U.S. states reconsider confidential deals in workplace harassment
nytimes.com
nytimes.com
https://www.theguardian.com/film/2018/aug/26/former-weinstei...
The clauses attached to the Weinstein agreement signed by Perkins offer an insight into how egregious some NDAs can be. She was prohibited from even obtaining a copy of the agreement – she could only look at it supervised at a law firm’s office, a clause that also prevented MPs from acquiring the document. Ultimately she obtained the agreement in June through a personal data request. Its contents confirmed that she was banned from talking to a doctor, therapist or psychoanalyst about Weinstein’s alleged harassment unless they also signed an NDA and that she should not speak about the payment even if HMRC questioned her about it.
“If a therapist, for instance, broke the agreement, I would be held responsible for their disclosure. There were guns pointed from every angle,” said Perkins, who has since managed to rebuild her career as a successful associate producer.
Still makes me think Weinstein deserves what has come to him.
There is actually a reason for a clause like that. There is doctor-patient confidentiality, but the patent is allowed to waive it, and has the incentive to do so if they didn't actually want to be bound by the NDA and can use that as an exception. Or if the doctor blabs in violation of doctor-patient confidentiality, the patient would have a claim against the doctor (but no incentive to pursue it) while the party the NDA is protecting wouldn't have a claim against the doctor or the patient. So the NDA has that clause to give them one.
There isn't really any way to know if they tell a doctor without an NDA and then the doctor never tells anyone else, but then nobody cares either. The only time it matters is if the doctor does tell other people, and then that's how they know.
Ethical-wise I can think of only a couple of acts (usually headline worthy) that look less ethical than that.
The solution to which is, of course, don't sign them.
The settlements are a compromise. The defendant would rather pay money than admit to wrongdoing and the plaintiff would rather be paid a lot of money than have to relive the incident in court, so they come to an agreement.
If you take that away, you're leaving the option that neither party preferred over what actually happened -- otherwise either of them could have chosen it to begin with.
If the victims don't like that trade off then they can stop agreeing to it. But if they continue to decide it's the right choice for them then who the heck are we to tell them they're wrong?
Ever since GDPR became a thing I started reading the Terms of Service of every major site I use.
Yesterday I found out my Starbucks account has a forced arbitration clause which you can only opt out of by sending a physical letter to their headquarters, and only if you do so within 30 days of having signed up. This is customer abuse at its finest, and should definitely not be legal. If I can sign up online I should be able to opt-out online, at least.
Even worse is their linking policy, which I cannot imagine is actually legally enforceable. How can linking to a publicly accessible page have terms associated with it? And the terms are incredibly user-hostile, since it basically says you can't link to them if you're saying anything bad or negative about the company.
I'd normally include a link, but I guess you'll have to search for it yourself if you want to confirm what I'm saying. Just look up "Starbucks Terms of Service", it'll be the first result ;).
An overeager ToS is a good way to scare people who are unwilling to risk a legal dispute. In practice a lot of the more preposterous clauses are nonsense.
In the US, courts enabling wealthy corporations to smash individual citizens into meat paste are working as intended. It is "justice for sale", albeit indirectly -- you don't pay the judge, you pay for enough lawyering to destroy the opponent, win or lose.
Also, consider that you and I are free to agree to anything we want, enforceable or not. All that enforceability tells you is whether a court will be willing to intervene. For example, we can agree that you will donate a million dollars to my foundation, but a court will likely not enforce that because I didn't give you anything in exchange (the doctrine of consideration).
Since my country is in the EU it pretty much means that in my country law agrees with practice of ignoring all ToS by deefault.
That said, under German consumer protection laws a ToS may also not contain anything that could be considered "surprising" (which is generally interpreted in favor of consumers) so most ToSes are fairly pointless as soon as they go beyond the basics.
What bothers me most is the price David has to pay to slay the ToS of the Goliath. It is prohibitive, to say the least. Thus, there is nothing to stop this trend of ridiculous ToSs.
Such violation of human rights should attract swift and exemplary punishment. Also, the small guy should not pay for this community service he is performing.
That's easy right here. Let's just tax corporations 1¢ per user per word in their ToS.
