Arbitration is a private process in which two or more parties settle an agreement outside of the courtroom with an arbitrator instead of a judge. This is a more discreet way of settling a dispute than going to court and is often preferred by companies and corporations for confidentiality reasons. In a private setting like an arbitration meeting, companies do not have to worry that their trade secrets or other private information will be accessible to anyone outside of the arbitration agreement.
An arbitration process can resemble a trial in that both parties make opening and closing statements and present evidence to the arbitrator, but there are several major differences. Aside from settling disputes more quickly than a trial process, parties in arbitration often do not have to follow state or federal rules of evidence. Arbitration usually favors the employer and prevents workers from banding together to bring an employer to court.
While arbitration can be a useful tool in settling disputes between two parties when both willingly consent to the process, it is now being used in a more sinister way. More and more employers are utilizing mandatory arbitration clauses to undermine their employees’ rights.
What Is an Arbitration Clause?
The idea of a fair workplace that is free of discrimination is a shared American value. While many of the fortune 500 companies tout this ideal in their brochures and write-ups, their actual practice looks quite different. Instituting mandatory arbitration clauses in employee contracts is a way in which employers can effectively strip employees of their rights. In the event of a workplace dispute, employees with an arbitration clause in their contract cannot take their employer to court and are forced into a secretive arbitration process, which is known to favor the employers over the employed.
The Supreme Court Ruled in Favor of Mandatory Arbitration
Just this year, the US Supreme Court ruled that the National Labor Relations Act does not protect workers from mandatory arbitration clauses with class action waivers being written into their contracts. Imagine waking up and finding an email in your inbox titled “Mandatory Arbitration Agreement.” You open and read several paragraphs of legal jargon explaining that you have waived your right to take your employer to court, either alone or as a group, and agree to settle all future disputes in arbitration.
At the bottom of the email, you discover that there is nowhere to sign. Instead of a “sign here” box, you find a statement saying something like, “I understand that as long as I continue to work for this employer, it is deemed that I have accepted this agreement.” In this situation, if you wish to remain employed, you must waive your right to band together with other employees to hold your employer accountable in court.
Shortly after the Supreme Court made this ruling, Ogletree Deakins, one of the nation’s leading labor and employment law firms, launched a DIY arbitration clause generator to make it easy for even small businesses to start adding arbitration clauses to their employment contracts. Almost instantly, businesses across the country began writing in their own arbitration clauses. If you aren’t already one of the 60 million Americans subject to mandatory arbitration agreements, you might find yourself among them soon.
Arbitration Clauses Impact the Workforce and Society
Evidence shows that disputes settled in arbitration produce a much different outcome than the same dispute settled in litigation and almost always favor the employer over the employed. Arbitration tends to suppress claims made by the employee. When damages are awarded, they are often much smaller than if the damages had been awarded in court. Because claims made in arbitration are so much less likely to succeed, few attorneys are willing to represent clients who are subject to arbitration clauses. Because of the difficulty of finding an attorney willing to represent them, few employees with arbitration clauses bring claims against their employers.
While employees forced into new mandatory arbitration agreements might be the first to suffer because of the Supreme Court’s ruling, individual workers are not the only ones who will take a hit. Historically, workers’ right to band together and bring their employers to court has been integral in advancing civil rights and a key component in the fight for equal opportunity for employment by shining a light on discriminatory employment practices within the workplace.
California Employment Counsel, APC Will Fight for You
If you are subject to a mandatory arbitration clause and wish to make claims against your employer, California Employment Counsel, APC is here to fight for your rights. Our experienced attorneys will work tirelessly on your behalf. Call us today at (714) 942-2178, or visit us online.