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Forced arbitration silences sexual harassment victims. After protests, Google finally got rid of it.

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One week after 20,000-plus Google employees around the world staged a mass walkout to protest the company’s discrimination and its abysmal handling of sexual misconduct complaints against top-level executives — as the New York Times reported, multiple senior executives were granted multimillion-dollar severance packages or promotions after being accused of sexual violence — the company has announced revisions to its sexual harassment policy. Top of the list: An end to forced arbitration clauses.

In a memo to all employees, Google CEO Sundar Pichai detailed the changes employees could expect, and though the first bullet point about arbitration came with some defensive caveats (“Google has never required confidentiality in the arbitration process and arbitration still may be the best path for a number of reasons”), the change is a meaningful one that appears to be catching on among tech giants.

Chances are, you’ve signed a policy just like this one without even realizing it. As of 2017, more than half of American workers were bound by arbitration clauses, according to the Economic Policy Institute.

And if you didn’t sign one at work, you may have signed one elsewhere: In May, Uber announced it would be eliminating forced arbitration agreements for employees, riders, and drivers who make sexual assault or harassment claims against the rideshare company. Which means, until May, if you were an Uber rider, buried in the Terms & Conditions that virtually no one reads was language that forbade you from taking a sexual misconduct claim against Uber to the courts.

As the New York Times reported, Uber already allowed drivers and employees to get out of those agreements as long as they opted out within the first 30 days of signing their Uber contracts — but no such provision was in place for the riders.

Last December, Microsoft announced that it was eliminating forced arbitration agreements with employees who make sexual harassment claims. The company also declared its support for a proposed federal law that would essentially ban these still-commonplace agreements. “The silencing of people’s voices has clearly had an impact in perpetuating sexual harassment,” Brad Smith, Microsoft’s president and chief legal officer, told the New York Times.

And it was a forced arbitration clause that Fox Chairman and CEO Roger Ailes lorded over Gretchen Carlson, who sued him for sexual harassment in 2016. He fought back by pointing to the language in her Fox contract that barred her from bringing those claims to court and requesting that the court compel Carlson to engage in arbitration instead.

Carlson’s contract didn’t just stop her from bringing her claims to the justice system; it stipulated that “all filings, evidence and testimony connected with the arbitration, and all relevant allegations and events leading up to the arbitration, shall be held in strict confidence.” At least a dozen women reported similar experiences, with parallels not just to the initial harassment but with Ailes’ weaponizing of legal language in their employment contracts.

Other changes to Google’s sexual harassment policy, according to Pichai’s memo, include: “more granularity” around sexual harassment investigations and outcomes; an “overhaul” and consolidation of the means by which employees can report misconduct; “extra care and resources” for Google employees throughout the reporting process, with “extended counseling and career support”; and updated and expanded mandatory sexual harassment training, with failure to comply resulting in negative performance reviews.

Left unaddressed are workers’ demands that the internal harassment report be made public and that an employee representative be added to Google’s board. Only full-time employees are covered by the changes Pichai describes; contractors, vendors, and temporary workers are not.

Google Walkout For Change, the organizers behind last week’s mass demonstration, issued a statement that “commend[ed] this progress, and the rapid action which brought it about,” but called out what the workers’ perceive as the memo’s shortcomings. Mainly, “The company must address issues of systemic racism and discrimination, including pay equity and rates of promotion, and not just sexual harassment alone.”

Last year, Senators Lindsey Graham (R – SC) and Kirsten Gillibrand (D- NY) introduced legislation that would void arbitration agreements that prevent sexual harassment victims from seeking justice through the courts. It also allows victims to file EEOC complaints in addition to pursuing legal action in court, and it prevents employers from compelling arbitration, even in cases where the employee already signed an agreement with a forced arbitration clause.

A bill similar to the one introduced in the Senate, the Ending Forced Arbitration of Sexual Harassment Act of 2017, was introduced in the House by Rep. Cheri Bustos (D-IL). It
has bipartisan support and has been referred to the House Judiciary Committee. In 2019, with a Democratic majority in place, the House might actually pass it.

This article was originally published at ThinkProgress on November 10, 2018. Reprinted with permission. 

About the Author: Jessica M. Goldstein is the Culture Editor for ThinkProgress.


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Congress introduces record number of bills to prevent people from taking industry to court

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Industry-friendly lawmakers are waging a coordinated campaign with the Trump administration to strip Americans of their legal rights to use the courts to hold polluting companies and the government itself accountable for violations of bedrock environmental laws and other important public protections.

Members of Congress have introduced more than 50 bills over the past year that would make it extremely difficult or impossible for people to seek justice in a court of law, according to an in-depth analysis by Earthjustice, a nonprofit environmental law organization. The proposed bills are targeting laws related to environmental protection, public health, consumer rights, and civil liberties.

