Airbnb dodged a potential class-action lawsuit Tuesday when a federal judge ruled that the company’s arbitration policy prohibits users who say they were discriminated based on their race from suing the company.
The case began in May when Gregory Selden, who is African American, claimed that an Airbnb host would not rent him a room because of his race.
Airbnb was already facing pressure after a working paper by Harvard University researchers in December found it was more difficult for guests with African American-sounding names to rent rooms on the site.
But on Tuesday, a federal judge said that Airbnb was covered by its user agreement, which says disputes must be settled through private arbitration, the New York Times reported.
As long as those arbitration details are made clear to customers, they are “enforceable, in commercial dispute and discrimination cases a like,” according to the ruling by Judge Christopher Cooper of The United States District Court for the District of Columbia.
The decision means Airbnb most likely won’t be caught up in a high-stakes legal battle over the issue. The same can’t be said about its operations here in New York, where Airbnb is suing officials after Gov. Andrew Cuomo passed a law that will fine users who advertise illegal short-term listings.
City officials have said they will not enforce the new law while Airbnb seeks a temporary injunction as part of its lawsuit against city and state officials. Airbnb has been in talks with city and state officials to settle the suit.
The San Francisco-based startup made a few moves in September to help thwart discrimination that include making hosts agree to a new nondiscrimination policy. The firm had hired former Attorney General Eric Holder to advise it on the issue.
“We have launched an aggressive effort to ensure our platform is fair for everyone, and we will continue to work as hard as we know how to fight bias,” a representative for Airbnb said in a statement. [NYT] – Rich Bockmann