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Forced Arbitration

The New York Times recently published a three-part series on arbitration called “Beware the Fine Print.” The second installment of this important three part series shared the story of Dr. Deborah Pierce’s experience with arbitration. An emergency room doctor in Philadelphia, she brought a claim of sex discrimination against the medical group she was working with. Her claim was arbitrated by a corporate lawyer who she saw having coffee with the head of the medical group on the morning of the hearing. During the process, she found that the medical group withheld and destroyed evidence without consequence, and when the arbitrator ruled for the medical group, he copy and pasted passages from the medical group’s briefs into his ruling.

Arbitration was designed as a process for corporations on equal footing to bargain to have disputes heard and decided by a private firm or individual, rather than in court. While that process may work where both parties have bargaining power, forced arbitration in employment arises where employees sign paperwork or handbook provisions that include an arbitration clause, whether or not they fully comprehend the implications. As a result, corporations are exempting themselves from the procedures that govern our courts, and making our American justice system off-limits to employees.

“In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.” 7th Amendment to the United States Constitution

 

Employers are now including forced arbitration clauses in employment paperwork, handbooks, and other documents. Employers make signing forced arbitration clauses a condition of employment, and in many cases may fire an employee for refusing to sign an arbitration agreement. Arbitration means that when employees have a workplace concern – like Dr. Pierce’s sex discrimination claim – they are forced to bring their claims to arbitration and not in our courts. In these situations, workers are denied their “day in court,” even when employers break the law. These clauses may be buried in the fine print of the handful of paperwork received on the first day of a new job. In many cases, employees unknowingly sign away their rights to be able to bring claims in court for important employee protections, such as state and federal civil rights laws, whistleblower protections, age discrimination cases and claims for unpaid wages.

Forced arbitration clauses in employment contracts make it more difficult for workers to obtain the justice intended by our laws. Unlike court proceedings which are public and memorialized in public written decisions and appeals, arbitration may be kept private and secret, and can be used to hide abuses of workplace protections. The same employers who break the law may decide which arbitrators will hear the disputes and what rules will govern. In addition to removing civil rights claims from our court rooms, many forced arbitration clauses ban class action suits, which allow individuals to come together to bring their claims against corporations. Without the ability to band together, it can be hard for individuals to manage the cost of litigation, and companies continue to cause harm to a large number of people without penalties.

Ending forced arbitration has been a priority for Correia & Puth and other employee advocates for many years, and has increased in importance in recent years following Supreme Court decisions that paved the way to further privatize employees’ rights. Some members of Congress are trying to fix the problem. Introduced by Senator Franken and Representative Johnson, the Arbitration Fairness Act (AFA) would amend federal law to make it unlawful for employers to impose arbitration on employees except when the employees knowingly and voluntarily agree to arbitration after the problem arises, or in a collective bargaining agreement. The AFA would help ensure that employees are not blind-sided when they face an issue at work.

Want to help fix the problem, too? Visit the National Employment Lawyer Association’s page on forced arbitration with tools to aid in outreach to members of Congress and more.

To learn more about forced arbitration, read NELA Executive Director Teri Chaw’s Huffington Post blog and the three-part New York Times’ Beware the Fine Print series.

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