We Fight Against Injustice – Wherever It May Arise


Forced arbitration: Time for a change

On Behalf of | Jun 12, 2013 | Firm News

Imagine the following scenario: You go on various job interviews and are given an offer. Your new employer hands you a package of materials for you to review and sign before you can officially begin the job. Among the various documents you are handed is a so-called “Agreement to Arbitrate.” It says that both you and your employer agree that any disputes concerning your employment (including claims for discrimination, harassment, payment of wages or wrongful termination) must be resolved by binding arbitration and that you are waiving your right to bring an action in court and also waiving your right to a trial by jury. The “agreement” also says that you also agree to not bring or participate in any class action lawsuits against the employer. And by the way, the so-called agreement states that it can be modified at any time by the employer.

What should you do? What can you do? You ask your employer if the terms of this agreement are negotiable and are told that they are non-negotiable and that if you do not sign the arbitration agreement,  you cannot get the job. You sign the agreement because you have no choice as you need a job to support yourself and your family. Welcome to forced arbitration. It’s a world where, you, along with millions of other American workers, no longer have the right to bring a claim in court that is decided by a jury of your peers. Instead, if you do have a claim, it will be decided by an arbitrator, who is a lawyer or former judge, whose fees are being paid by the employer and who is not likely to give you the type of fair hearing that you would expect from a jury.

Think about it. If an arbitrator were to find for the employee and award him or her several hundred thousand dollars in damages or more, the arbitrator knows the next time he is in consideration for being hired as an arbitrator, word of the judgment in favor of the employee will get around to the lawyers for the companies. As a result, he may have a very hard time getting future work as an arbitrator. Therefore, he knows that the employer’s reaction to his award is going to be important to his future livelihood and it will likely have an effect on his ability to be impartial (even if it is only on a sub-conscious level.) In contrast, a jury of fellow citizens is not beholden to anyone but themselves and the community they represent. The jurors do not have to worry about getting the corporate defendant upset by a large verdict. They will go home after the trial and never see the employer again. This is why the Seventh Amendment to the United States Constitution guaranteed a right to a trial by jury. Our Founding Fathers knew it is better for average people to have their claims decided in court by a jury. The rationale is only solidified when one considers the present day forced alternative of a professional arbitrator who is being paid tens of thousands of dollars by the company that he is being asked to rule against.

The United States Supreme Court, along with numerous lower courts throughout the nation, have ruled that forcing employees to sign away their right to a jury trial is perfectly legal, even if the employee had no choice and was subject to “an adhesion” contract where the employee had no right to negotiate the terms of these agreements. These types of take it or leave arbitration agreements are found in all types of contracts, from your credit card, to your cell phone, to your bank, and, even worse, to your employment. Given the current make up of the Supreme Court, this trend is only likely to get worse unless Congress acts to fix this terrible problem.

The Arbitration Fairness Act of 2013 is being considered by Congress. We urge you to call your congresssional representative and your senator and urge them to support the Arbitration Fairness Act in order to get rid of the private justice system which favors large corporations over the interests of workers and consumers.

For more information on the Arbitration Fairness Act, please click here.

Please click here to search for the contact information of your senators and representatives and urge them to support the Arbitration Fairness Act.

Michael D. Seplow is a partner at the Venice office of Schonbrun Seplow Harris Hoffman & Harrison LLP, where his practice focuses on representing workers and individuals in employment and civil rights cases.