The number of bills introduced in the current 115th Congress that would strip individuals of their legal rights to seek justice in a court of law have doubled from the previous Congress and quadrupled since the 112th Congress that ended in 2013. Similar to how credit card companies and other retailers block consumers from the use of a court of law to resolve disputes, these bills would have a similar effect by preventing aggrieved members of the public from filing lawsuits to ensure laws are enforced.

“The corporate interests that stand to benefit from these types of provisions see this window of time as an opportunity,” Patrice Simms, vice president of litigation at Earthjustice, said in an interview with ThinkProgress. “They have a president that they know will sign anything that benefits them and they have majorities in the House and Senate that they believe are willing to move the bills forward.”

Earthjustice has created an interactive tool that tracks each of these pieces of legislation. If passed into law, these bills would erect permanent obstacles that will prevent people and communities from going to court to defend their rights.

During the current Congress, 12 bills with a combination of threatening provisions have passed the House of Representatives. The president has signed one into law: H.J.Res. 111 repealed the Consumer Financial Protection Bureau’s rule prohibiting banks, lenders, and other corporations from forcing consumers with grievances into arbitration. This law also prevents individuals from joining together in class action lawsuits in federal courts against banks, predatory lenders, and other bad actors.

Members of the George W. Bush administration, including some appointed by President Donald Trump to high-level positions in his administration, wanted to see similar restrictions placed on the rights of individuals to have their day in court. “Usually, it’s been a pretty extremist view,” said Jessica Culpepper, an attorney with Public Justice, a nonprofit law firm that focuses on environmental protection, consumer rights, and civil liberties.

For many years, a contingent in Congress has tried to limit the ability of citizens to use “bedrock environmental laws” like the Clean Water Act to protect themselves. “What is frightening is that at least with the Bush administration, some things were sacred. You still couldn’t get a lot of support for stripping citizens’ abilities to protect themselves,” Culpepper said. “And now those things are on the table.”

Congressional Republicans have been trying for years to get these types of bills passed. They’ve been introduced before, but typically only to make certain industry constituents happy, with little chance of passage, according to Culpepper. The bills “have not been as big of a threat” as they are under the current Congress, Culpepper told ThinkProgress.

According to Earthjustice, the list of bills from the current Congress attacking individuals’ access to justice include:

  • 6 bills with provisions to eliminate judicial review, eroding the role of courts as a check and balance on other branches of government.
  • 14 bills that could effectively strip people of their right to sue by either forcing them into arbitration or blocking their ability to join together in class action lawsuits.
  • 17 bills that would make it too expensive to sue, forcing members of the public to bear the burden of costly litigation against the government.
  • 10 bills that meddle with timely resolution through settlements, forcing government agencies to draw out challenges through costly litigation fights.

One bill, dubbed the “Farm Regulatory Certainty Act” by its industry backers, was introduced in the previous Congress and didn’t move at all. But in the current Congress, the bill is gaining momentum, with more than 60 co-sponsors. Culpepper delivered testimony to a congressional hearing in November in which she described the bill as an effort to shield “an entire industry from liability.” The bill “would essentially “strip rural Americans from their right to protect their drinking water,” she told lawmakers

Congress recognizes it cannot simply repeal the laws it doesn’t like. Its members can’t say, “We’re going to get rid of the Clean Water Act.” But what they do see they can do is engage in “this furtive attempt to undo the protections that those laws actually provide,” explained Simms.

By furtive attempts, Simms is referring to how certain lawmakers now realize that if an environmental law, for example, cannot be undone by direct repeal, they can try to pass bills that make the laws impossible to enforce. For example, the House of Representatives last October passed a bill that would prevent the Environmental Protection Agency (EPA) and other federal agencies from settling lawsuits, even when the government has acted unlawfully.

House Republicans have dubbed the bill, H.R. 469, the “Sunshine for Regulations and Regulatory Decrees and Settlements Act.” Earthjustice prefers to call the bill by describing its real intent: “Delaying Public Health Protections.” The bill still has not passed the Senate.

Simms said this particular bill is a prime example of how congressional Republicans are working closely with the Trump administration on these types of bills. “There’s a degree of coordination between Congress and the administration that I have not seen in the past,” he said. “They’re coming back over the course of the last year with an intensity that we have not seen before and a coordination that I have not seen in the past. This is really something frightening.”

H.R. 469 reflects almost exactly the policy adopted by the Trump administration. In mid-October, EPA Administrator Scott Pruitt announced his agency would no longer engage in settlement discussions with public interest lawyers, what anti-environment lawmakers refer to as “sue and settlement” practices. “What did we see several weeks later? A bill gets passed in the House that would essentially codify that and apply it not to just EPA but all agencies,” Simms said.

The bill would inhibit the EPA and other federal agencies from settling lawsuits, even when the government has acted unlawfully. This drags out legal action, raising costs for plaintiffs, and allows the administration to avoid enforcing environmental regulations, leading to more pollution and industrial harm to communities, according to Earthjustice.

In her 10 years as an environmental and public interest attorney, Culpepper said she’s never seen so many bills introduced at once — bills that would roll back individuals’ ability to use the courts to seek justice — that have a good chance of moving through Congress. “I spent more time fighting these things in 2017 than I have in my an entire career,” she said.

