I was so excited about the Ledbetter Fair Pay Act being signed into law that I almost forgot... corporations can still completely screw you over with discriminatory employment practices and get away with it by avoiding lawsuits altogether. In fact, they can even make YOU pay for complaining.
At that sobering thought I wrote a peice providing more detail about this common yet under-discussed problem. The piece got published online in The Nation, which is pretty exciting in and of itself. But that's not the end of it...
Now people are really starting to speak up about how their employers have been cheating them once through illegal behavior, then cheating them twice by forcing them to take their dispute to a private company court that almost always rules against the little guy. More below the fold...
Here's an excerpt from the Nation piece:
Despite the new Ledbetter Fair Pay Act, corporations can still get away with employment discrimination and other harmful action through binding mandatory arbitration agreements in which Americans sign away their right to resolve disputes in a court of law. Nestling arbitration clauses in the fine print of credit card agreements, patient consent forms and employment contracts is a deceitful tactic used against an estimated 30 million Americans nationwide. It sends disputes between a person and a corporation to a closed-door, unregulated resolution process hidden from outside view.
Congress and President Obama should provide a much stronger check against corporate power. They can do that by passing The Arbitration Fairness Act (AFA), first introduced in 2007 by Senator Russ Feingold (D-WI) and Representative Hank Johnson (D-GA).
I go on to detail how exactly pre-dispute binding mandatory arbitration clauses hurt people--consumers, employees, patients, etc. I think these details are important and encourage folks to read the article and read more about pre-dispute binding mandatory arbitration on tortdeform.com.
But what I really wanted to highlight in this diary was this, quite possibly the most powerfully written personal testimonial about the horrors this contract loophole (and weak corporate accountability in general) can inflict on regular people (my emphasis added):
In 2007, I was subject to a binding arbitration fiasco of my own. I sued my former employer for breach of contract and fraud. I had a mountain of evidence on my side, but somehow the JAMS arbitrator conveniently overlooked all of that and the fact that my opponent was perjuring himself all throughout the deposition and proceeding, and decided against me. He ruled that I should pay my former employer's legal fees in addition to my own--even though my employer was insured. The total sum was right around a million dollars. Suddenly, instead of being entitled to back wages and damages, I was a debtor with no hope of appeal. I'm now in the process of declaring bankruptcy--a fate I never dreamed could ever happen to a guy like me.
I agreed to the arbitration clause in my contract because I had no idea of the pitfalls of the process. And because of the inherent secrecy of arbitrations, I also had no idea that there were a string of former employees who had found themselves in the exact same predicament I was getting myself into with the same employer. My ex-boss knows how to play the arbitration system like Billy Joel on a grand piano--and there are countless others like him. This is a perversion that was never intended when the Federal Arbitration Act was originally passed by Congress in 1925. It was designed, of course, to be a process whereby only like-sized businesses could settle claims out of the congested court system; however, over the years it has become a hammer for big business to slam on the head of ordinary consumers.
Only when people get angry about the usurping of their civil rights with this fascist tool will there be change. Everyone needs to write or call their Senators and Congressmen and demand that something be done about this Grand Canyon-sized loophole in our government. If you or someone you love hasn't been manhandled by the arbitration system yet, rest assured its only a matter of time.
Ehren Bragg
www.arbitrationhorrorstories.com Los Angeles, CA
Contract law isn't a topic that is just for lawyers, wonks, and nerds (although I self-identify as a nerdy lawyer who one day hopes to fully harness that into true wonkiness). Everyday people better get on the boat too and start engaging in these issues, because believe me, they're personally relevant to each of us.
So all that to say, I'm glad Ledbetter got passed. So glad! And I've written about the importance of this law extensively. BUT, the only sensible next step is for Congress to pass and President Obama to sign into law the Arbitration Fairness Act, which will keep employers from using sneaky language as an end run around discrimination law.