So "click a button here to consent, send a written letter here to withdraw" means you don't have consent in the first place.
And if your job is to make other people's lives harder for no good reason other than to abuse them then yeah, maybe you should be legally obliged to fix that crap for free.
However, to get this started, perhaps an organization like EFF or Mozilla can pay for the first 10-100 most popular websites?
Otherwise ask yourself this: how much are you willing to pay Amazon to not list your address and a list of possible items at that address for the whole internet to see?
You can use it to search for companies with forced arbitration agreements.
Also, this: https://blog.levelplayingfield.io/aaa-arbitration-waiver-dat...
https://www.shrm.org/resourcesandtools/legal-and-compliance/...
The interesting provision of the FAA is this one: " but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."
Edit: I had some commentary about the case here, but upon a closer read of the majority and dissenting opinions, it's really not as clear cut as I thought. There's plenty of good reasons to agree or disagree with what the Court did in Circuit City.
Of course, we might see Californian companies simply give up the practice. Your post did conjure in my mind the delightful image of an angry out-of-state contractor shouting into the phone, "Why do I have so many rights?! Why aren't I railroaded by arbitration? Why can't I be locked into a one-sided non-disparage agreement because some executive slid his hand into my pants? I'm furious at all my options here! While I'm at it, I demand you enforce a no-compete clause."
Not a lawyer, but doesn't a FB engineer writing FB App code from CA affect foreign and intrastate commerce?
You're a lawyer and you know all this, but for the rest of the HN crowd: an extremely broad definition of "interstate commerce" has applied since the New Deal era when the Supreme Court folded to immense pressure from the FDR administration and stopped striking down his New Deal programs. This generally favors the left, by allowing more regulation by the federal government. But it can work the other way; like here, for example, by allowing the Federal Arbitration Act to apply very broadly.
[1] https://www.wnycstudios.org/story/one-nation-under-money
[Edit] Also, the news articles referenced in a comment below make no mention of non-disparagement clauses, only forced arbitration.
> (b) This section applies to contracts for employment entered into, modified, or extended on or after January 1, 2019.
> [...]
> (f) This section applies to contracts for employment entered into, modified, or extended on or after January 1, 2019.
So, note that arbitration could still be mandated for violations of your employment contract, but not for litigation concerning employer violations of the California Fair Housing and Employment Act. If your employment contract has a defined end date, then renewal of that contract after 2019 will be under the provisions of this new law. For ones that don't have a defined end date, I'm not clear on whether they could be considered continually extended, or if it would just be a grandfathered-in contract.
For example, a state could raise its corporate income tax rates, but as a separately severable provision, give a tax credit reversing X% of the tax hike if X% of their employees have no restrictions on their ability to publicly litigate and disclose harassment and discrimination claims. (Many variations on the specifics are possible.)
If companies drop these restrictions, it's no extra tax for them and just a few extra lines to complete on a tax form.
Alternatively, if companies keep these restrictions, there's no conflict with the FAA, just a financial penalty.
And if they get the tax credit provision struck down somehow, they keep the tax hike regardless of their employment legalese, so they may not want to fight that battle.
What major flaw am I missing? Just the optics/PR around this politically speaking, or something worse?
Consider somone charging 10,000$ per month rent, but giving white people a 9,000$ discount would clearly be illegal.
Aka, Charging X more is equivalent to giving everyone !X a discount while excluding X from the standard discount.
And again, discrimination is not the point, the point was discounts is not a way to get around charging X more. If a state can’t charge a fine for doing X the also can’t give a discount for not doing X.
The Supreme Court has construed this preemption pretty broadly, but always in the context of contract enforcement or validity.
I can indeed imagine that the Supreme Court would write disapprovingly about the tactic of using a financial incentive to discourage forced arbitration clauses, but that's very different from whether they'd go beyond that to actually strike down the tax credit, since the arbitration clauses would remain fully valid and enforceable either way.
As a matter of realpolitik, it matters that the tax hike in my idea is explicitly severable from the offsetting tax cut: most of the judges and ideologically related advocates who like forced arbitration also dislike higher corporate taxes. The only thing they could credibly do against this law would result in higher corporate taxes. A separately severable tax hike conducted in accordance with state law is clearly constitutional.