This article was originally published at ThinkProgress on February 12, 2018. Reprinted with permission.

About the Author: Mark Hand is a climate and environment reporter at ThinkProgress.


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Congress Just Killed Your Right to a Day in Court

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Last week, 50 Senators joined Vice President Mike Pence to kill one of the most important advances in consumer rights in years.

By casting the tie-breaking vote to kill the Consumer Financial Protection Bureau’s arbitration rule – which allowed consumers to band together to sue banks, financial institutions and credit card companies – Pence showed just how much power Wall Street has amassed on Capitol Hill and on Pennsylvania Avenue. It also unmasked the alarmingly cozy relationship between GOP leaders and the bank executives who defrauded millions of consumers and exposed their most important information to Equifax hackers.

As I told one reporter , “This was the Wells Fargo Immunity Act.”

Public Justice was proud to be a leading voice in the effort to defend the CFPB rule and help consumers fight back against the big banks that defraud their own customers. But make no mistake:  This vote was a big setback for consumer protection, but it did not kill the resolve of those of us who will continue to fight alongside the CFPB in order to give Americans their day in court.

Now that consumers have learned what’s at stake, there’s going to be more pressure from constituents for lawmakers to stop the kinds of behavior we’ve seen from Wells Fargo and Equifax, among others. This vote, though heartbreaking for those of us who believe in protecting the little guy, may well turn out to be a huge catalyst for future change.

With your help, we will keep fighting to keep the courthouse doors open.

This blog was originally published at Public Justice on October 30, 2017. Reprinted with permission. 

About the Author: Paul Bland has been a senior attorney at Public Justice since 1997. As Executive Director, Paul manages and leads Public Justice’s legal and foundation staff, guiding the organization’s litigation docket and other advocacy.


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Forced Arbitration Protects Sexual Predators and Corporate Wrongdoing

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Fox News.  Sterling Jewelers.  Wells Fargo. 

What do they all have in common?  For years, they successfully kept corporate wrongdoing secret, through forced arbitration.

Buried in the fine print of employment contracts and consumer agreements, forced arbitration clauses prohibit you from going to court to enforce your rights.  Instead, employees who experience harassment and discrimination, or consumers who are the victims of financial fraud or illegal fees, are sent to a private arbitration forum.  Frequently designed, chosen, and paid for by the employer or corporation, in arbitration everything is conducted in secret. People who suffered the same abuses often can’t join together to show how rampant a problem is and confront a powerful adversary—and people are less likely to come forward at all, because they have no idea they aren’t alone.

When Gretchen Carlson sought her day in court over sexual harassment allegations against Roger Ailes, her former boss at Fox News, Mr. Ailes’s lawyers had a quick response: send the case to forced arbitration.  After she filed suit, he also invoked a clause that reportedly required absolute secrecy: “all filings, evidence and testimony connected with arbitration, and all relevant allegations and events leading up to the arbitration, shall be held in strict confidence.” It was only because she resisted that clause through a creative legal theory that her allegations were made public—unleashing a tsunami of claims of sexual harassment by Ailes and others at Fox News.

Hundreds and maybe thousands of former employees of Sterling Jewelers, the multibillion-dollar conglomerate behind Jared the Galleria of Jewelry and Kay Jewelers, known for advertising slogans such as “Every kiss begins with Kay,” were allegedly groped, demeaned, and urged to sexually cater to their bosses to stay employed.  The evidence of apparent rampant sexual assault was kept secret for years from other survivors and the general public through gag orders imposed in forced arbitration.

The same thing happened at American Apparel, where employees and models were forced to arbitrate sexual harassment claims and keep the details secret, and the proceedings were reportedly a sham.

We don’t yet know if Hollywood producer Harvey Weinstein used forced arbitration to suppress allegations of his decades-long campaign of sexually harassing, abusing, and assaulting young assistants, temps, employees and executives at the Weinstein Company and Miramax.  But the clauses may well have played a role, and his nondisclosure agreements and secret one-by-one settlements worked to the same effect.

And forced arbitration clauses do not only hide wrongdoing in sexual harassment cases.  Corporations also use forced arbitration to isolate victims and cover up massive, widespread wrongdoing in the financial sector.

For example, forced arbitration clauses found in legitimate customer accounts let Wells Fargo block lawsuits related to the 3.5 million sham accounts it opened; as a result it kept its massive scandal secret for years, and then lied to Congress about it.  People began trying to sue Wells Fargo in 2013, but cases were pushed out of our public courts into secret arbitrations, and Wells Fargo continued creating fake accounts.

KeyBank, like Wells Fargo, has also used forced arbitration to keep disputes secret and block relief for people charged overdraft fees when their accounts weren’t overdrawn.  A court recently ruled “unconscionable” KeyBank’s provision requiring a customer to “keep confidential any decision of an arbitrator.”  But the court allowed KeyBank to force the plaintiff to arbitrate his case individually, despite the fact that thousands or millions of KeyBank customers were subject to the same abuses. These customers were not permitted to come together to challenge these abuses as a group in court, because of forced arbitration.

