Corporations Only Want Arbitration Fairness for Themselves, Not Workers

Yesterday, April 29, 2009, was Arbitration Fairness Day in our nation’s capital, as dozens of individuals affected by forced arbitration, their attorneys, and representatives from the Fair Arbitration Now coalition converged in Washington, DC to tell their stories to their members of Congress.

And what powerful stories they were!  Who could listen to the story of Jamie Leigh Jones, who was brutally sexually assaulted and held prisoner in Iraq by employees of KBR, a Halliburton subsidiary, and not think that she deserves her day in court?  Or of David William Kurth, whose father died from sepsis in a filthy nursing home with inadequate staff to prevent bedsores and dress his wounds?

If these unspeakable horrors had happened to someone you love, you can bet that you’d be ready to go to court, if there was no other way to hold the wrongdoer accountable. Not surprisingly, that’s what a newly released national poll found as well:

• Six in 10 likely voters support the Arbitration Fairness Act – including majorities of Democrats, Republicans and Independents;
• 59 percent of likely voters oppose the use of mandatory binding arbitration clauses in employment and consumer contracts;
• Two-thirds of respondents cannot remember ever reading about a forced arbitration provision buried in the fine print of employment terms or agreement for goods and services; and,
• More than 70 percent of respondents believe they could take their employer or a corporation to court in the event of a dispute, unaware they could be subjected to mandatory binding arbitration.

The poll makes clear that most people don’t realize that forced arbitration is taking away their rights. Forced arbitration strips our most basic rights and makes many employee and consumer protections unenforceable. The laws that protect us from discrimination based on age, sex, religion, race, disability, and unequal pay for equal work, such as the Civil Rights Act and the Equal Pay Act, become meaningless and unenforceable in arbitration. Employees lose important protections for blowing the whistle on waste or fraud or for fighting retaliation for taking family/medical leave, for example. Because the private system of forced arbitration benefits companies – and disadvantages consumers and employees – more and more industries are using forced arbitration to evade accountability.

If forced arbitration is so great, you’d think that companies wouldn’t mind having it applied to them.  After all, they claim, arbitration is less costly and time-consuming (claims that often simply aren’t true.)  But you’d be wrong about that. As part of the battle over passage of the Employee Free Choice Act, employers are grousing about a provision that would make arbitration apply to them.

As Art Levine reports in Huffington Post, “the Chamber of Commerce is adding to the millions already spent on spreading myths about the [Employee Free Choice Act] with a new line of attack: the bill’s arbitration provision would lead to commissar-like bureaucrats telling executives how to run their businesses.” (See As ‘Secret Ballot’ Myth Sputters, Chamber Launches New Anti-Union Attack Line.)

There are, to be sure, some differences between the types of arbitration that would be required by EFCA and the arbitration some employers force on their employees.  But those differences even more compellingly favor eliminating forced arbitration for employees.  First, the arbitration provision in EFCA does not kick in until 120 days after a union has been recognized, and only if workers and employers can’t come to a contract agreement in that time period.  There is no such negotiation period in most employment arbitration agreements — if an employee wants to sue, corporations argue, they cannot pass go, but must immediately submit to arbitration.

Moreover, the EFCA arbitration provisions apply to two entities that commonly utilize arbitration to resolve disputes (unions and employers) and have expertise in navigating the system.  The “repeat user bias” in employment arbitration has been well-documented, as arbitrators tend to favor the parties who are most likely to use their services again (which is rarely if ever the employee), and can be blacklisted if they are perceived as being too worker-friendly.  (See Alexander Colvin, Empirical Research on Employment Arbitration: Clarity Amidst the Sound and Fury?, Employee Rights and Employment Policy Journal, Vol. 11, No. 2 (2007).

So if employers truly think that arbitration is a better system than resolving disputes in court, then why are they fighting the EFCA provision?  Of course, they’re inclined to fight any effort to level the playing field for workers, which the Employee Free Choice Act would do.  Just as they’re spreading the myth that EFCA would eliminate the secret ballot, it just comes naturally for them to confuse the public about the other EFCA provisions that would empower workers.

But if corporate America doesn’t want “a bureaucrat from Washington” to tell people how to run their businesses, then we have to wonder why they want arbitrators who are not even required to know the law or follow it passing judgment on their employment practices.  Essentially, companies are talking out of both sides of their mouth:  they want to impose an unfair arbitration process on their employees, but when a fair arbitration process is applied to them, they don’t like it.

But workers don’t have to accept this hypocrIsy: we can work to support both the Arbitration Fairness Act and the Employee Free Choice Act. If both were to pass, workers would be able to go to court for their employment and civil rights claims (under the Arbitration Fairness Act), and leave arbitration to the unions and employers who know how to use it best (under EFCA).  But that might simply be too much fairness for employers to handle.

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