Facebook announced the decision on Friday with critics saying that the process was shielding executives accused of misconduct from the scrutiny they would face from a jury and silencing victims.
The policy change will allow Facebook employees to pursue sexual harassment claims in court.
"This is a pivotal moment for our industry and corporate America more broadly," Lori Goler, a Facebook vice president of Human Resources, said in a statement. "We think this is the right thing to do and hope other companies do, too."
Google CEO Sundar Pichai had similarly announced Thursday that the company would end a policy requiring employees submit sexual harassment claims to arbitration after protests last week with 20,000 employees walking out. Microsoft had similarly ended its arbitration policy about a year ago and Uber about six months ago.
Employment lawyer Chris Baker said that the technology firms moving away from forced arbitration may have a spillover effect on other kinds of employee disputes.
"I think it's the pebble that starts the avalanche," Baker said. "This is very meaningful."
The Google protests last week were sparked by a New York Times report on Oct. 25 revealing that executives were paid out millions in exit packages after they had been credibly accused of harassment.