By imposing secrecy and isolating victims, forced arbitration shields corporate wrongdoing and leaves it more difficult for those harmed to hold the wrongdoers accountable.  That’s why the Consumer Financial Protection Bureau issued a rule earlier this year prohibiting banks, payday lenders and other financial companies from using forced arbitration to cover up widespread frauds, scams and abuses.  This is a first step in the right direction of restoring Americans’ rights to challenge predatory practices.  But some in Congress have threatened to block this important protection. 

Earlier this year, Congress and President Trump overturned rules that prohibited employers with federal contracts from forcing employees to arbitrate sexual harassment or sexual assault claims, or claims alleging discrimination on the basis of sex, race, or religion.  In so doing, they took power away from women facing sexual harassment and returned it to those trying desperately to keep that harassment under wraps.

We cannot tolerate another blow against Americans seeking to hold the wealthy and powerful accountable.  The CFPB’s rule must be permitted to go forward. 

This blog was originally published at Public Citizen Litigation Group’s Consumer Law & Policy Blog on October 23, 2017. Reprinted with permission. 

About the Author: Emily Martin is General Counsel and Vice President for Workplace Justice at the National Women’s Law Center. She oversees the Center’s advocacy, policy, and education efforts to ensure fair treatment and equal opportunity for women at work and to achieve the workplace standards that allow all women to achieve and succeed, with a particular focus on the obstacles that confront women in low-wage jobs and women of color.


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Trump’s Justice Department Is Trying to Turn Back the Clock on Workers’ Rights 100 Years

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On Monday, the Supreme Court heard oral arguments in a trio of cases, captioned as NLRB v. Murphy Oil, that examined whether management commits an unfair labor practice when it requires employees to sign arbitration agreements that waive their right to wage class-action lawsuits. The question of whether an employee can give up her right to act in concert with other workers may seem technical, but it implicates the very core of collective action.

During the hearing, Trump’s Department of Justice clearly sided with employers, who are calling for significant cutbacks to workers’ rights to take collective action.

The significance of this case was evident throughout the oral arguments. On one side the National Labor Relations Board (NLRB) and a University of Virginia Law Professor argued that the issue implicates the basic employment rights of tens of millions of U.S. workers. On the other side, the Principal Deputy U.S. Solicitor Jeff Wall (“Solicitor”) and an attorney for the companies argued that these are technical issues related to contract and civil procedure.

The case revolves around a key question: Do forced arbitration agreements that ban collective or class legal actions violate Section 7 of the National Labor Relations Act (NLRA)? That section permits employees “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

The employers’ and Solicitor’s position is that Section 7 only protects workers’ rights to get to the “courthouse door.” According to the line of reasoning this side presented in the courtroom, the NLRA gives workers the right to act together at work, but the moment their workplace concerns get to a legal forum, they have no right to continue together. Once they enter the courtroom or arbitrator’s chambers, the argument went, all parties must abide by the rules of the forum, be it the NLRB, the federal courts or the arbitrator. They argued that this principle applies even if those rules require workers to proceed individually.

The problem, of course, is that there is a long history of employers using forced contracts to require employees to waive their rights as a condition of employment.

Justice Ruth Bader Ginsburg invoked this history when she asked the attorney for the employers whether forced arbitration agreements are simply “yellow dog” contracts by another name. This was a reference to contracts where employees agree not to join a union as a condition of employment. (“Yellow dog” contracts were made illegal in the 1932 Norris LaGuardia Act.)

Justice Stephen Breyer put an even finer point on the matter when he expressed his concern that the employers’ position “is overturning labor law that goes back to, for [Franklin D. Roosevelt] at least, the entire heart of the New Deal.”

Nonetheless, the arguments of the management-side attorneys appeared to gain traction with conservative Justices. This iss despite the fact that the employers’ side consistently failed to address a key problem: the rules of the forum that they said everyone has to follow are not made by some neutral third party. They are written by the employer, who then makes participation in the forum a condition of employment for the employee to sign the agreement. Research shows that almost 25 million non-union workers have been forced to sign such arbitration agreements.

Yet, some Justices bought the management-side argument. At one point, Justice Anthony Kennedy, who seemed to be the swing vote in this case, insisted that workers can still engage in collective action because they can simply go to the same attorney and ask her to represent them each individually.

Presumably, Justice Kennedy did not intend to imply that the attorney could share the details of each of the cases with each worker, because that would violate the confidentiality clause in many of these agreements. And presumably, he did not mean that the attorney could share confidential information, because then there would be no attorney-client privilege protection.

The employers’ counsel agreed with Justice Kennedy, and said that even though the confidentiality clause would prohibit the attorney from sharing information among the workers, it couldn’t “stop the same lawyer from thinking about the three cases in conjunction.” In Justice Kennedy’s words, “that is collective action.”

