For Sherry Dooley, Airbnb Inc.’s announcement last week that it would no longer force guests into confidential arbitration to settle claims of sexual assault was disturbing. For Natalie White, it means she may get her day in court.
Both women filed lawsuits against the company in recent months claiming they were sexually assaulted inside properties rented on Airbnb. Dooley, a 55-year-old food-truck worker from Oregon, says she was raped by an intruder in an apartment in Colima, Mexico, in 2019. White, a 23-year-old medical student from New Jersey, says she was attacked by a host who tried to tear off her clothes in Los Angeles last year.
The women decided to speak publicly for the first time to call on the company to remove a longstanding forced-arbitration clause in its 10,000-word terms of service that neither of them said they were aware of when they used the platform. They said arbitration would silence their voices and keep the issue of sexual assault at Airbnb listings hidden.
Airbnb said on Friday, after being informed of the women’s statements, that it would change its terms of service this fall to no longer require arbitration in cases involving the sexual assault or sexual harassment of guests and hosts. It also said it hasn’t enforced the policy since January 2019, although it didn’t make any announcement at the time or change the terms of service that its 150 million users must accept to register on the site.
That the company said it stopped using the binding arbitration clause in sexual abuse cases two years ago came as a surprise to Dooley. She agreed to shift her lawsuit into arbitration last September after a lawyer for the company threatened to file a motion in court enforcing the terms of service. “It kind of makes me angry,” said Dooley. “Feels like a runaround, and I’m the one stuck in the middle, being retraumatized over and over again.”
The announcement came after a Bloomberg Businessweek investigation of violent crimes, including rapes, at Airbnb listings. That story highlighted the lengths the home-share company will go to keep such incidents quiet -- sometimes spending millions of dollars on settlement payouts and using the binding arbitration clause in its terms of service to block users from filing claims for damages in court. Only one case related to sexual assault had ever been filed against Airbnb in U.S. courts, the investigation found, after a review of electronically available state and federal cases since the company’s founding in 2008.
Ben Breit, an Airbnb spokesman, declined to comment about why the company waited until last week to announce it would update its terms of service to reflect the policy change. He said sexual assaults in Airbnb listings are “extremely rare.”
The use of forced arbitration has become a flashpoint in corporate America in recent years. The practice was established almost a century ago as a way for businesses to resolve conflicts without clogging the courts. By the 1990s, it had expanded to include consumer and employee disputes. Supporters say it’s a faster and cheaper way to settle disputes than through the courts. Critics say it favors companies because they get to set the terms and the outcomes are secret.