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Archive for the ‘Arbitration versus law suit’ Category

>Is It Fair? Some Employees Can’t Sue?


November 24, 2008 
Steven Holmes  wrote a NY Times story clear back in 1994 that more and more companies require  their employees to submit claims of discrimination to binding arbitration.  And that includes sexual harassment cases. writePost();new_york_times:

Some companies are unilaterally imposing the restriction on their nonunion employees, while others are insisting that job applicants forfeit their right to sue as a condition of employment, the Times said.

What’s worse, companies are making such an agreement a condition for promotion, stock options or other benefits.

I’m a conservative, too, but this is going way too far, don’t you think? I’m of the large group of Americans who believe if something egregious happens at work the employee should have the right to an attorney and, as a last resort, sue if necessary.

The problem you run into is when the pendulum swings too far to the left, meaning that some radical–and not too radical–employees will sue on the drop of a hat. That is where a combination of the two is appropriate. Require arbitration up to a point and when the case crosses the line, let them sue.

The problem comes in defining where that line is. Is it in the length of time a person has been discriminated against? Is it a dollar figure, such as the amount of actual loss someone has incurred? For example, if an employee can prove they are more competent than another person and were overlooked for promotion strictly because they wouldn’t sign the mandatory arbitration form, then the employee can go back to the date of the infraction and figure out how much money he lost and if it is over a set amount, say $10,000, I would allow that employee to file suit.

The story said corporations like ITT, Hughes, Rockwell International, NCR, Brown & Root and Travelers have adopted policies that require arbitration for discrimination claims, often precluding workers from filing lawsuits in Federal courts, according to court records, representatives of some of the companies and lawyers involved in civil rights litigation.

Other companies, like TRW, General Mills, MCI and Conoco, were considering putting similar policies into effect. Watching From the Sidelines. Lawyers involved in civil rights litigation say scores of other companies were waiting on the sidelines to see how Congress and the Supreme Court will deal with the issue. Some members of the House are beginning to study these practices, and the Supreme Court has dealt with them only once, upholding the policy on fairly narrow grounds.

Three years ago, in Gilmer v. Interstate/Johnson Corp., the Court upheld the legality of requiring licensed securities dealers to submit claims to arbitration panels, like the one established by the New York Stock Exchange, as part of a dealer’s licensing agreement.

Citing the Gilmer case, a string of lower-court decisions has held that it is legal for companies to require new employees or those accepting promotion to agree to submit future complaints to arbitration. But the courts have not ruled on whether it is legal for companies to tell current employees that as of a certain date they may not bring a complaint of discrimination or harassment to court and must instead submit to arbitration. Thwarting Congress?

The issue involves only nonunion workers because the Supreme Court has long held that workers cannot lose their right to sue as a result of a collective-bargaining agreement. Civil rights lawyers say that companies that require binding arbitration for discrimination complaints are thwarting the will of Congress, which in 1991 voted to allow jury trials and larger damage awards in cases involving bias on the basis of sex, religion or disability. Before the passage of the Civil Rights Act of 1991, cases were heard by Federal judges, and awards were limited to back pay and lawyer fees.

“What’s going on is that Congress has passed significant employment laws like the Civil Rights Act and the Americans with Disabilities Act, and companies are basically opting out of the law,” said Cliff Palefsky, a San Francisco lawyer who represents plaintiffs in discrimination cases.

Some lawmakers who are looking at the issue said that Congress wanted jury trials in discrimination cases because it was felt that the Federal judiciary was dominated by white men who, in awarding damages to plaintiffs, might undervalue the pain and suffering of discrimination or sexual harassment.

“If Anita Hill had been a stock broker and had been sexually harassed by her employer, would she really get a fair hearing from a panel of white males who are managers in the securities industry?” asked Representative Edward J. Markey, Democrat of Massachusetts.

Lawyers and spokesmen for corporations that routinely submit discrimination claims to arbitration say they merely want to provide a quicker and less costly means for all parties of resolving employee disputes and to keep such fights out of an overburdened Federal court system. “It is a way for individual employees, without having to spend a lot of money, to vindicate their rights,” said Bob Carabell, the senior labor counsel for T.R.W., which is considering a form of arbitration. Arbitration should be less expensive than law suits, however in each case you probably need an attorney representing you so what’s the difference?

I invite my readers to comment on this story. Please let me know how you like to read this type of story, give me some advice, some feedback, and contrary opinions. email me at or click the COMMENT  box below.
Don White