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 and shields employers from public accountability for violating workers’ employment and civil rights.
The prevalence of forced arbitration of workplace claims is a result of U.S. Supreme Court decisions that have expanded the reach of the Federal Arbitration Act (FAA) in ways not intended by Congress when it passed the FAA in 1925. The FAA was never supposed to apply to the employment relationship, where workers do not have equal bargaining power with their employers.
The exact number of workers who are affected by forced arbitration is impossible to determine because forced arbitration proceedings occur in secret, are not a matter of public record, and frequently do not permit appeals.
“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.
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Personal trainer Terrance L. Burton filed a lawsuit against 24 Hour Fitness in December 2007, alleging that the company failed to pay him wages he was owed under the California Labor Code. In November 2010, 24 Hour Fitness sought to force Mr. Burton into arbitration, despite the fact that the company stated earlier in the case that it would not seek to enforce the arbitration clause he was required to sign when he joined the company. (Burton v. 24 Hour Fitness USA, Inc., (Cal. Ct. App., Jan. 18, 2012)).
According to an article in The New York Times, American Apparel “required that all employees sign agreements requiring them to arbitrate any disputes, including sexual harassment claims.” (Steven Davidoff Solomon, Arbitration Clauses Let American Apparel Hide Misconduct, N.Y. Times (Jul. 15, 2014).
After Alisha Marzette and Kathy Dunmire filed a lawsuit alleging employment discrimination against their employer Anheuser-Busch, the company tried to prevent them from bringing their claims in court based on a forced arbitration clause contained in an employment application. (Marzette, et al. v. Anheuser Busch, Inc., et al., Case No. ED97160, (Mo. Ct. App., Apr. 17 2012)).
Margot Roosevelt of the Orange County Register reported that Applied Medical Resources distributed a letter to its employees in December of 2014 instructing them that in order to be eligible for a year-end bonus, they must agree to be bound by a forced arbitration clause. (Margot Roosevelt, A push to end mandatory workplace arbitration: Will aggrieved workers get their day in court?, Orange County Register (Sept. 20, 2015).
Cari Butcher filed a lawsuit alleging that her former employer Bally Total Fitness engaged in sexual harassment and sexual discrimination, among others charges. An appellate court held the forced arbitration clause Butcher signed when she began employment precluded her from pursuing her claims in court. (Butcher v. Bally Total Fitness Corp., Cuyahoga App. No. 81593, 2003-Ohio-1734 (Apr. 3, 2003)).
When Lesia Body Phillips filed a lawsuit against Bestway Rental alleging that the company engaged in unlawful discrimination, Bestway responded by moving to compel arbitration pursuant to a forced arbitration clause Phillips signed when her employment began. (Phillips v. Bestway Rental Inc., 542 Fed. Appx. 410 (5th Cir. 2013)).
On March 30, 2016, Adrienna Brown filed a lawsuit against BJ’s Restaurant Operations alleging that it discriminated against her based on her race in violation of Title VII of the Civil Rights Act of 1964. In June 2016 the court granted the employer’s motion to force Brown into arbitration and dismissed her case. (Brown v. BJ’s Restaurant Operations, Case No. 4:16-cv-00167-SWW (E.D. Ark. June 7, 2016)).
Months after Navy Reservist Kevin Ziober began working at BLB Resources, his employer required him to sign a forced arbitration clause. When he filed a lawsuit against the company alleging that it later terminated him in violation of a federal law protecting servicemembers, BLB moved to compel arbitration of his claims. (Jessica Silver-Greenberg and Michael Corkery, Start-Ups Embrace Arbitration to Settle Workplace Disputes, N.Y. Times (May 14, 2016).
On May 12, 2015, Lauren Weber of the Wall Street Journal reported that the United States arm of Boehringer Ingelheim, a German pharmaceutical company, prohibited employees from receiving sales commissions unless they agreed to resolve all disputes against the company in arbitration rather than in court. (Lauren Weber, Employees Pay a Price to Retain Right to Sue, Wall St. J. (May 12, 2015).
When Andrew Ramirez filed a lawsuit on behalf of himself and other employees who alleged that Bridgestone failed to pay wages and overtime compensation that they were owed under the Fair Labor Standards Act, Bridgestone relied on a forced arbitration clause both to prevent Mr. Ramirez from pursuing his claims in court and to prevent his colleagues from joining him in a class action. (Ramirez v. Bridgestone Retail Operations, LLC, 2013 U.S. Dist. LEXIS 52588 (E.D. Mich., Apr. 12, 2013)).
