Juno Sex-Harassment Case Heads for Arbitration

SAN FRANCISCO (03/09/2000) - Software engineer Lori Park's claims of sexual harassment and gender discrimination at Juno Online Services will be heard by a panel of arbitrators, not by a jury of her peers, a New York judge has ruled.

A Juno lawyer praised the decision, disclosed Monday, and said it sends a message to all workers that courts will enforce arbitration agreements required by employers as a condition of getting a job. But an expert on employment law cautioned that the ruling is not necessarily a major setback for Park, who last fall became the to sue Juno for sexual harassment. Park says she felt pressured to stay in a sexual relationship with a senior male company official.

Her suit claims that Juno fostered a workplace climate hostile to females and that she was "harangued and abused" when she complained to Juno's human resources department about the conduct of certain company officials. Park, who joined Juno in 1998, signed an employment agreement containing a provision stating that any claim, controversy or dispute arising out of her job shall be settled by arbitration.

A year and a half later, she signed an amendment to the agreement containing the same clause. She said she became romantically involved with Juno's senior vice president, Matthew Battles, who allegedly turned physically abusive and threatened to have another manager at the company fire her if she ended their relationship. The manager, Mark Moraes, also is named in the suit. Park finally was forced to quit because of emotional distress, her suit states.

The arbitration process removes the case from official court channels and places it in the hands of private judges from the American Arbitration Association. Hearings are less formal than courtroom sessions though witnesses are sworn to tell the truth and both sides are represented by lawyers. The decision means that Park's lawsuit is put on hold until the arbitrators rule.

Then the judge typically will agree to enforce the ruling. "It's a procedural defeat, but it doesn't signal any weakness in her claims," said Hillary Richard, a Manhattan plaintiff's lawyer who brought a high-profile sexual harassment case against Spin magazine four years ago. "The concern is that instead of a jury, you're going to be judged by arbitrators, who are mostly older white males." Richard added that the decision does not come as much of a surprise. "If you sign an arbitration agreement," she says, "you waive your right to prosecute your claims in court. [Park's] lawyer alleged that she signed as a result of fraud or duress, but those arguments are very rarely successful."

Juno attorney Terri Ross said Wednesday that the ruling could work to everyone's advantage. "This is a victory for because it has precedential value for all arbitration clauses, but arbitration for both sides is a much more cost-effective forum for settling disputes," she says That's because less time and money is spent on investigating matters in advance of the arbitration hearing and because arbitration rulings are final, with no right of appeal.

Juno wanted arbitrators to hear the case to avoid the possibility of a runaway jury awarding big damages, Ross acknowledged. "The other side wanted a jury trial because juries tend to be driven by emotion, and they tend to award higher damages," she says. "Arbitrators aren't swayed that way."

One feature of arbitration that may favor Juno is that proceedings are sealed, so dirt slung by either party remains off any official record. "They love the closed-door setting," charged Park's lawyer, David Jaroslawicz. "They'll be delighted to keep everything confidential." But that aspect also could work to Park's advantage. In one document filed with the judge before her decision, Juno included a transcript of an e-mail with embarrassing content allegedly sent by Park.

Such material would not become public under arbitration rules. Park, who now works at Google, a search engine in Menlo Park, Calif., did not immediately return a phone call requesting comment. Jaroslawicz, complained that the system is unjust. "It's unfair to have people sign arbitration agreements in advance," he said in New York. "Sure she signed - she had no choice if she wanted the job." Jaroslawicz said he'll try to ensure that the panel includes a younger woman or man though arbitrators often are retired judges or senior partners in law firms. "Ideally, we'll find someone who understands the culture of the Internet," he says.

He also represents former Juno worker Lisa Bongiorno, who is believed to be the first to bring such claims against a Net company when she sued Juno last June.

Although her suit was filed before Park's, Juno's effort to have Bongiorno's case moved to arbitration has not yet been decided.

A complicating factor in Bongiorno's suit is that Juno tried to negotiate a confidential $15,000 settlement and then asked a judge to enforce the deal, Jaroslawicz said. "It fell apart because Juno wouldn't agree to an apology and to some changes in their workplace policies," he asserts. But by choosing to take the disputed deal to court, Juno might have given up its right to arbitration in Bongiorno's case, he said. The case remains before another New York judge, who has yet to rule on the whether the settlement should stand and, if not, whether Bongiorno's harassment claims also should go to arbitration.

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