Bill Would Allow Workers to Sue Over Harassment : Workplace: Under the congressional measure, arbitration in sexual harassment cases would be optional instead of mandatory.

A bill introduced Wednesday would give workers on Wall Street and elsewhere the right to sue their bosses over sexual harassment and other disputes instead of having to go to arbitration.

Rep. Patricia Schroeder (D-Colo.) said the bill was partly prompted by “disturbing reports about the handling of sexual harassment by the securities industry.” She cited an article in the Wall Street Journal that described how a woman lost a sexual harassment claim in arbitration even though her boss physically threatened her and threw condoms on her desk.

Schroeder said the bill she is sponsoring is aimed at restoring employees’ rights to a fair hearing in employment disputes.

The bill would amend seven federal laws, including the 1964 Civil Rights Act, to prevent employers from forcing workers to resolve employment discrimination claims through arbitration.

Workers could still voluntarily choose arbitration, but they would have the option to pursue their grievances in court.

In arbitration, two sides choose an independent person or panel and agree that the intermediary’s decision will resolve their dispute. In theory, arbitration can be faster and less expensive than court proceedings.

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The National Assn. of Securities Dealers, an industry self-policing group, requires stockbrokers and other salespeople to agree to submit any employment disputes to arbitration as a condition of obtaining an NASD license.

Another sponsor of the bill, Rep. Edward Markey (D-Mass.), said a number of other industries began making similar requirements following a 1991 Supreme Court decision on age discrimination, known as Gilmer vs. Interstate-Johnson.

The court held that workers may be barred from suing their bosses for alleged age bias if the employees previously agreed to submit such claims to binding arbitration.

“In essence, what we’re doing is reversing the Gilmer decision and saying you cannot make employees give up their federal rights at the time they are hired,” Schroeder said.

Markey also said the racial and gender makeup of securities arbitrators don’t reflect the gender and racial diversity of the work force. A General Accounting Office report earlier this year said 89% of arbitrators were men and 97% were white.

Richard Myers, a NASD spokesman, said that in sexual or racial discrimination cases, the association looks for arbitrators of the same sex or race as the employee.

“Arbitration has proven to be a very fair process for all involved, and it has worked well,” Myers said. He had no immediate comment on the proposed bill.

The Securities Industry Assn., Wall Street’s main trade group, said that while it doesn’t agree with the proposed bill, “we do believe the existing system can be improved.” The association said in a statement that it supports better education and training of arbitrators.