Seven of Jamie Leigh Jones’s male co-workers welcomed her to her new job in Iraq by drugging and gang-raping her, according to the federal Equal Employment Opportunity Commission. She says that the rapists were so violent that afterwards she had to undergo reconstructive surgery on her breasts.
Ms. Jones sought her day in court, but her employer, Halliburton, tried to bar the courthouse doors. When she took the job Halliburton made her sign an arbitration agreement which forces employees to give up their rights to take employment-related disputes to a jury. Instead, they pledge to resolve disputes through secret, binding arbitration.
On Wednesday the Supreme Court issued an opinion in another forced arbitration case, AT&T vs. Concepcion, which involved cell phone users whose service contract required them to take disputes to arbitration and not to court. It also prohibited them from bringing a class action in arbitration, leaving them no way to bring a class action at all. The Supreme Court announced that that is just fine. It is legal for a company to unilaterally ban customers from court and eliminate the possibility of a class action.
Many employers force similar arbitration provisions on their employees. In fact, there is a decent chance that you gave away your right to a jury without realizing it when you accepted your current job. Like mobile phone and credit card companies, employers hide this tidbit in jargon and small print. If you want the job, you trade your right to a jury, and in its place you get private, paid arbitrators whose decisions are essentially unappealable and who don’t have to follow the law. They don’t even have to explain the reasoning behind their decisions.
Not every employer pulls this trick, but many of the big ones do, including Anheuser-Busch, Cisco Systems, Dillard’s Department Stores, Halliburton, Hooter’s, and most major employers in the financial services industry. Approximately 48 million American workers may be bound by arbitration agreements, according to the National Employment Lawyers Association.
Employers favor arbitration because it can be faster and cheaper than court. But time-consuming judicial procedures are meant to make the process fair to both parties. Their absence from arbitration weights the balance in favor of employers: for instance, in court, employers have to turn over damaging documents and produce supervisors and co-workers for depositions; in arbitration, employers can usually keep all that information to themselves. Employers also like that arbitrators have a financial incentive to favor them: employers hire the same private arbitration companies over and over, whereas each employee tends to be a one-time player.