Ending Forced Arbitration In The Workplace

Since its inception in 2008, The Institute has been working to end forced arbitration of workplace disputes, one of the most significant obstacles to the protection, enforcement, and vindication of employee rights.

Forced arbitration denies America’s workers access to our nation’s civil justice system by requiring them to give up their rights to resolve their claims in court when they believe they have been illegally treated in the workplace.

Forced arbitration is anathema to our open justice system because it occurs in secret, private tribunals lacking important legal safeguards, such as the right to appeal the arbitrator’s decision, public access to arbitration proceedings that expose patterns of employer misconduct, and other guarantees ensuring a fair process that exist in a court of law. As a result, employers are shielded from public accountability for violating workers’ employment and civil rights.

Taking advantage of their superior power and the fact that most people need to work for a living, employers foist forced arbitration on workers as a condition of getting or keeping a job. Forced arbitration clauses are often buried in the fine print of employment applications, contracts, and handbooks.

Employers characterize forced arbitration as an “agreement” or a “choice” by their workers, but the reality is that most workers have no power to negotiate the terms of “take-it-or-leave-it” forced arbitration clauses since they need to work to support themselves and their families.

Workers who are subject to such provisions almost never have any recollection of them, and if they do, it is unlikely that they understand the ramifications of “agreeing” to them. One federal judge keenly observed that “it is of little use that an employee can read and review an agreement if signing an agreement is mandatory and non-negotiable.”

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 proceedings—may be a legitimate option for resolving workplace disputes. Forced arbitration, however, lacks many of these fundamental elements of fairness.

One of The Institute’s early and noteworthy achievements was coining the term “forced arbitration” in 2009, which was found to resonate more with people than “mandatory arbitration” and “binding arbitration.” Today, “forced arbitration” is widely used by the public, Members of Congress, judges, academics, advocacy groups, and the press.

In response to this assault on workers’ rights and the civil justice system, The Institute is engaged in a “Strategic Public Education Campaign To End Forced Arbitration Of Employment Disputes” to restore fairness and access to the courts for employees through public policy and legislative reforms. This includes passage of the federal Arbitration Fairness Act, which would prohibit employers from forcing their employees into pre-dispute arbitration; and the Restoring Statutory Rights and Interests of the States Act, which would ensure that when Congress or the states have created rights and remedies for individuals under civil rights, employment, and other laws, they can enforce them in court rather than being forced into arbitration.

FROM OUR BLOG

Horton Comes To A Head: U.S. Supreme Court Poised To Resolve Conflict Regarding Workers’ Rights To Act Collectively
By Elizabeth Colman, Paul H. Tobias Attorney Fellow

The United States Supreme Court granted three petitions for certiorari during their Friday, January 13 conference that touch on issues central to employees’ ability to vindicate their workplace rights. In Epic Systems Corp. v. Lewis, Ernst & Young, LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc., the parties seek to determine whether mandatory pre-dispute class and collective action waivers contained in forced arbitration clauses that are required as a condition of employment conflict with the employees’ right to engage in “concerted activities” for the purpose of “mutual aid or protection,” as provided by the National Labor Relations Act (NLRA) and the Norris-LaGuardia Act (NLGA), such that they are deemed unenforceable under the savings clause of the Federal Arbitration Act (FAA). The appellate courts in Lewis and Morris found mandatory class and collective action waivers in forced arbitration clauses to be illegal under existing labor law, and, thereby unenforceable under the FAA. The circuit court in Murphy Oil, relying primarily on case law regarding the FAA and the nation’s policy favoring arbitration, came to the opposite conclusion.
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IN THE NEWS

The Institute Joins 164 Groups Calling for Strong CFPB Action Against Forced Arbitration
On April 27, The Institute joined 163 groups that advocate for consumers, students, civil rights, labor, small businesses, and others in a letter urging the Consumer Financial Protection Bureau (CFPB) to use its Congressional authority to limit forced arbitration clauses in certain financial products.

Uber’s Attempt To Silence It’s Drivers May Have Just Backfired
By Clark Taylor, 2016–2017 Paul H. Tobias Attorney Fellow (In These Times, August 19, 2015)

The article was in response to U.S. District Judge Edward Chen’s decision that Uber’s forced arbitration clause was unconscionable and thus unenforceable. In discussing employers’ growing reliance on forced arbitration, the author writes that forced arbitration denies workers their day in court and is instead a “sham system of justice.”