In reality, forced arbitration agreements that prohibit class or collective action have grown exponentially in recent years through a tactical decision by corporations to strip Americans of their rights to litigate their claims together. The NLRB responded in 2012 to the growing use of these forced arbitration agreements by finding that these agreements violate federal labor law.

The liberal Justices repeatedly demonstrated that this case is not about neutral rules of a forum, or technical issues of civil procedure, but about basic concepts of power.

Justice Ginsburg asked the Solicitor, “What about the reality? I think we have in one of these cases, in Ernst & Young, the individual claim is $1,800. To proceed alone in the arbitral forum will cost much more than any potential recovery for one. That’s why this is truly a situation where there is strength in numbers, and that was the core idea of the NLRA. There is strength in numbers. We have to protect the individual worker from being in a situation where he can’t protect his rights.”

Justice Ginsburg was making the point that if workers cannot bring class or collective actions, many who have low-dollar claims will be denied justice because it would be more expensive to bring their cases than they could possibly win.

The Solicitor’s response was telling. He claimed that the different arbitration agreements have different clauses, which deal with issues of costs and fees. In essence, he insisted, the contract takes care of those concerns. And, in the final analysis, the employers’ attorney and Solicitor explained that the contract—even if it is a forced contract—should trump any possible rights workers may have to bring their actions collectively.

In a sense, this position answered Justice Breyer’s initial question: Yes, this case does bring us back to a pre-New Deal framework, and the employers and Trump administration are comfortable with that.

This case is poised to have a far-reaching impact. When the Supreme Court struck down a California law prohibiting consumer arbitration agreements that waive consumers’ rights to file a class action, such arbitration agreements ballooned. If the Court similarly holds that workers do not have a substantive right under the NLRA to vindicate their labor and employment rights collectively, then it is likely that soon almost every non-union worker will face even more limitations to real justice.

This blog was originally published at In These Times on October 4, 2017. Reprinted with permission. 

About the Author: Moshe Z. Marvit is an attorney and fellow with The Century Foundation and the co-author (with Richard Kahlenberg) of the book Why Labor Organizing Should be a Civil Right.


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The Trump Administration’s Backdoor Plan to Erode the Rights of Workers to Act Collectively

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On October 2, the U.S. Supreme Court will hear a case that implicates the very concept of collective action. NLRB v. Murphy Oil asks whether it is a violation of workers’ rights to force them to enter into arbitration agreements that prohibit collective or class litigation. Such agreements, often entered into as conditions of employment, require workers who want to sue their employers to do so individually in a private arbitration setting, rather than as a class of aggrieved workers who can pool their resources and knowledge. According to a recent study by the Economic Policy Institute, more than 60 million U.S. workers have now lost access to the courts because of such forced arbitration agreements.

Now, the Trump administration is entering the fray, submitting a brief to the Supreme Court in the Murphy Oil case aimed at advancing an anti-worker legal theory poised to erode protections for workers outside of the union context.

Such efforts could have far-reaching implications. In a 1997 paper for Arizona Law review, professor of law emeritus Jack Greenberg argued, “Civil rights and class actions have an historic partnership,” with class actions routinely used “to challenge discrimination in employment, education, the use of public facilities and housing, to assert prisoners’ rights, and to promote welfare reform, to name just a few areas that conventionally are put in the civil rights category.”

More recently, the NAACP went further, arguing in an amicus brief submitted in August 2016 to the Supreme Court that “American democracy depends upon our unwavering commitment to equal opportunity. Federal labor law honors that commitment by guaranteeing employees the right to challenge workplace discrimination through concerted activity, including picketing, striking and group adjudication of workplace rights.”

Yet, in recent years, the rights of most Americans to engage in concerted legal has greatly diminished. In a 2015 investigative series on this trend, The New York Times reported that, starting in 1999, a “Wall Street-led coalition of credit card companies and retailers”—with soon-to-be Chief Justice of the Supreme Court John Roberts Jr. involved—engineered a plan to get rid of class action lawsuits, because such lawsuits allow individuals to pool their power against companies.

Years later, in a pair of cases decided in 2011 and 2013, with John Roberts Jr. as Chief Justice, the Supreme Court narrowly held that companies could include contract provisions that require plaintiffs to go through arbitration instead of court, while waiving their rights to class actions.

A federal judge interviewed in 2015 by the Times explained that the result is that now, “business has a good chance of opting out of the legal system altogether and misbehaving without reproach.”

The Times study of thousands of arbitrations—most of which are not publicly available—found that more and more consumer and labor and employment cases are being funneled into arbitration. Between 2010 and 2014, there was a 215 percent rise in arbitrations in labor cases over the previous four years. This represents a privatization of the justice system.

Furthermore, in many instances, the funneling of cases to individual arbitrations rather than class actions pressures workers into foregoing the process altogether. Looking at 2010 to 2014, the Times found that Verizon and Time Warner Cable, which have 140 million subscribers combined, faced only 72 arbitrations. After all, who would go up against an outmatched opponent alone?

