Know Your Rights: The Mythical Right To Your Day In Court
by Doug Bonney

In this segment, I specifically want to consider about the mythical right to your day in court.

Many people who call me with labor and employment problems say they want to take their employer or former employer to court. As I have discussed in previous Know Your Rights segments, these folks often erroneously believe the law provides for nonexistent rights like break times, a copy of your personnel file, and other things that the law doesn't guarantee to employees. But sometimes, even if these folks have a legal right to contest an employer's decision, they don't have a right to go to court. People often say "I have a right to my day in court." But they can be wrong.

Probably the most common kind of employment lawsuit involves discrimination based on race, sex, age, or some other protected characteristic. The civil rights laws that allow people to file these discrimination suits contain provisions allowing employees to file suit after going through an administrative investigation by the Equal Employment Opportunity Commission or some similar state or local agency. But the right to file suit in court is not absolute, and it has been eroded in the past twenty-five years or so by employers unilaterally requiring employees to arbitrate their employment disputes rather than litigating those disputes in federal or state courts.

Congress gave its blessing to the arbitration of discrimination cases in 1981 when it passed a law encouraging "the use of alternative means of dispute resolution" in civil rights cases. Although many employers have decided not to require their employees to arbitrate discrimination and other employment claims because they have found that arbitration can be more costly than going to court, some employers have embraced arbitration gleefully. For instance, Dillard's Department Stores has implemented a very aggressive arbitration policy that requires its employees to arbitrate any employment disputes that could be brought in a court of law. And Dillard's policy requires employees to arbitrate even if they refuse to sign a form acknowledging receipt of the arbitration policy. The Dillard's policy provides that by "accepting or continuing employment with Dillard's, you have agreed to accept the Program known as the Agreement to Arbitrate Certain Claims." In July 2006, the federal court of appeals in St. Louis upheld this policy.

Now, you may say "well, arbitration has been around a long time and is an accepted way of resolving disputes." And that is correct. But, historically, arbitration has been used to resolve commercial and labor disputes where the parties involved have roughly equal bargaining power and where the parties voluntarily agree to arbitrate their disputes. In the employment setting, nonunion employees have no bargaining power, and the unilateral imposition of policies requiring arbitration of discrimination claims and other employment disputes seems to amount to an adhesion contract, which is a contract offered on a "take it or leave it basis" and is usually disfavored in the law. But, in employment cases, Congress and the courts have swallowed such adhesion arbitration agreements hook, line, and sinker.

These arbitration agreements may interfere with the incredibly important public policy of prohibiting and remedying employment discrimination based on race, sex, age, disability, and religion. These are things that the court system should handle. These are not claims that are appropriate for neutral arbitrators, whose decisions are generally not subject to any appellate review. These arguments against employment arbitration have been made to Congress, but they have fallen on deaf ears. The employers who want arbitration have a lot of pull in Congress, and individual employees have little or no sway in Washington.

In another area of labor relations, Congress has provided an independent agency to resolve disputes involving important issues of public policy. Specifically, Congress has created the National Labor Relations Board to decide unfair labor practice cases and other issues under the National Labor Relations Act. In those cases, the NLRB decides whether to file a complaint on a charged unfair labor practice, and a neutral Administrative Law Judge decides the case after holding a public hearing. Then, ALJ's decision is subject to an appeal to the NLRB in Washington, D.C., and ultimately to a federal court of appeals. Although the NLRB has a policy of deferring to arbitration some cases involving important national labor relations policy questions, it only defers such cases where there is a collective bargaining agreement providing for arbitration. The NLRB does not require arbitration where the parties have not independently agreed to arbitrate their disputes or where the parties are not at least arguably equal in terms of bargaining power.

Employment discrimination claims are the only cases involving critical public policy issues that Congress has permitted and even encouraged to be heard and decided in private arbitrations between parties with grossly unequal bargaining power. Such discrimination arbitrations are still relatively new, but workers and others concerned with protecting civil rights in the United States should watch these cases closely. If arbitration fails to protect civil rights, we should demand a change in the law to put these cases back in open court where they are hashed out in the light of day rather than in some corporate lawyer's conference room.

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