Matthew J. Ryan began working as an attorney for BuckleySandler in 2008 and subsequently filed a lawsuit alleging that the law firm engaged in unlawful age discrimination against him. In response, BuckleySandler filed a motion to compel arbitration pursuant to a forced arbitration clause Ryan signed at the beginning of his employment. (Ryan v. BuckleySandler, Case No. 2013-1816, (D.D.C., Sept. 9, 2015)).
In an article published by Pacific Standard Magazine, Collette Shade described BuzzFeed employment documents as containing a clause stipulating that all disputes are to be brought before an arbitrator and not a judge or jury. (Collette Shade, Content Creators of the World, Unite!, Pac. Standard (Sept. 14, 2015)).
According to an employment application for hourly workers, Carrols Restaurant Group (which operates more than 650 Burger King locations) imposes a forced arbitration program on these employees as a condition of employment. (Carrols Hourly Team Member Application For Employment (last visited Nov. 30, 2016)).
When Christina Mocino began working at Catalina Restaurant Group, she received a document requiring her to arbitrate all claims against her employer, but gave her the option to retain the right to bring a class action lawsuit, which Mocino did. In May of 2013, Mocino filed a class action lawsuit in state court against Catalina alleging violations of the wage and hour laws and, in response, Catalina filed a motion to compel arbitration, which a trial court granted and an appellate court upheld. (Mocino v. Catalina Rest. Group, Inc., Cal. Ct. App., 4th App. Dist. E059845 (Jun. 19, 2015)).
On May 5, 2009, a federal district judge in Arizona granted The Cheesecake Factory’s motion to compel arbitration of a dispute alleging violations of Title VII of the Civil Rights Act of 1964, among other claims, pursuant to a forced arbitration clause it required the plaintiffs, Bryce Fitzpatrick and Albert Miller, to sign as a condition of employment. (Equal Employment Opportunity Comm’n v. The Cheesecake Factory, Inc., 2009 U.S. Dist. LEXIS 41883 (D. Ariz., May 5, 2009)).
An article in the Wall Street Journal reported that CVS implemented an arbitration program for its employees in 2014. (Lauren Weber, More Companies Block Employees From Filing Suits, Wall St. J. (Mar. 31, 2015)).
Jennifer Baier worked as a waitress at an Olive Garden restaurant (a subsidiary of Darden Restaurants) and filed a lawsuit against alleging that the company violated Missouri state law by discriminating against her because of her gender. Darden responded by moving to compel arbitration pursuant to a clause Baier was required to sign at the beginning of her employment. (Baier v. Darden Restaurants et. al., Case No. WD 76584, (Mo. Ct. App., Feb. 25, 2014)).
In September 2016, Déjà Vu Consulting convinced a federal judge in Florida to compel individual arbitration of a former exotic dancer’s potential collective action lawsuit, which alleges that the company had misclassified her and her colleagues as independent contractors and that it owed them unpaid wages. (Garcia v. Deja Vu Consulting, et al., Case No. 8:16-cv-01193 (M.D. Fla., Sept. 2, 2016)).
According to an employment document posted online by the American Arbitration Association in 2013, Dish Network required an employee named Matthew Ryan to arbitrate all potential employment disputes and waive his right to a jury trial as a condition of being hired by the company. (An electronic copy of the document is on file with The Employee Rights Advocacy Institute For Law & Policy).
In September 2014, the U.S. Equal Employment Opportunity Commission (EEOC) sued Doherty Enterprises Inc. (the operator of a number of Applebee’s, Chevy’s and Panera Bread franchises) in federal court alleging that the company violates federal anti-discrimination laws by imposing a forced arbitration clause on all employees as a condition of being hired. (Bill Kenealy, EEOC sues restaurant franchisee over employee arbitration requirement, Bus. Ins. (Sept. 22, 2014)).
On December 22, 2015, the National Labor Relations Board upheld an Administrative Law Judge’s findings that the forced arbitration clause a Brooklyn, New York Domino’s Pizza restaurant imposed on its workers violates federal labor law because it prohibits workers from joining together in class and collective action lawsuits. (Domino’s Pizza LLC, 363 N.L.R.B. 77 (2015)).
Stephen Morris and Kelly McDaniel sued Ernst & Young, alleging that it misclassified them and a group of their colleagues, and denied them lawfully owed wages. In August 2016, the U.S. Court of Appeals for the Ninth Circuit ruled that the company’s attempt to prevent them from bringing their claims together in court violated the National Labor Relations Act. (Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016)).
Eve Byron reported in the Helena Independent Record that a federal district court judge in Montana ruled on October 7, 2011 that the forced arbitration clauses FedEx Ground Package System sought to impose on its drivers were unenforceable. (Eve Byron, Lawsuit against FedEx moves forward as judge throws out ‘unconscionable’ arbitration mandate, Helena Independent Record (Oct. 8, 2011)).