It is understandable that workers would bow out, given that such arbitration settings are favorable to the employer. Unlike judges who are assigned cases randomly, arbitrators are chosen by the parties, meaning they are chosen regularly to arbitrate before the same corporations. If arbitrators against the corporations too often, there is a strong likelihood that the arbitrators will not be chosen again and therefore lose business in the future. This creates a financial incentive for arbitrators to side with corporations. The Times series notes that dozens of arbitrators “described how they felt beholden to companies. Beneath every decision, the arbitrators said, was the threat of losing business.”

Various attempts have been made to protect individuals from these arbitration provisions, including state laws holding these provisions to be unconscionable, as well as legal arguments claiming that such provisions violate federal anti-trust rules. But these arguments have failed at the Supreme Court. What has remained is the National Labor Relation Board’s (NLRB) position that Section 7 of the National Labor Relations Act (NLRA) protects workers’ substantive rights to join together in class actions. Section 7 provides that workers have “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

The NLRB has taken the position that employment class actions constitute “other concerted activities,” which are protected under labor law. And workers cannot sign away these rights, in the same way that they cannot sign away the right to form or join a union. The Seventh and Ninth Circuit Courts of Appeals agreed with the Board that the employer violated workers’ rights by making them sign arbitration agreements with class action waivers, but the Fifth Circuit held otherwise.

This split in the circuits made the issue ripe for Supreme Court review, and the matter was indeed appealed to the Supreme Court in September 2016, and accepted for review by the Supreme Court in January 2017. At the time, President Obama’s Solicitor General filed a brief with the Supreme Court supporting the NLRB’s position. But Trump’s Solicitor General later changed this position in order to side with employers.

In this case, the Trump administration expresses a view of labor law in the Solicitor’s brief that completely reorients workers’ rights. The brief acknowledges that Section 7 of the NLRA contains what it terms “core” rights, which relate to unionizing and collective bargaining, but pushes aside all other concerted activities as only contained in “residual language” and therefore not deserving of the same level of protections. Such a reading of labor law effectively states that the law’s protections only apply to workers’ activities as they relate to unions.

However, the NLRB clearly states that “the law we enforce gives employees the right to act together to try to improve their pay and working conditions, with or without a union. If employees are fired, suspended or otherwise penalized for taking part in protected group activity, the [NLRB] will fight to restore what was unlawfully taken away.” These rights are far broader than the Trump administration acknowledges in its brief before the Supreme Court, and any limitation of them would greatly diminish the few rights workers have in the workplace.

This week, management-side Republicans gained a majority on the NLRB, and soon a management-side Republican will become the agency’s General Counsel. This new conservative Board is likely to shift labor law away from worker protections, as was the case during the George W. Bush years. However, Trump’s Solicitor’s argument goes much further. It invites the Supreme Court to formally bifurcate and limit workers’ rights to act collectively.

This piece was originally published at In These Times on September 28, 2017. Reprinted with permission. 

 About the Author: Moshe Z. Marvit is an attorney and fellow with The Century Foundation and the co-author (with Richard Kahlenberg) of the book Why Labor Organizing Should be a Civil Right.

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Divide and Conquer: Employers’ Attempts to Prohibit Joint Legal Action Will be Tested in Court

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On Monday, October 2, the U.S. Supreme Court will hear arguments in the most consequential labor law cases to come to the Court in a generation, which could fundamentally alter the balance of power between millions of American workers and the people who employ them.

So why are so few people paying attention?

At first glance, the cases may seem dry and complex, as they involve 80-year-old laws that most people have never heard of. But the issue at stake is actually quite simple: should your employer be able to force you to give up your right to join your coworkers in a lawsuit challenging working conditions as a condition of getting or keeping a job?

The federal courts of appeals for the Seventh and Ninth Circuits say the answer should be no. They point to the National Labor Relations Act (NLRA), a law passed by Congress in 1935 to end “industrial strife and unrest” and restore “equality of bargaining power between employers and employees.” The NLRA gives workers the right to join unions and to “engage in other concerted activities” for “mutual aid or protection,” and it makes it illegal for employers to “interfere with, restrain or coerce employees in the exercise” of those rights.

But in recent years, more and more employers are requiring their employees to agree, as a condition of working for that employer, that they must resolve any disputes that might come up in the future in a private arbitration proceeding, and not in court. Many of these so-called arbitration agreements also prohibit the arbitrator from hearing more than one employee’s claim at a time—in other words, they ban employees from taking legal action together, either in court or in arbitration. A recent study from the Economic Policy Institute found that 23.1% of private sector, non-union workers, or 24.7 million Americans, work for employers that impose such a concerted legal action ban.

