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By Michele R. Fisher
Partner

Legislation Against Arbitration Follows Boycotts Against Businesses Who Force Arbitration Agreements on Workers

Workplace harassment, sexual assault, wage theft, unequal pay, and discrimination, are all examples of claims workers are being forced to resolve, not in a court by a jury of their peers, but in the secrecy of arbitration, by a private arbitrator, behind closed doors, and subject to strict confidentiality.  One reason companies prefer arbitration over court is that they can prohibit workers from proceeding as a class, which makes workers less likely to bring a claim at all.  Another reason is that employers can keep illegal workplace conduct secret and prevent other workers from realizing they too may have a claim.

Recognizing the rapid erosion of fundamental worker rights, legislators, lawyers, interest groups, grass roots organizations, and even employees themselves, are acting.  Yesterday, lawmakers introduced a bill in both houses entitled the Forced Arbitration Injustice Repeal (FAIR) Act.  The goal of this, and other related legislation, is to ensure employees and consumers can pursue individual and class action lawsuits in court.

The proposed legislation comes after several Supreme Court rulings that have paved the way for employers to enforce arbitration agreements that stop individuals from going to court when their rights are violated and prevent them from joining or filing class actions.  One worker advocacy group estimates over 60 million employees are subject to mandatory arbitration agreements.

Worker rights attorneys are giving employers a lesson in “be careful what you wish for” as they file hundreds, and even thousands, of individual workplace claims in arbitration.  For example, Chipotle has faced a flood of individual arbitrations from former low-wage workers determined to win the unpaid wages they claim they are owed.  Uber similarly is facing thousands of mass individual arbitrations for drivers seeking unpaid wages and is responsible for paying over $18 million in filing fees alone for the arbitrations.  Nichols Kaster, PLLP attorneys have been active in the movement as well, filing hundreds of mass individual arbitrations against employers over the past several years.  In many cases, forced individual arbitration has backfired for employers causing them to rethink whether arbitration is really the panacea they expected.

Law students are also joining the fight. The Pipeline Parity Project is an organization started by several Harvard law students.  By boycotting employment at several large law firms, they have pressured the firms to abandon arbitration polices covering employment disputes.   

Workers are refusing to sign arbitration agreements and are staging protests against forced arbitration.  Thousands of Google workers walked off the job late last year as part of a demonstration to change workplace policies.  Earlier this year Google became the latest tech company to announce it would no longer require its employees to arbitrate employment disputes.  Several Google workers appeared at the introduction of the FAIR bill yesterday.

The bill will have the best chance of passing if a Democratic President is elected in 2021.  

Photo by Caleb Fisher on Unsplash