Two Sexual Assault Survivors Spur Airbnb Arbitration Turnaround

(Bloomberg) — By Olivia Carville

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.

It kind of makes me angry. Feels like a runaround, and I’m the one stuck in the middle, being retraumatized over and over again.

Sheey Dooley, from Oregon

Arbitration is “one of the ways large corporations exert power and control over survivors,” said Latifa Lyles, vice president for advocacy and survivor initiatives at the anti-harassment organization Time’s Up.

Some companies distanced themselves from mandatory arbitration during the MeToo movement. Starting in 2017, Microsoft Corp., Google, Facebook Inc. —and Airbnb— removed binding arbitration requirements for sexual assault and sexual harassment claims filed by employees. Uber Technologies Inc. and Lyft Inc. went even further, changing their terms of service to allow passengers and drivers to file such cases in court.

Uber’s change came in May 2018 after 14 women who claimed they’d been sexually assaulted by the company’s drivers wrote a letter to the board calling for the right to file claims in court. Chief Legal Officer Tony West said it wasn’t an easy decision. “We knew when taking these steps that we were taking on legal risk,” he said in an interview last week. Uber updated its terms of service to reflect the change because “we wanted to be absolutely clear that we meant what we said,” West said. Companies need to be “very public and very full-throated” about it to communicate to survivors that they have the right to sue.

Jeanne Christensen, a lawyer at Wigdor LLP who represented the 14 women, said she had hoped after Uber made the change that sharing-economy peer Airbnb would do the same. Airbnb’s business model, like Uber’s, is largely based on strangers meeting online and trusting one another enough to exchange money and connect offline.

Airbnb says it did follow suit in 2019. It just didn’t tell anyone, including its own safety team, the elite internal group that handles sexual assaults and violent crimes inside platform listings, according to two former safety agents. One, a former policeman who worked at the company from May 2018 to July 2020, said he raised concerns about the use of forced arbitration with management on numerous occasions. He said he had no idea Airbnb had stopped using the arbitration provision in sexual assault cases in 2019.

Neither did Dooley or her lawyer. Dooley said she used Airbnb to rent the upstairs unit of a two-story house in Colima, on Mexico’s central Pacific coast. The property had five-star reviews and was operated by a superhost, a badge of honor the company bestows upon its most experienced and trustworthy hosts. Dooley was asleep in the apartment when a man climbed an ungated exterior staircase and entered through a window that she said didn’t properly lock. The intruder threatened to stab her with a fork, attempted to sodomize her and “in a brutal fashion, repeatedly and forcibly raped her,” according to the lawsuit Dooley filed against Airbnb and the host in an Oregon state court in May 2020.

The lawsuit says neither Airbnb nor the host properly investigated the security of the property. It says the company, which promotes itself as a safe platform, should have known that its “claims regarding safety were misleading and a misrepresentation of the truth.”

Hours after the attack, Dooley said, she Googled “Airbnb and rape” and nothing came up. So, she emailed Airbnb Chief Executive Officer Brian Chesky, telling him what had happened and asking for help. A representative from the safety team reached out soon after, offering to refund the cost of her trip, pay for her flight home and cover any health or counseling expenses, she said.

No one has been arrested, and local police are still investigating, according to Dooley’s Mexico-based lawyer Maria del Carmen Mata Magallanes. Airbnb deactivated the listing, but it didn’t ban the host because “he is not accused of wrongdoing,” Breit, the company spokesman, said. A lawyer for the host didn’t respond to a request for comment.

Four months after the lawsuit was filed, and more than a year after Airbnb said it stopped enforcing the arbitration clause in sexual assault cases, a lawyer representing the company said Dooley had to take the matter to arbitration. “To be clear, it is Airbnb’s position that your client is required to arbitrate her claims,” Klarice Benn, an attorney at the Abbott Law Group in Portland, Oregon, wrote to Dooley’s lawyer, Robert Callahan, last September, according to an email seen by Bloomberg. Benn threatened to file a motion to compel arbitration if Dooley didn’t go along with the move.

Dooley agreed to shift the case to arbitration. Now, Callahan said, he and his client feel “played and deceived.” To him, the company’s message was clear. “Everything Airbnb did through its counsel was perceived as blocking our access to the courts and moving us to arbitration,” Callahan said. He said the company is using “Orwellian double-speak” when it says it hasn’t enforced the arbitration clause in court since January 2019. “They can’t say upfront that they changed this when their actions are just the opposite.”

Benn didn’t respond to emails, and Airbnb declined to comment about how it handled the case.

With her lawsuit shunted to arbitration, Dooley’s claims, like those against many other online service providers, will never be heard in court. “I had no idea when I clicked on that terms of service that I was clicking away my rights,” she said.

Everything Airbnb did through its counsel was perceived as blocking our access to the courts and moving us to arbitration

Robert Callahan, Sheey Doolan's lawyer

Neither did Natalie White. She sued Airbnb last month in Superior Court in Los Angeles, as well as the host who rented her a one-bedroom apartment, claiming she was sexually assaulted there in February 2020. White, who lives in Atlantic City, New Jersey, says in her lawsuit that the host, an actor named Zafer Alpat, barged into the apartment as she was packing to leave, pinned her down, and licked and kissed her while she resisted.

Alpat was arrested and charged with assault to commit a felony and false imprisonment by violence. He has pleaded not guilty to both counts and faces a preliminary hearing next month, according to the Los Angeles County District Attorney’s Office. Alpat declined to comment because of the pending litigation, his lawyer Daniel Titkin said in an email.

White said in a statement sent by her lawyer, Greg Kirakosian, that she rented a room through Airbnb believing it was safe to do so. “Unfortunately, I could not have been more wrong,” she said in the statement, which was written before the company announced its change of policy. Private arbitration is “silencing my voice as well as the voices of other victims,” White wrote. “I beg you, do not silence our stories and our quest for justice.”

Kirakosian praised Airbnb for listening to White’s plea. But he said the company needs to go further. “Our ultimate objective,” he said in an email, “is for Airbnb to make fundamental changes to their policies toward prevention of, and protection from, sexual assault.”

Breit, the Airbnb spokesman, said the company worked hard to support White after she reached out. He said the host, who had raised red flags for cleanliness and personality conflicts with previous guests, was barred from the platform. As for her lawsuit, Breit said, the choice of whether to arbitrate or not will be left to her.