Sheila Hobson was one such employee. She worked at a gas station in Calera, Alabama that was run by Murphy Oil. When she applied to work there, she had to sign an agreement stating that she would not participate in a class or collective action in court, “in arbitration or in any other forum” and that her claim could not be combined “with any other person or entity’s claim.” Two years later, she joined with three coworkers to file a lawsuit under the Fair Labor Standards Act. She and her coworkers claimed that they were routinely asked to clean the station, stock shelves, check prices at competitors’ stations and perform other tasks while “off the clock” and without pay. Murphy Oil moved to dismiss the lawsuit, pointing to their arbitration agreement and arguing that each employee had to pursue their claims individually.

The National Labor Relations Board, a federal agency created by Congress to enforce the NLRA, stepped in to defend Ms. Hobson and her coworkers. The NLRB ruled that Murphy Oil’s arbitration agreement interfered with its employees’ right to engage in concerted activity for their mutual aid or protection in violation of the NLRA. But the Court of Appeals for the Fifth Circuit agreed with Murphy Oil, leading to this showdown before the Supreme Court.

The crux of Murphy Oil’s position, which is shared by the employers in the cases out of the Seventh and Ninth Circuits that are also being argued on Monday, is that the employers’ bans have to be enforced because of the Federal Arbitration Act. This law, passed back in 1925 at the request of businesses who wanted to be able to resolve commercial disputes privately under specialized rules, says that agreements to arbitrate should be treated the same as any other contracts. And because their concerted action bans are found in arbitration agreements, the employers argue, the FAA requires their enforcement.

But the FAA includes a “saving clause” that allows arbitration agreements to be invalidated on any “grounds as exist at law or in equity for the revocation of any contract.” One such ground for revoking a contract is that it is illegal, and the Seventh and Ninth Circuit opinions pointed out that a contract that interferes with employees’ rights under the NLRA is illegal and thus unenforceable under the FAA’s saving clause. Moreover, as the NLRB explained, the Supreme Court has repeatedly held that the FAA cannot take away anyone’s substantive rights; it merely allows those rights to be pursued in arbitration rather than in court. But the concerted action bans in these cases, and those like them that other employers force employees to sign, do take away the very substantive right to join with coworkers that the NLRA guarantees. By preventing workers from banding together in court or in arbitration, these agreements deprive employees of the ability to pursue their concerted action rights in any forum whatsoever.

Given the high stakes these cases present, both employer and employee positions have garnered a large number of friend-of-the-court briefs before the Supreme Court. The Chamber of Commerce has weighed in on the employers’ side, as have other groups representing industry and the defense bar. The Justice Department, which had originally represented the NLRB, switched sides with the change in presidential administration and is also supporting the employers.

Meanwhile a group of ten labor unions pointed out that given the economic power employers wield over employees who need jobs to support their families, “few workers are willing to put a target on their back by bringing legal claims against their employer on an individual basis.” The NAACP Legal Defense Fund and more than 30 other civil rights groups, including Public Justice, explained how joint legal action has unearthed patterns of discrimination and brought about systemic changes in workplace policies that individual cases could never have achieved, listing 118 concerted legal actions challenging discrimination based on race, gender, age, disability and sexual orientation that would not have been possible under concerted action bans like Murphy Oil’s. The National Academy of Arbitrators disputed the employers’ premise that joint or collective claims can’t proceed in the more streamlined forum of arbitration, noting that labor arbitrators have been resolving group claims in unionized workplaces for decades and that requiring each case against the same employer – with the same evidence – to proceed separately would actually be far less efficient and more costly. Finally, the Main Street Alliance argued that concerted action bans reduce enforcement of minimum wage and employment discrimination laws, which disadvantages responsible businesses relative to corporations that mistreat employees and break the law.

With nearly a quarter of U.S. non-union employees already subject to concerted action bans, a green light from the Supreme Court telling employers to continue this practice will no doubt cause that figure to soar. But Public Justice is hopeful that the Court will follow the plain meaning of the NLRA and find these bans to be the illegal acts that they are—attempts to coerce employees into giving up their right to join forces to increase their bargaining power. That right applies equally whether employees want to join a union, join a lawsuit or join a boycott or picket line. The Supreme Court should stop this employer power grab and reaffirm the right to concerted activity, which is just as important for workers now as it was when Congress established it over 80 years ago.

This article was originally published at Public Justice on September 28, 2017. Reprinted with permission.

About the Author: Karla Gilbride joined Public Justice in October 2014 as a Cartwright-Baron staff attorney. Her work focuses on fighting mandatory arbitration provisions imposed on consumers and workers to prevent them from holding corporations accountable for their wrongdoing in court.


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Supreme Court opens its new term with a direct attack on workers’ rights

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The Supreme Court returns next Monday from its summer vacation for the first full term where Neil Gorsuch will occupy a seat at the far end of the Court’s bench. And the Court will open this term with a trio of cases that are very likely to immunize many employers from consequences for their illegal actions.

The three cases — National Labor Relations Board v. Murphy Oil USA, Ernst & Young LLP v. Morris, and Epic Systems v. Lewis — all involve employment contracts cutting off employee’s rights to sue their employer for legal violations.