“Companies That Violate Workers’ Rights Don’t Get To Rob Them Of Their Day In Court, Too”
By Terisa E. Chaw, Executive Director, The Employee Rights Advocacy Institute For Law & Policy (The Huffington Post, November 12, 2015)

This op-ed article was written in response to The New York Times’ groundbreaking three-part investigative report, “Beware the Fine Print” (October 31-November 2, 2015), that shines a bright light on forced arbitration.

PUBLICATIONS AND RESOURCES

Workers Beware: Forced Arbitration Can Happen To You

“Workers Beware” is intended to provide information about employers that impose forced arbitration on their employees for the benefit of advocates, researchers, policymakers, and—most of all—workers.

The Institute Publishes “Taking ‘Forced’ Out Of Arbitration: How Forced Arbitration Harms America’s Workers”

The Institute is pleased to announce the publication of Taking “Forced” Out Of Arbitration: How Forced Arbitration Harms America’s Workers. Its purpose is to inform and influence a broad audience, including public officials, policy makers, the press, and members of the general public, about forced arbitration of workplace disputes and why it should be abolished. Special efforts are being made to reach immigrant, low wage, and other workers particularly vulnerable to unlawful employment practices. The pamphlet has been translated into Chinese and Spanish.

National Study of Public Attitudes on Forced Arbitration
By The Employee Rights Advocacy Institute For Law & Policy and Public Citizen (2009)

In April 2009, The Employee Rights Advocacy Institute For Law & Policy (The Institute), in collaboration with Public Citizen, released a study based on a major national survey on forced arbitration of employment and consumer claims conducted by Lake Research Partners, one of the most respected national public opinion and political strategy research firms in the country. This important research was made possible by a grant from The Public Welfare Foundation.

Forced Arbitration In The Workplace: A Symposium
Hosted by The Employee Rights Advocacy Institute For Law & Policy and Berkeley Journal of Employment and Labor Law (2014)

Employee rights advocates, law students, academics, arbitrators, and judges joined The Institute for “Forced Arbitration In The Workplace: A Symposium” at the University of California, Berkeley School of Law (Boalt Hall) on Thursday, February 27, 2014. With over 175 participants, The Institute, in collaboration with the Berkeley Journal of Employment and Labor Law (BJELL), brought together a diverse range of experts on forced arbitration, including practitioners, law professors, social science researchers, and government agencies to engage in a thoughtful dialogue and help raise awareness about forced arbitration of workplace disputes.

Forced Arbitration In The Workplace: A Symposium (Law Review Issue), Berkeley Journal of Employment and Labor Law (2014)

The law review articles in this issue represent a renewed effort among the legal community to strengthen the scholarship on forced arbitration of workplace disputes and to ensure fairness for workers. Each article contributes to a better understanding of forced arbitration in the workplace and its impact on workers’ ability to enforce their statutory rights.

A Metamorphosis: How Forced Arbitration Arrived In The Workplace
By Carmen Comsti, 2014–2015 Paul H. Tobias Attorney Fellow (2014)

This law review article, published in the Berkeley Journal of Employment and Labor Law (2014), describes the shift from public enforcement of workplace laws to private forced arbitration. Part I of the article sets the stage by providing a brief overview of the distinctions between voluntary arbitration and forced arbitration. Part II describes the elevation of the Federal Arbitration Act (FAA) to a “super-statute” and the limited scope of judicial review of forced arbitration provisions and awards. Part III discusses how the courts have misapplied traditional labor law jurisprudence to justify the expansion of forced arbitration of employment disputes under the FAA. Finally, Part IV explores how forced arbitration has eroded the statutory purposes and protections of our nation’s workplace laws, focusing on the Fair Labor Standards Act and Title VII of the Civil Rights Act of 1964. These developments have transformed the employee-employer relationship from one that is regulated by worker protection statutes enforced in our public justice system to one that operates in private tribunals where workers are forced to arbitrate their claims as a condition of employment and without due process guarantees.

 

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