In July 2016, former Fox News anchor Gretchen Carlson filed a lawsuit against Fox News chairman Roger Ailes accusing him of sexual harassment. In response to Carlson’s suit, Ailes moved to compel arbitration of Carlson’s allegations pursuant to a forced arbitration clause in her employment documents. (Ian Millhiser, The Dirty Trick Fox News Is Using To Undercut Gretchen Carlson’s Sexual Harassment Suit, ThinkProgress (Jul. 11, 2016)).
After she was fired as an assistant manager at GameStop, Cara New filed claims in court for sexual harassment and wrongful discharge. Relying on a forced arbitration clause presented to New at the beginning of her employment, GameStop successfully moved to dismiss her case and compel arbitration. (New v. GameStop, Inc., Case No. 12–1371, (W. Va., Nov. 6, 2013)).
Guitar Center told its employees that they must sign a forced arbitration clause or they will lose their jobs. (Dave Jamieson, Guitar Center Tells Employees To Sign Arbitration Agreements Or Lose Their Jobs, Huffington Post (Jan. 15, 2016)).
As reported by Lauren Weber in the Wall Street Journal, Halliburton has implemented a forced arbitration program for its employees. (Lauren Weber, More Companies Block Employees From Filing Suits, Wall St. J. (Mar. 31, 2015)).
Following 18 years of employment at a Jack In The Box restaurant, David Kunzie filed a lawsuit in Missouri state court alleging that the company violated state law by terminating him based on his age and gender. In response, Jack In The Box moved to compel arbitration pursuant to a forced arbitration clause it distributed to Kunzie during his employment. (Kunzie v. Jack In The Box, Inc., Case No. ED92974, (Mo. Ct. App., Mar. 9, 2010)).
According to an employment document posted on its website, as of July 17, 2009, JCPenney imposes forced arbitration on all newly-hired associates. (JCPenney Policies & Procedures, Arbitration of Employment Termination Disputes (last visited Nov. 30, 2016).
Drake Alabanza worked as a cook at a KFC in Hawaii and, after being terminated in February 1993, he filed both a state agency complaint and a lawsuit alleging race discrimination and harassment. KFC later filed a motion to compel arbitration pursuant to a clause in Alabanza’s employment application. (Brown v. KFC Nat’l Mgmt. Co., 921 P.2d 146 (Haw. 1996)).
Lauren Weber reported in the Wall Street Journal that Kmart has implemented a forced arbitration program for its employees. (Lauren Weber, More Companies Block Employees From Filing Suits, Wall St. J. (Mar. 31, 2015)).
Before Stephanie Cruise could begin working for Kroger in 2007, the company required her to sign a document containing a clause forcing all potential employment disputes into arbitration. (Cruise v. Kroger Co., et. al., Case No. B248430, (Cal. Ct. App., Aug. 27, 2014.))
On September 28, 2015, a federal appellate court found that the forced arbitration clause that LensCrafters imposes on its employees, which includes a provision prohibiting them from bringing representative actions under California state law, to be unenforceable. (Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425 (9th 2015)).
Catherine Jane Valle and Don Perolino Cristobal were required to sign forced arbitration clauses requiring that they arbitrate any future dispute with Lowe’s before they were allowed to begin working. This prevented them from pursuing their claims for overtime compensation in court. (Valle v. Lowe’s HIW, Inc., 2011 U.S. Dist. LEXIS 93639 (N.D. Cal., Aug. 22, 2011)).
Shukri Sakkab worked for a LensCrafters retail store (LensCrafters is owned by Luxottica) in California. When he filed a lawsuit in state court against the company alleging, among other things, that Luxottica failed to pay him and other employees overtime wages they had earned, the company moved to force his claims into arbitration (Sakkab v. Luxottica Retail North America, Inc., 803 F.3d 425 (9th Cir. 2015)).
Janet Payne was hired as a part-time cashier at Menards and was subject to a forced arbitration clause that included a prohibition on joining with other employees to pursue class actions. After being injured at work and then terminated, Payne filed a charge with the EEOC. In April 2016, Menards settled with the National Labor Relations Board, and as part of the settlement Menards will no longer use forced arbitration agreements to prevent workers from filing class actions. (Annie Ropeik, Labor Complaint At Valparaiso Menards Leads To Company-wide Changes, WBAA-National Public Radio (Apr. 28, 2016)).
In 2014, a federal appeals court reversed a trial court ruling and forced former Nordstrom employee Faine Davis to bring her employment claims against Nordstrom in arbitration, even though the company adopted its forced arbitration policy after the plaintiff was already employed and did not secure her affirmative consent to the new policy. (Davis v. Nordstrom, Inc., 755 F.3d 1089 (9th Cir. 2014).