In at least one case, employees were required to sign the contract as a condition of beginning work. In another, employees were forced to give up their rights as a condition of keeping their job. These contracts contained two restrictions on the employees: 1) a “forced arbitration” provision, which requires any legal disputes between the employer and the employee to be resolved in a privatized arbitration system; and 2) a provision prohibiting employees from bringing class actions or other collective suits against their employers.

Requiring private arbitration favors employers over employees. As an Economic Policy Institute study determined, employees are less likely to prevail before an arbitrator than before a court, and they typically receive less money from an arbitrator when they do prevail.

Banning class action suits, meanwhile, effectively permits employers to violate the law with impunity, so long as they do not do too much harm to any individual employee.

If an employer cheats one employee out of $300,000 worth of wages, for example, that employee is likely to be able to find a lawyer who will take his case on a contingency basis — meaning that the lawyer gets a percentage of what the employee collects from the employer if they win. If the same employer cheats 10,000 employees out of $30 each, however, no lawyer is going to represent any one of these workers on a contingency basis. Plus, few employees are likely to bother with a $30 suit. It’s too much hassle, and too expensive to hire a lawyer who won’t work on contingency. The solution to this problem is a class action suit, which allows the 10,000 employees to join together in a single case litigated by a single legal team.

Banning such class actions effectively leaves these employees without remedy. As one federal judge explained, “the realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”

The employer’s claim that they can combine a forced arbitration clause with a class action ban arises out of two previous Supreme Court cases that took an extraordinarily creative view of a nearly 100-year-old law.

In 1925, Congress enacted the Federal Arbitration Act to allow, as Justice Ruth Bader Ginsburg once explained, “merchants with relatively equal bargaining power” to agree to resolve their disputes through arbitration. Beginning in the 1980s, however, the Court started to read this law expansively to permit forced arbitration between businesses and relatively powerless consumers and employees.

Then, the Court got even more aggressive. By its own terms, the Federal Arbitration Act exempts “workers engaged in foreign or interstate commerce.” Nevertheless, in its 5-4 decision in Circuit City v. Adams, the Supreme Court held that the Act applies to most workers engaged in foreign or interstate commerce. Thus, forced arbitration clauses in employment contracts were given special protected status, even though the federal law governing these clauses says otherwise.

Similarly, Justice Antonin Scalia wrote for a 5-4 Court in AT&T Mobility v. Concepcion that the Federal Arbitration Act has penumbras, formed by emanations from its guarantees that give it life and substance. The right of businesses to insert class action bans, Scalia claimed, is one of these penumbras contained in the 1925 law. And so businesses gained the power to add no class action clauses to their forced arbitration agreements, even if a ban on class actions violates state law — and despite the fact that the Federal Arbitration Act says nothing about class actions.

Nevertheless, the employees in Murphy Oil and its companion cases hope that another provision of law will protect them from signing away their right to join a class action.

A provision of the National Labor Relations Act (NLRA) provides that “employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Several lower courts have held that an employee’s right to engage in “concerted activities” protects their right to join class actions, and they cite multiple previous Supreme Court decisions which lend credibility to this claim.

In a world governed by the text of the law, employees would have a strong case that they cannot be forced to give up their right to bring class action litigation. But we live in a world governed by Circuit City and Concepcion — both of which demonstrate the Supreme Court’s willingness to take liberties with the law in forced arbitration cases.

This article was originally published at ThinkProgress on September 25, 2017. Reprinted with permission.
About the Author: Ian Millhiser is the Justice Editor for ThinkProgress, and the author of Injustices: The Supreme Court’s History of Comforting the Comfortable and Afflicting the Afflicted.

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18 states are suing Betsy DeVos for putting for-profit college fraudsters over student borrowers

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Betsy DeVos is making it harder for students to get loan forgiveness after being cheated by for-profit colleges, but Democratic attorneys general across the country are challenging her in court. DeVos has had the Education Department put a hold on new rules that were supposed to take effect on July 1 protecting student borrowers—protecting student borrowers is definitely not what Betsy DeVos is about, let’s be clear on that—and 18 states are going to court to get the rules put back in place.

An existing federal law allows borrowers to apply for loan forgiveness if they attended a school that misled them or broke state consumer protection laws. Once rarely used, the system was overwhelmed by applicants after the wave of for-profit failures. Corinthian’s collapse alone led to more than 15,000 loan discharges, with a balance of $247 million.

Taxpayers get stuck with those losses. The rules that Ms. DeVos froze would have shifted some of that risk back to the industry by requiring schools at risk of closing to put up financial collateral. They would also ban mandatory arbitration agreements, which have prevented many aggrieved students from suing schools that they believe have defrauded them.

DeVos really is stepping in in favor of fraudulent schools over defrauded students—and taxpayers—in other words.

“Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” said Maura Healey, the Massachusetts attorney general, who led the multistate coalition. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law.”

Two students left with debts after their school lied to them about their job prospects are also suing the Education Department over the same issues.

This blog was published at DailyKos on July 6, 2017.  Reprinted with permission. 

About the Author: Laura Clawson is labor editor at DailyKos.


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