For example, a lot of states now force mediation in family law cases. They would (and should) force arbitration if they could.
(The vast majority of these cases are people failing to act like reasonable adults, not serious legal issues)
It depends a lot on the situation.
See https://www.jamsadr.com/rules-comprehensive-arbitration/
Rule 15.
(This is true even when, as in most cases, the company pays for arbitration)
That’s why we built https://levelplayingfield.io
As in: "I'll give the first person who responds to this comment $20", but only per my chosen interpreter. (And I choose /dev/null)
As for why not change the law to let parties choose at the time of the dispute, what you prefer ex ante and ex post is rather different. Ahead of time, you don't know who will be the one claiming wrongdoing of the other, so you'll be willing to agree to binding arbitration. After all, most people go into a deal intending to abide by it, and everyone goes into a deal at least trying to convince the other side of that. But after the fact, the party likely in the wrong would prefer to impose the high cost of litigation on the one likely not in the wrong. It can then unfairly capture a portion of this potential cost by proposing a settlement.
An example with made-up numbers: say you owe me $20,000 and refuse to pay and that it would cost me $5,000 in court and attorney's fees to sue you in court for it. You could offer me a settlement of $16,000 and it would be irrational for me to decline it, as it would leave me better off than winning the lawsuit (and I might not win). Now you have unfairly but legally taken $4,000 from me. If there was an arbitration option at the time of dispute, providing for a process that would only cost me $1,000, you would never accept it. Why would you?
It has to be binding and agreed to before the dispute arises for it to work.
The main problem, as I focused on, is malinterpretation.
My example had to be very unsubtle to be understood, which is the norm in software land. But yes my contrived example would not pass the smell test in legal land and would thus be easily contested. So now we get to argue about the epsilon. Directly from the article you linked:
> Crucially, these grounds do not include substantive review of the award for "mere" errors of law or fact. As a result, "judicial review of arbitration decisions is among the narrowest known to the law."
It seems like one would likely have to show an overt conspiracy with the arbitrator or other gross arbitrary behavior to contest a decision. Given how much corruption is based on cooperative wink-wink, and that the contract drafter/arbitrator purchaser is likely to be the repeat customer, it's a bad setup.
Also directly from that article:
> Before the enactment of the Federal Arbitration Act (FAA) and its Florida counterpart, the Florida Arbitration Code (FAC), courts were generally hostile to arbitration, viewing it as "an attempt to oust courts of [their] lawful jurisdiction."
So yes, it seems that the courts even agree with me. Then the arbitration industry got the ear of lawmakers, who proceeded to undermine the courts.
Don't get me wrong - philosophically I would very much like to reduce court costs and lawyer overhead. Stripping away the right to sue through contracts of adhesion is not the way to go about that though.
1. Prohibiting employers to punish employees for exercising their free speech outside of the work (right of free speech).
2. Prohibiting employers to punish employees for alleged wrongdoings outside of the work (right of due process).
State laws are not supposed to conflict with federal law.
In a case like that, they are sort of hoping it goes to the Supreme Court and the court finds in their favor.
One of the issues marijuana growers and sellers are having is that they have trouble establishing bank accounts because banks don't want to be in violation of federal regulation.
The people passing pro mj laws and starting legitimate mj businesses could be viewed as a quiet, non violent civil rights movement. Everyone doing stuff in that space is sticking their neck out.
I'm allergic to mj, so I'm not willing to stick my neck out, but I am for the legalization of mj. I have done some research on the topic and I have tremendous respect for the people quietly working to make this legal in the US.
It was never clear what would happen if I didn't. I'm not certain you can force someone to sign a contract as a condition of employment.
My buddy came up with an ingenious solution-- we signed each other's documents in our own handwriting, so if we ever had to we could say, "That's not my handwriting."
Also, not yet law; the status on the bill is enrolled, which means it has past both houses of the legislature but not been signed by the governor. Presumably, Brown will sign and not veto this, but that's just a reasonable assumption about the future, not the state of the law.
Doesn't that in itself reduce the credibility of all laws? Maybe the real problem is that the justice system is not doing its job properly.
This is a fundamental distinction that is missed entirely in way too many online conversations.