Can we end forced arbitration for employees?

The Attorneys General of all 50 states, the District of Columbia and 5 U.S. territories have sent a letter to Congress demanding that it take action to end forced arbitration for sexual harassment claims.  They note that arbitration takes away victims' ability to have their case heard by a judge and jury, and that confidentiality provisions in arbitration agreements prevent serial sexual harassers from being exposed.


This would be a good start, but the proposal doesn't go far enough.  Forced arbitration should be banned in the employment context for all claims.  Arbitration is supposed to be a matter of contract.  Most employees who are subject to such "agreements," however, have absolutely no bargaining power.  They are simply presented with the "agreement" as part of the on-boarding process, and have no ability to negotiate.


Further, forced arbitration heavily favors employers.  Research has shown that employees win arbitration cases in only 21.4% of cases, compared to 36.4% of cases in federal courts and 57% of cases in state courts.  The average damages awarded in arbitration is $23,548, compared to $143,497 in federal court and $328,008 in state court.  These figures show why more and more employers are insisting on forced arbitration "agreements" with their employees.


Another problem arises when forced arbitration "agreements" are combined with class action waivers.  Since 2011, the U.S. Supreme Court has allowed arbitration "agreements" to include waivers of the right to bring or participate in a class action.  There is an argument, however, that such a waiver violates the National Labor Relations Act by precluding employees from engaging in "concerted activity."  The question is currently in front of the U.S. Supreme Court in a case called Epic Systems, Inc. v. Lewis.


Representative Hank Johnson (D-GA) and former Senator Al Franken (D-MN) introduced the Arbitration Fairness Act of 2017, in order to prevent forced arbitration in employment, consumer, antitrust and civil rights cases.  Unfortunately, given the current makeup of Congress, the bill will not be passed.  Efforts to reform the arbitration system, however, will (and should) continue.

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