Arbitrary

Picture a company whose core business is dispute resolution, a private tribunal professionally dedicated to providing a fully-confidential, seemingly efficient alternative to a traditional lawsuit in a tradition court. We’ve all heard about how overtaxed our courts are, how justice is slow and getting slower, with multiple levels of appeals that can seem interminable. And we’ve all seen images of news crews lurking outside courtroom, which are generally open to the public… and the press. With a few exceptions, you can go online and actually pull up copies of the pleadings attorneys have filed with the court.

Traditionally, to deal with congested court dockets, our judicial system has held that if there is an arbitration clause, the parties to a dispute have to pursue that remedy first (and often exclusively). There have been statutory exceptions over the years, but generally, if there is an agreement to arbitrate, that is where you have go in the event of a dispute… and courts will usually enforce an arbitrator’s decision with minimal review.

But wouldn’t it be nice if you had a place you could go for faster, confidential and private relief? Let me add another variable to this mix. There are lots of alternatives in the dispute resolution business, and generally arbitration is a venue favored by corporations that certainly do not want to air their dirty laundry in a public courtroom if they can avoid it. If you read your agreement with your stock broker, credit card issuer, healthcare provider or even your bank, you might be surprised to find that disputes with these institutions do not go to governmental regulatory agencies or courts. They are forced into mandatory arbitration (sometimes preceded by mediation).

Given that dispute resolution companies need to compete for business – after all they are profit-driven – and given that it is generally corporations and not individuals who have the clout (and the form legal contract) to force arbitration – do you think they tend to pick purely neutral dispute resolution providers? Or perhaps, maybe, they just might prefer companies that tend to resolve all but the most obvious and egregious cases in favor of the corporations. It is not talked about much, but there is a “wink-wink” among corporate counsels general that if they can get a consumer, employee or vendor into their arbitration forum, unless they have a truly indefensible claim, they will always get a slight benefit of the doubt. And not surprisingly, most of those arbitrators are… er… men.

The Obama administration forced those form contractual arbitration provisions between financial institutions and consumers back into the courts, both because of that inherent corporate bias and to bring such disputes back into the public eye. The “rich guy always wins” Trump administration reversed that rule and pushed consumers back into biased arbitration, further rubbing salt into the wounds by pretty much defunding and disemboweling the Consumer Protection Agency.

But in an era where harassment and inappropriate sexual behavior are in the headlines, particularly in the workplace, corporate America relishes what has become a pretty standard employment practice: adding an arbitration clause for workplace disputes in those “new employee” orientation packages, where the new hire simply signs the forms placed in front of him or her. These arbitration clauses do not mirror the arbitration provisions in union collective bargaining agreements (but unions only represent 6.7% of the private sector), which do not give companies the edge.

“Arbitration clauses have become a fixture in American life. You can barely apply for a credit card, put a loved one in a nursing home or rent a car without having to agree to arbitrate all potential legal claims instead of take them to court.

“The clauses are particularly common in the workplace. If an employee is cheated out of wages by being asked to work off the clock — an all too common business practice — it’s a violation of federal labor law. The worker could ostensibly sue her employer. But if she is bound by an arbitration clause, she must take her complaint before an arbitrator.

“Even when a group of workers has been cheated in the same way by the same manager, if they have a signed a forced arbitration clause, they have to go the arbitration route. And in many cases they must do so individually, because almost half the companies that require arbitration also prohibit claims from being arbitrated as a group.

“The lawfulness of these waivers is now being considered by the Supreme Court in three consolidated cases, Epic Systems vs. Lewis et al. The question is whether requiring individual arbitration of workplace claims violates the National Labor Relations Act.” Matthew Finkin writing for the Los Angeles Times, February 9^th. Early in the last century, employers made new hires sign contracts that included a promise not to join a labor union or try to organize union representation. Yellow dog contracts.

But between federal legislation in the 1930s and enforcing judicial rulings, such provisions became unenforceable. The question remains whether these forced agreements are valid and whether our labor laws protect workers even if they are not subject to any union agreement or organizing issues. You can pretty much guess where the Trump administration sits on this issue, but we may soon get a Supreme Court determination to resolve this egregious practice:

“Is there any difference between the yellow dog contracts of the past and today’s contracts prohibiting employees from joining together to assert their legal rights?

“The employers in the Supreme Court case, supported by the Trump administration, say there is. They argue that employees are actually better off with forced arbitration. Instead of the ‘procedural morass’ of litigating group claims in court, employees get an accessible, flexible, swift and inexpensive process, but only as individuals.

“This claim is spurious. How would a non-unionized worker who is regularly cheated out of overtime find a lawyer willing to take her claim? Only if she joins together with other workers who have suffered the same. As the authors of one study pointed out, the argument is ‘hard to square with the reality that few employees accept the invitation.’

“Few, if any, employees can pursue their claims individually. Indeed, this is exactly what these employers are betting on… Forced arbitration is quickly becoming the norm for non-unionized workers. More and more employees are being asked to sign away their right to seek justice should they experience sexual harassment, discrimination or wage theft.

“According to a recent study by the Employee Rights Advocacy Institute for Law and Policy, 80% of Fortune 100 companies have used arbitration agreements to settle workplace disputes since 2010… Another recent paper, by the Economic Policy Institute, found that more than 60 million American workers are now bound by the agreements.” LA Times.

You can just guess what malevolent corporate practices never see the light of day behind the very-closed doors of “slanted” arbitration. In addition to the underlying unfairness of the practice, legislators are deprived of the statistics they need to fashion effective legislation against harassment and gender biased corporate practices. It’s time to end this forced arbitration once and for all.

I’m Peter Dekom, and a wonder how this linear march towards corporate control – versus consumer, worker and individual rights – impairs the very definition of true democracy.