Last week The New York Times published a groundbreaking investigative series on forced arbitration, "Beware The Fine Print," that shines a bright light on this pernicious--and growing--corporate practice. By doing so, the NYT and its reporters have performed an important public service by exposing how big business is gaming America's civil justice system and depriving millions of workers access to the courts when they violate our nation's employment and civil rights laws. Forced arbitration is one of the most significant threats to the protection, enforcement, and vindication of employee rights.
Congress has enacted laws to protect America's workers from discrimination, harassment, retaliation, wage theft, and unsafe workplaces. All of these laws exemplify our nation's values that everyone should be treated equally, paid fairly, provided safe working conditions, and to be able to access the courts when their rights are violated. When a corporation's wrongdoing is widespread among its workforce, the ability of workers to join together is essential for the effective vindication of their rights.
Allowing corporations to use forced arbitration and class action waivers to shield themselves from public accountability when they break the law undermines the enforcement of our employment and civil rights laws. Unlike America's public civil justice system, the private and confidential nature of forced arbitration prevents corrective actions that can be taken by the courts and Congress to ensure that our country's workplace laws are enforced as Congress intended. Imagine, for example, what would have happened if Lilly Ledbetter had been forced to arbitrate her equal pay claim against Goodyear Tire and Rubber Co. before a secret tribunal. Her case would have never seen the light of day and the Lilly Ledbetter Fair Pay Act would not have been the first bill President Barack Obama signed into law after he took office. Recognizing the unfairness of forced arbitration, last year the President issued the Fair Pay and Safe Workplaces Executive Order barring companies seeking federal contracts of $1 million or more from forcing their workers to arbitrate sexual discrimination, harassment, or assault claims.
Arbitration--when it is knowingly and voluntarily agreed to, when the employee can weigh the relative merits of going to court or arbitration, when the arbitrator presiding over the dispute is truly neutral, and when adequate safeguards of fairness and due process govern the process--may be a legitimate option for resolving workplace disputes. As the NYT authors correctly point out, however, forced arbitration lacks many of these fundamental elements of fairness.
It is disingenuous for companies to characterize forced arbitration as an "agreement" or a "choice" by their workers. The reality is that most workers have no power to negotiate the terms of "take-it-or-leave-it" forced arbitration clauses. Forced arbitration clauses are typically imposed by corporations on employees as a condition of getting or keeping a job. Since most people must work to support themselves and their families, walking away from a job is not a realistic choice.
According to a 2009 study by The Employee Rights Advocacy Institute For Law & Policy and Public Citizen, the overwhelming number of workers who are subject to forced arbitration clauses were unaware that they were giving up their right to take their employer to court and did not remember seeing anything about forced arbitration in their employment papers. The study also found that even if workers were aware of a forced arbitration provision, almost 75% of them thought they could still take their employer to court.
If forced arbitration is as truly fair and beneficial to workers as corporations contend, then why must they mandate it as a condition of employment? Why are forced arbitration clauses buried in the fine print of employment applications, contracts, and handbooks? Why don't corporations offer arbitration to their employees as one option for dispute resolution, giving them the choice of consenting to or rejecting it without fear of losing their jobs? Judge Berle M. Schiller, who was profiled in the NYT special report, answered these questions in a recent opinion: "There is a reason that arbitration is the favored venue of many businesses for deciding employment disputes, and it is not to ensure that employees are afforded the best chance to have their claims adjudicated by a judge or jury picked from the community."
Ending forced arbitration in the workplace can be a reality without the sky falling. Congress has already passed laws, with bipartisan support, to ban forced arbitration of disputes involving auto dealers, poultry and livestock producers, and certain employees of federal defense contractors. The time has come for Congress to outlaw forced arbitration for all of America's workers. The Arbitration Fairness Act (AFA) of 2015 was introduced earlier this year in Congress. It would make forced arbitration of employment, consumer, anti-trust, and civil rights claims unlawful and would restore the rights of workers and consumers to seek justice in our courts.
Anyone who believes that corporations should not be given the power to impose forced arbitration--which is rigged in their favor and against individuals--should urge their Members of Congress to support and pass the AFA.