Building on our earlier Institute report by Prof. Imre Szalai of the Loyola College of Law, Forced Arbitration: A Race To The Bottom breaks down the “what, how, & why” of forced arbitration and reveals that at least 52 Fortune 100 companies use forced arbitration in their employment contracts. Of those, 30 also ban employees from joining any class, collective, or joint legal actions when wronged in the workplace—a number that is likely to increase in the wake of the U.S. Supreme Court’s recent decision in Epic Systems v. Lewis. The report also explores some of the state and federal legislative solutions that potentially are available to protect workers from this harmful practice.
Three inspiring reminders in three minutes: Sometimes justice prevails, forced arbitration is a system for letting fraudsters hide their crimes, and class actions offer real benefits to people like you and your neighbors
From Paul Bland of Public Justice:
WOW. This FOX affiliate's "Reality Check" is an amazingly good piece of local TV journalism. WELL WORTH A WATCH.
Please share the video at the link with as many people as you can. Until everyday people realize just how badly the justice system has been privatized, corrupted, and turned against us, the real people, businesses will keep getting away with using arbitration to cover up their crimes and they will continue pouring money into campaigns to lock in their unfair dispute resolution scheme, where they get to use the power of the courts against you, but not the other way around.
Popular outrage is the only antidote. We have to start defeating any candidate for federal office who won't make fixing this mess a top priority.
"In a decision just two days ago, a federal judge appointed by George W. Bush felt compelled by U.S. Supreme Court decisions to enforce an arbitration clause even though the judge noted that
(a) the court did not believe that the plaintiffs ever believed they were signing away their right to bring a lawsuit;
(b) enforcing the clause would “undermine effective enforcement of federal antitrust laws”; and
(c) enforcing the clause after the defendant first had decided to litigate in court was “inefficient and wasteful.”
The court concluded that in this area of law, “common sense plays no role.”
Here’s a blog post about the case, with link to the decision:
This is a true poster child of arbitration abuse, really highlighting just how unfair the law has gotten under the current U.S. Supreme Court’s decisions. If people will read this decision, they may well get a sense of just how out of whack the law has gotten in this area."
Emily Bazelon's explanation of a recent Obama executive order is posted on Slate.
Private binding arbitration clauses don't just screw consumers and employees. They also hurt investors -- including the people who just have their pension and retirement savings in 401(k) plans or other retirement savings plans -- because private binding arbitration is how corporate managers prevent anyone from knowing how badly they are screwing up and mistreating people (customers, employees), which creates huge liabilities. If you're an investor, you should tell your companies to stop giving management cover for wasting investors' money -- tell them to stop using private binding arbitration clauses, so that you have a way to keep an eye on your money.
"Think about it. If American Apparel and Mr. Charney had been subject to public lawsuits, how long could have Mr. Charney lasted?"
Just when you think the corporate drive to avoid having to answer for wrongdoing can't get more insane or over the top
When I first read about this, I was certain that I was reading a sly parody from "The Onion" or some other satirical publication. But then I found that the jokers behind this are deadly serious about it. In other words, General Mills has decided to promote itself to General LeMay and bomb the Constitution and your rights as an American to little super-sugarsaturated bits.
General Mills has granted itself a license to break the law. The owner of grocery staples including Trix, Cheerios, Betty Crocker, and Pillsbury, has quietly updated its terms of service to include a forced arbitration clause that eliminates its customers’ rights.
This means if you get salmonella poisoning from your Cinnamon Toast Crunch, you will not be able to hold General Mills accountable in court, and if you are cut by Old El Paso salsa that contains chunks of glass, your access to justice is denied. And yes, these were real things that happened last year!
Forced arbitration clauses allow corporations like General Mills to kick customers out of court and funnel them into an un-American dispute mill that is rigged, secretive and final -- and that denies you ANY ability to appeal, no matter how abusive the process.
If General Mills is not accountable, their customers are not safe.
Take action now! Write to Congress to urge them to protect their constituents from the abusive practice of forced arbitration!
And because we aim to help consumers around here, here's a helpful list of products you will want to avoid if you value your Constitutional rights as an American:
Finally a story that might get people's attention to help explain how and why mandatory arbitration = abomination when used against consumers and employees
It's hard to get people to understand how they're being robbed and denied their rights when it happens without guns or violence.
But a lot of times, companies rip off customers and exploit their workers unfairly, and it's not until you try to do something about it that you find out that the company has built itself an "Accountability Shield" that does to the civil justice system what Kryptonite does to Superman -- allows the bad guys to escape the consequences of their wrongdoing, and leaves the good guys weakened or flat-out defeated.
Every story needs a hook to get and hold the reader's attention long enough for the message to be received. For a lot of guys, a story about hot young women being mistreated by their employer is a strong enough signal to get their attention, and then they can finally get the message. And, of course, young women, who are often mistreated horribly in the workplace, can understand that even the most superficially exciting jobs can really be terrible grinds -- made much worse by the arbitration clause that essentially lets the company get away with anything short of murder.
Historian shows how our "textualist" Supreme Court happily throws the Constitutional text overboard to serve corporate "citizens" and steal the 7th Amendment Right to Jury Trial from real citizens
By Paul Bland:
This post examines a recently published book by an extraordinary law professor, Imre Szalai, who has gone back through the papers of the three men who drafted and lobbied for and pushed the Federal Arbitration Act. In painstaking historical detail, reviewing all sorts of primary materials, he establishes convincingly that the FAA was never intended to (a) apply to employment contracts at all; or (b) apply to take-it-or-leave-it contracts. This book is an important development in the historical scholarship on the Act, and demonstrates conclusively that the FAA has been distorted and mis-shaped by the U.S. Supreme Court in recent decades. The Act now covers millions of people and transactions that it was never intended to address.
The advocates of forced arbitration are literally on the wrong side of history – the Court’s decisions fly in the face of what the authors and supporters of this statute had intended.
Senior Attorney, Public Justice
Of Counsel, Chavez & Gertler
On Twitter @PblandBland
John Gear is a Salem attorney in solo practice