Former Red Lobster employees John Patterson and Jerry Robinson filed a complaint with the EEOC and a lawsuit in federal court alleging that their employer discriminated against them on the basis of race. In response, the restaurant moved to dismiss the case and compel arbitration. (Patterson v. Red Lobster aka GMRI, Inc., 81 F. Supp. 2d 681 (S.D. Miss., Oct. 6, 1999)).
On June 9, 2015, In These Times published an article by Bruce Vail reporting that an Administrative Law Judge for the National Labor Relations Board found that The Rose Group (the operator of many Applebee’s and Corner Bakery franchises, among other restaurants) had violated the National Labor Relations Act by imposing on workers as a condition of employment a forced arbitration clause preventing them from bringing class and collective action lawsuits. (Bruce Vail, Applebee’s Is Trying To Limit Workers’ Ability to Sue the Company When Their Wages Are Stolen, In These Times (June 9, 2015)).
Jorgie Franks worked in sales for a Samsung Electronics America store in Florida and alleged that the company engaged in an unfair labor practice by imposing on him as a condition of employment a forced arbitration clause that prevented him from filing any action in court and prohibited him from joining together with other employees in class or collective arbitration actions. (Samsung Electronics America, Inc. f/k/a Samsung Telecommunications America, LLC and Jorgie Franks, 363 N.L.R.B. 105 (2016)).
As reported by Lauren Weber in the Wall Street Journal, Sears imposes forced arbitration on at least some of its employees. (Lauren Weber, More Companies Block Employees From Filing Suits, Wall St. J. (Mar. 31, 2015)).
According to an online job application, “It is Starbucks policy that after October 1, 2014, all new hires shall be subject to an arbitration agreement as a condition of employment.” (An electronic copy of the application is on file with The Employee Rights Advocacy Institute For Law & Policy.)
Malika Zghaoui filed a lawsuit in state court against Sunoco alleging that the company engaged in sexual harassment and sex based discrimination, among other claims, and the company moved to compel arbitration pursuant to a forced arbitration clause it imposed on her. A federal court granted Sunoco’s motion to compel arbitration. (Zghaoui v. Sunoco Inc., 2012 U.S. Dist. LEXIS 51748 (D. Mass., Apr. 13, 2011)).
In August 2010, Jacquelyn Ann Whittington filed a lawsuit alleging that Taco Bell had failed to pay both her and a group of her co-workers overtime wages they were owed under the Fair Labor Standards Act. Taco Bell tried repeatedly to move the lawsuit to arbitration pursuant to a forced arbitration clause before finally settling the case. (Whittington v. Taco Bell of America Inc. et. al., 2013 U.S. Dist. LEXIS 161665 (D.Colo. Nov. 13, 2013)).
Ronald Gillette and Abdul Mohamed were among the many Uber drivers who were required to agree to forced arbitration clauses before they could begin working for the ride-sharing company. (Clark Taylor, Uber’s Attempt To Silence Its Drivers May Have Just Backfired, In These Times (Aug. 19, 2015)).
In a case that ultimately reached the U.S. Supreme Court, Waffle House presented applicant Eric Baker with a document stipulating that any dispute with his prospective employer would be “settled by binding arbitration.” (EEOC v. Waffle House, Inc., 534 U.S. 279 (2002)).
In March 2011, Mark Farris began working as a salesman for The Western & Southern Life Insurance Company. After being terminated, Farris sued the company alleging employment discrimination. A court decided that the company’s forced arbitration policy prevented him from vindicating his rights in court. (Farris v. The W. & S. Life Ins. Co., 2014 U.S. Dist. LEXIS 153256 (S.D. Ind. Oct. 28, 2014).
On March 10, 2016, Nitasha Tiku reported for BuzzFeed that Tara Zoumer, an associate community manager for start-up company WeWork that provides workspaces, was fired after she refused to sign an employment document with a forced arbitration clause. (Nitasha Tiku, WeWork Is Being Sued By An Ex-Employee, BuzzFeed (Mar. 10, 2016)).
Yvonne Cardwell worked at Whataburger and sued the company after suffering an injury at work. Whataburger’s motion to force Ms. Cardwell into arbitration was granted by a Texas appellate court. (Whataburger Rests. LLC v. Cardwell, Case No. 08-13-00280-CV (Tex. App., Feb. 26, 2016).
When Robert T. Anderson brought claims against Xerox for discriminating against him on the basis of his age, disability, and sexual orientation, the company filed a motion in federal court to compel arbitration. (Anderson v. Xerox Corp., 2014 U.S. Dist. LEXIS 116356 (D. Or. Aug. 21, 2014)).