If the clause was "In the case of a dispute, we win.", it'd be deemed invalid by the courts. But since it's "In the case of a dispute, we have an overwhelming advantage in a private court.", that makes it valid?
Wasn't there an article recently about some predatory lending practice where the lender made you sign a clause essentially letting them win in any dispute? And it got enforced a bunch?
In theory, arbitration firms are supposed to be independent and unbiased. I'd love to see some statistics backing that up. If there were a case for arbitration firms heavily backing companies over individuals, then that'd be a much stronger case.
I'm curious why I haven't seen any signs of people going after the arbitration firms and their impartiality, rather than going after the companies using those firms.
(I'd also be interested in knowing why the comparison was with "federal court" and not "any court".)
I think the reasoning people have is the alignement of incentives is messed up:
Big companies will use arbitration if it provides them a cheaper alternative than going to actual courts.
The arbitration firm that is more employer friendly will save more money to a company than a firm that is less employer friendly, therefore the company is more likely to hire the first one. And arbitration firms are more likely to be employer friendly since their financial success is impacted.
Ending arbitration isn't necessarily the right solution, since courts could be too crowded, but maybe authorizing it, only if the case is handle in a timely fashion, and the employee has a right to "appeal" to a regular court , could make it more fair and more economical to both sides?
I posted some studies from SSRN, etc in my other comment here, but: Most studies that try to objectively evaluate the data (and there are plenty that don't on both sides!) don't come up with obvious "the arbitrators are unfair" or "court is right more of the time" answers. This is why you see the policy folks go after the win rates.
It is definitely true that large scale studies agree that the win rate is less in arbitration (There are some smaller scale studies cherry picking data that find otherwise).
The large scale studies though don't have enough data to say whether that win rate makes sense or not.
I posted the most recent one (not yet published) which tries to understand the variables affecting win rate.
Trying to objectively take 1000 cases in court/arbitration and say "what should have happened" has not occurred. Without something like that, it is hard for folks to make a meaningful case that there is a real problem.
Despite what the prevailing viewpoint here seems to be, the truth is if someone did that study, in as unbiased a way as possible, it would likely be significantly more convincing to the judiciary than what they see now (trying to convince the populace/politicians is much harder :P)
For example, right now if you ask federal judges (no matter what their politics) whether they think all the winning employment legal cases before them deserve to be winning, their answer is a resounding no.
If it was a resounding yes, or the data showed the opposite effect in arbitration (IE people were losing cases they shouldn't), you'd have an easier time getting courts to buy that arbitration was actually harming people.
But we can't seem to get past the policy positions and "people should always be in court" mentality.
It's really quite sad.
2. It makes the weird underlying assumption that the people in court should be winning as much as they do. The fact that a difference in numbers exists is interesting but doesn't tell you whether it is fair or not.
So i guess i would ask. Imagine someone does a completely objective analysis of the gap and determines federal courts are in fact, the problem, and people are winning meritless lawsuits in court but not arbitration.
Would you be supportive of doing something about that?
3. Here is a more academic paper for you:
https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?a...
This is in fact, the original source for the 21.4% number EPI quotes.
EPI conveniently (in their own policy paper) leaves out the paragraph starting with :
"This employee win rate is substantially lower than that found in previous employment arbitration studies, which tended to use selective samples. It is also lower than employee win rates in litigation. However, it should be noted that we may be comparing apples and oranges here in that the characteristics of cases in arbitration may differ systematically from those in litigation.
....
The task for future research is then to analyze what factors may explain this gap and whether or not it is problematic from a public policy perspective "
EPI does not do that.
Here's a more recent analysis: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3238460
An interesting note: "In fact, in a variety of settings, no variable affects win rates as dramatically as whether a plaintiff hires attorneys with arbitration experience."
It is entirely possible the difference in win rates is due to the fact that in court employees are using experienced employment lawyers and in arbitration they are not using lawyers experienced in arbitration (meanwhile, the corporations do because they are sued so often).
Or because more of the claims are meritless in federal court or a ton of completely fine things.
Even if you believe that arbitrators attempt to be fair and correctly apply the law, there are numerous public policy issues with them, for some examples:
- The well known principle that it's not enough for the system to seem fair, it must appear to be fair.
- The lack of an appeals system. Real courts screw up all the time and there is 0 evidence to believe that arbitrators are better.
- The lack of case law developed, leading to re litigating issues and no clarity for future controversies.
- The lack of checks and balances, regardless of how fair arbitrators are today there is no way to stop them from becoming corrupt in the future.
The problem is the balance of power is overwhelmingly with employers, so if you don't agree, you don't get a job... anywhere.
Aribtration seems fine if it's business-to-business, and both sides have full-time counsel on staff, a contracts department in accounting, etc. etc.
This makes it a first amendment issue, but it’s more than that. We as a society lose out when cases are settled behind closed doors with no public record. We cannot make informed decisions about employment if we don’t know who the bad actors are.
People respond to incentives and there are lawyers specialized in trying to grab huge payoffs from companies. They are not allowed in arbitration.
This is a sensitive issue and the last time I posted, some innocent bystander got banned.
You can review my post history, which is serious. Yes, people respond to incentives, and yes, massive payoffs by companies when a seedy lawyer is one of these incetives is one of these. Why people here don't understand this is beyond me. People understand that giving equity in a company produces great labor from early employees. It should be equally obvious that allowing massive, inflated, and ungrounded lawsuits encourages the opposite result.
If done well, there is nothing wrong with forced arbitration.
I can only repeat: I myself will sign a forced arbitration clause, if I expect it to be vaguely fair, even if it deprives me of the chance to file a huge golddigger lawsuit.
I prefer to play on the winning team, not sue them. Forced arbitration, done well, helps this.
Why would I sign if it's so evil?
If you think arbitrators are compromised then it would be no different with a civil court, which probably has even worse objectivity.
If you're talking about the only factory in town with jobs available to feed your family, then it would be an understandable situation but high-paying white-collar positions with these benefits and flexibility are an unimaginable luxury for most and do not qualify as any sort of forced scenario.
[0]http://employeerightsadvocacy.org/publications/widespread-us...
You seem to be suggesting that employees put, at the top of their priorities list for where to work and how to support their families, a practice that is widespread in the industry, poorly understood by laypeople, and not predictably encountered by any particular individual, in order to live up to your standard of being 'accountable'. That is not reasonable.
In your own link, the only relevant detail is that over half of the Fortune 100 use forced arbitration without a meaningful choice. That's bad, and I already said that it should change, but it means the other half don't have it. Also talking about companies is not the same as your entire industry, so it's not as simple as you make it sound.
It's always easier to blame the victim than to change the system that made them a victim. The Google Employees are not just speaking for themselves:
>“2019 must be the year to end a system of privatized justice that impacts over 60 million workers in the US alone.”
In fact, those who are speaking out are probably the least likely to effected by forced arbitration, because arbitration is optional for FTEs @ Google
[0]https://www.epi.org/publication/the-growing-use-of-mandatory...