employer, behind only State Farm.
What the woman alleges
The woman was hired on the battery team at Rivian in December. (WGLT does not typically name victims in court cases such as this.)
The woman said she subjected to “offensive and derogatory comments by her male coworkers, such as being asked where she liked to have sex, her favorite sexual positions, and being told that a male co-worker was making bets that he could have sex with her,” the lawsuit claimed. She says an engineer groped her in April.
The woman stopped going to work about a week after the alleged groping, the lawsuit said. She says she told many others in the company, including those in HR, about the alleged harassment.
When she was first hired, Rivian said the woman signed a three-page “Mutual Agreement to Arbitrate Employment-Related Disputes.” In its filing last week, Rivian says that means the woman can’t sue and must go through arbitration instead. That’s despite the lawsuit being filed Sept. 6, three months after the enactment date of the new law restricting forced arbitration.
Rivian’s argument is that the woman’s claims “arose and accrued” – two key legal concepts – long before March 3, when EFAA was enacted.
“That Plaintiff may have alleged one instance of harassment post-March 3, 2022, does not change the conclusion that her claim belongs in arbitration, as her claim accrued before March 3, 2022,” wrote Rivian lawyer Sharilee Smentek, with Chicago-based Seyfarth Shaw LLP.
Attorneys sometimes like to test out new laws like this, said Kristen Prinz, an employment lawyer and managing partner at Prinz Law Firm in Chicago. She doesn’t think Rivian has a strong chance of successfully forcing arbitration, given the new law.
“I think the law is actually pretty clear. This made me go back and double check the law, because I had understood it to be so clear. And it really is clear. It’s about when the case is filed,” Prinz said.
Rivian declined to comment further on the merits of the lawsuit.
“At Rivian, we expect all our employees to treat each other with dignity and respect and do not tolerate harassment or discrimination of any kind,” the company said in September. It issued the same statement this week when asked by WGLT to comment on the forced-arbitration issue.
Passing the new law
EFAA passed Congress with bipartisan support and it was signed into law by President Biden in March. It was expected to impact the employment contracts for more than 60 million Americans.
The law gives individuals a choice between going to court or going to arbitration to resolve allegations in cases related to sexual harassment or assault. The measure also is retroactive — invalidating any existing forced arbitration clauses in ongoing cases that could make it difficult for any survivors to litigate cases against their employers, NPR reported in February.
One of the chief sponsors of the law was retiring U.S. Rep. Cheri Bustos, whose 17th Congressional District includes parts of central Illinois.
“The goal of the legislation is simple: to provide survivors every option available to seek justice, including pursuing their claim in court," Bustos told WGLT. "The law is intended to apply to every claim of sexual assault or sexual harassment that falls under an arbitration agreement, regardless of when the abuse occurred, as long as alternative legal proceedings have not been entered into already. While I am not able to comment on ongoing legal matters, any company seeking to silence an employee by forcing their claim into closed-door arbitration proceedings should ask themselves why they’re afraid to stand before a judge.”
Businesses tend to prefer arbitration – rather than facing lawsuits in open court – for several reasons. Arbitration gives employers more control, and the private proceedings are shielded from public view, said Sharmili Majmudar, executive vice president of policy, programs, and research at Women Employed, a Chicago-based nonprofit advocacy group.
The arbitrator might not be as knowledgeable, objective or as experienced in judging credibility and evidence as a judge in a courtroom, added Bellows, the Chicago business lawyer.
“The vast majority of the time, when mandatory arbitration is used, workers lose. About 80% of the time, the employer prevails. So it is a process that favors employers,” Majmudar said.
Sometimes, a plaintiff may prefer arbitration, especially if they don’t want the situation to be publicized, said Prinz.
“There are plenty of people who want privacy and who don’t want others to know they’re filing a claim, because maybe they think that could limit their future job prospects,” she said.
But Majmudar said that should be their choice.
“It should be one of the options available, as it relates to a legal path forward, as opposed to being forced to take it,” Majmudar said.
Prinz said Rivian’s move is telling.
“They clearly aren’t just concerned about privacy, because it’s already in federal court which is a very public forum. The fact that they’re pushing to have this removed (to arbitration) shows that they think a different forum is probably gonna be more favorable to them,” Prinz said.
The lawsuit remains pending in federal court.