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The Problem With the Arbitration Fairness Act

During this year’s National Employment Lawyer’s Association (NELA) lobby day on Thursday, April 23rd, we found the most important law NELA is currently advocating to be a particularly tricky one to sell.  We spent the day meeting legislative aids on Capital Hill and learned that the Arbitration Fairness Act is a little difficult to explain because nobody—not NELA, not plaintiff side employment lawyers, and not clients—is against arbitration, mediation or any form of alternative dispute resolution per se. The problem is something else entirely.

The problem is that employers are forcing the employee to choose the forum of any kind of dispute resolution as a condition of being hired from day one.  The employers can use this action to limit the statute of limitations which may otherwise apply to certain kinds of cases. Of course, the employers are also using this technique to leverage the type of forum an employee could use to sue.

When an employee has a right to a Jury trial, that right serves as a check on any type of arbitration the employee may feel they should choose as a way to handle their case in agreement with the employer. With the Jury trial right there would be pressure on an arbitrator to follow the law and pressure on the defendant to agree to terms of an arbitration that do not necessarily keep results secret or change the rules.  However, when the arbitration is forced on an employee from the first day of employment, and sometimes the NELA people tell me it is done so as a condition of interviewing for a job, then the forum starts to creep towards the benefit of the employer.  After all the employer will be back to the arbitrator and the employer is forcing arbitration all the time.

This is not (strictly speaking) an issue for False Claims Act lawyers. However, we should keep our eyes on any attempt to take away the rights of the employee to a jury trial, to keep disputes secret and the continued attempts to limit the rights of employees to speak. These kinds of limitations on employees will invariably have a chilling affect on whistleblowers as well.  It is a slippery slope to say to an employee you have no right to a Jury Trial for any employment related dispute, so going to court is not an option for you, to the next step of limiting whistleblower rights to report fraud. As forced arbitration gains acceptance in the courts, so will conditions on employment that limit whistleblowing.

Arbitration, mediation, and most other alternatives to dispute resolution are premised on the idea that both sides have an equal bargaining position and are willing to enter into an alternative method because it will save time and money for both sides. When one side can impose these alternatives on the other and thereby simply take away the right to a Jury Trial, it is blatantly an unfair process.  So, NELA is fighting this issue and has been fighting this issue for quite a while.

Getting results from going to Congress and lobbying takes time to say the least.  Nobody on the Hill is saying anything about anything happening soon. Still, it takes effort and persistence to get important work done. Here’s hoping NELA has success in rolling back the efforts to take away employee’s rights.  There simply is no way in today’s job market for an employee to refuse any condition of employment.  If the law does not protect a job seeker at that particularly vulnerable point, who will?