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How Uber can permanently regain trust

This week, Uber has taken steps to let employees – and the broader world – know that it’s taking steps to address its cultural failings as a company.

The impetus, of course, is the now widely read account of former Uber software engineer Susan Fowler Rigetti, who wrote over the weekend about the sexual harassment she endured during her year with the company, and her astonishment that Uber’s HR department repeatedly dismissed her well-documented claims in favor of keeping her manager on board. Rigetti – now an engineer at the payments company Stripe — describes her story as “strange, fascinating, and slightly horrifying.”

To Uber’s credit, the company quickly recognized that it’s far more serious that that. As Rigetti’s account spread like wildfire, Uber stole a page from Airbnb’s playbook and announced it had hired former U.S. attorney general Eric Holder to help lead an investigation into her claims. (Holder worked with Airbnb to craft anti-bias policies after the platform was accused of allowing discriminatory behavior by guest hosts. Based partly on his recommendations, the company later announced a new nondiscrimination policy, among other initiatives.)

CEO and cofounder Uber Kalanick also apologized earlier today to employees for not adequately addressing their complaints and for a lack of diversity at the company.

Reportedly, he did so with Uber board member Arianna Huffington and the company’s new head of HR, Liane Hornsey, by his side at Uber’s San Francisco headquarters, and he had tears in his eyes.

It’s a great start. Here’s an even bigger idea: Uber should allow its employees — at least those whose rights have been violated under Title VII of the Civil Rights Act, which prohibits employers from discriminating on the basis of sex, race, color, national origin, and religion — to join class-action lawsuits and otherwise fight the company in court.

Why is this important, and why would a company as valuable as Uber do this? Because it would be the strongest signal to date that Uber cares about its employees’ civil rights.

It helps to take a step back and look at the bigger picture. Weknow about Rigetti’s situation not because she sued Uber but because she wrote a post to detail the shenanigans she says she experienced as an employee.

Rigetti hasn’t responded to a request from TechCrunch asking whether she ever considered suing Uber. But if she did and decided against it, it wouldn’t be a surprise. Among other general reasons not to sue an employer — including the emotional toll and the financial costs involved — Uber forces employees into arbitration.

If you aren’t familiar with the term, it’s a maneuver designed to move a lawsuit off its path toward a courtroom and onto the desk of an adjudicator, whose verdict is legally binding and completely confidential.

Uber is far from alone in employing the tactic. Employment attorneys say that something like 80 percent of tech companies compel their employees into arbitration, including because it prevents employees from joining together to fight a company. Indeed, last September, Uber’s arbitration agreements were largely ruled by an appeals court to be valid and enforceable, which means that drivers now have to take any disputes to private arbitration, where the company can fight them one-on-one.

Worse for employees: arbitrations tend to favor businesses, with arbitrators commonly considering companies their clients.

From a business standpoint, it’s very easy to understand the company’s logic. But Uber — which became known early on forbullying tactics and has been trying for years to soften its image — could send a powerful message by carving out an exception to this rule for any employee who has been sexually harassed, racially discriminated against, or whose civil rights have otherwise been violated at the company.

It’s not so crazy as it sounds.

In 2014, President Obama signed an executive order mandating that companies wanting to bid on federal contracts valued at $1 million or more can no longer require their employees or independent contractors to waive their right to a jury trial for discrimination, harassment or sexual assault claims. And that was after Congress had already passed a law barring military contractors from requiring arbitration in such cases.

Is it scary? Yes. Does it potentially expose Uber to far more in reputational and financial damage? Yes. Then again, Kleiner Perkins Caufield & Byers tried to force former partner Ellen Pao into arbitration in her famed gender discrimination lawsuit against it, Kleiner failed in that effort, and Pao wound up losing her case against Kleiner in one of the most closely watched trials in Silicon Valley. The drawn-out case weakened Kleiner, which seemed to have some HR issues of its own. But if a company is on the right side of the law, it should have nothing to fear.

Besides, drastic times require drastic measures. Aimee Lucido, a software engineer who works at Uber currently, wrote yesterday that she is staying at Uber because she feels like the work she is doing at Uber is important. But she also called Rigetti’s account “disgusting and appalling and horrifying,” and adding that she was “not surprised at all” by it.

“This incident is not isolated to Susan Fowler, SREs, or even Uber. This is everyone’s problem.” And Uber can use what’s happening as the opportunity to address it.

Hiring Holder was smart. So was bringing in Hornsey — a longtime VP at Google and most recently an operating partner at SoftBank — to professionalize its HR structure at long last. “The long term health and wealth of a workforce depends on holding all employees acountable for workplace rules,” observes employment attorney Joseph Sellers of Cohen MIlstein in Washington. “When exceptions are tolerated, they undermine the rules and promote a disrespect of them.”

But most valuable privately held company in the world has a chance to do much more — for itself and for the broader industry — by acting against the widespread practice of blocking employees from court and forcing them into private arbitration.

Clif Palefsky, a San Francisco-based employment attorney, likens the moment to what happened in the security industry in 1998, when the SEC declared that brokerage industry employees would no longer be required to arbitrate claims of employment discrimination before industry panels. It didn’t do away entirely with gender bias on Wall Street, of course. But it has made a “huge difference,” Palefsky insists.

Why shouldn’t Uber be the company to become known for leading the charge in the tech industry? It’d be a whole lot better than the associations that spring to mind today.

Featured Image: Uber