Over the past decade, more and more employers are insisting that anyone who works for them must sign an arbitration agreement as a condition of employment. Arbitration agreements mean that employees are forced to give up their Constitutional right to trial by jury if they want to keep their job. Instead, all workplace disputes – including an employee’s claims for discrimination – are decided by a private arbitrator hired by the employer, rather than in court.
Some employers defend their insistence on arbitration agreements by pointing to media hype and some analytical comparisons between arbitration and court resolutions to suggest that arbitration is a faster, less expensive way to resolve disputes. Whether this is true is the subject of some debate. However, this position is taken as gospel corporate America.
But two unspoken reasons are also driving the trend toward arbitration. First is the fact that arbitration results tend to favor employers over employees. There are lots of institutional reasons for this bias, starting with the fact that the corporation is responsible for actually paying the fees for the arbitrator. Also, employers end up being “repeat players,” hiring the same arbitrator over and over. This exerts a natural pressure on arbitrators to issue pro-employer decisions so that they will be hired again. Also, since almost all arbitrators are lawyers and many are ex-judges, they tend to be more conservative than potential jurors, which makes very large awards unlikely.
The other unacknowledged motivation behind forced employment arbitration is that employers want to keep disputes a secret. By forcing employees to litigate their disputes in a private setting, corporations can avoid the bad press that accompanies trials. Not only does this help the corporations maintain the pretense of a clean reputation, it means that a favorable verdict will not result in more employees coming forward and filing lawsuits.
The bottom line is this – employers are using their superior bargaining position to force employees to give up their right to a jury trial and move into the shadows of an arbitration system stacked against them from the outset. Introduced by Senator Al Franken, the Arbitration Fairness Act of 2013 would ban forced arbitration in employment, consumer and civil rights disputes. It only takes a minute to send an email to your United States Senator urging support for the Act!
