Did you actually read the employment agreement you received past the part where it said you had the job? Or the agreement you signed when you saw a doctor for the first time, or got a new credit card, or signed up with a new investment or real estate firm?
More people need to know that mediation exists and how to access it, because most of these documents include a mandatory arbitration agreement that precludes your right to your “day in court” if a dispute arises. In general, these agreements are not to your advantage.
For example, I’ll bet Alex Rodriguez wishes he had had a mediation option. You may have read about him in the news recently. Big baseball star? Given over a year’s suspension because of alleged drug use? Dispute settled by arbitration? His is a good example of the mandatory arbitration process in employment and the lack of recourse if you don’t agree with the outcome. (Steve Eder, NY Times, 1/14/14, pp. A1 and B12)
Essentially, with mandatory arbitration you give up your right to sue the person or organization that might have defrauded you (or fired you illegally or cancelled your credit card) because these contracts are take-it-or-leave-it documents. They tell you very clearly that you cannot work with their organization in any capacity unless you accept mandatory arbitration.
Once you sign the agreement, you can’t appeal the arbitrator’s decision because there is no process for appeal as there is in the court system. That is the meaning of “binding.” You have agreed in advance to accept the decision of the arbitrator, a single person rather than a jury, and someone you probably have no role in selecting, as you would a mediator. (A Rod is going completely outside the arbitration process and even the initial definition of the dispute to challenge the outcome, but that’s expensive and most people can’t afford to do that. See Eder’s article again.)
Now, I know some very nice, fair, neutral arbitrators, and the people who work with them are lucky. Too often, though, the arbitrators are industry insiders chosen for their expertise, often paid by the industry or organization that wrote the contract, and they “tend not to bite the hand that feeds them.” (David Lazarus, LA Times (12/26/13) Only 900 people out of tens of millions of people subject to arbitration clauses for financial services disputes ever go to arbitration, and 94% of those cases are decided in favor of the business. The fees can be higher than those for filing a law suit, so most people will just pay the amount assessed; the challenge is too expensive for a process that feels unfair to start with. (Lazarus, 12/26/13)
Recent court decisions have also decided in favor of the businesses that demand these clauses putting employees, consumers, and small businesses at significant risk. U.S. Supreme Court Justice Elena Kagan, in a dissent from a decision that precluded restaurants from filing a class action suit against a credit card company over its fees, wrote that the decision boiled down to “too darn bad” (Nan Aron, LA Times, 1/14/14, p. A13). And no matter how unfair the decision may seem, there is no recourse. Too darn bad, indeed.
So here’s, what I do.
Each time I have an opportunity to sign a piece of paper with an arbitration clause, I write “mediation first!” in the margin. It probably won’t do any good if there’s a dispute, but it communicates the intent, and it has never been challenged or received a response. I wonder if the lack of challenge can be interpreted as implied agreement? Hmmm. Need a lawyer for that.
And each time I write a proposal for a client, I include a mediation clause. I have never needed it, but I want it there.
You can also write to your representatives in Washington. The Consumer Protection Agency is working to preclude some of these clauses in consumer agreements to create a more level playing field for small businesses and consumers, but that means that employment disputes over fair treatment and equal access won’t be covered.
The Arbitration Fairness Act is now pending in Congress and would bar forced arbitrations in employment and civil rights cases. Claims of employment discrimination and wrongful termination are covered by these arbitration clauses, and the right to join with others in a class action suit is also covered, making it almost impossible to prove employment discrimination. Let the right people know you are in favor of reform.
And I promote mediation whenever possible (even at a friend’s birthday brunch). Part of the problem is that too few people know there is an alternative to both arbitration and litigation. Most city consumer affairs departments have mediation services where people can file a complaint, and trained mediators get the vendor and the consumer together to sort things out before a law suit is filed. And most counties or districts across the country have community or court mediation services where you can go before filing a lawsuit or trying mediation before trial. Even when people know about mediation, they don’t know how to access the service or find a mediator so they default to legal action.
Unless more people know about mediation and how to access it, and then insist on using that process first, mandatory arbitration will continue, and we will continue to lose access to the justice system.
Here’s another new year’s resolution: Promote mediation first.