Civil Rights Claims & Unaffordable Arbitration: Lack Of Employee Access To Arbitration

The employer is saying that if my client wants the employer to take action against 3 fellow employees who call him “Nigger” that he has to pay half of the costs of arbitration. The employee doesn’t have the money. See 10cv1013, U.S. D. Ct. N. Illinois
The simple, real fact is that it costs less to litigate a civil rights claim in federal court than in arbitration.

The decision by the New York Court of Appeals in Brady v. The Williams Capital Group, L.P., 2010 WL 1068163 (N.Y. Mar. 25, 2010) should cause us to note that some employer mandated arbitration agreements not only take away an employee’s right to sue the employer in court, but as well, impose arbitration costsexpenses on the employee. The employee who lacks funds is unable to make use of the arbitration process.

The above mentioned New York case prompted me to write this article. I am a Civil Rights attorney based in Chicago. I represent plaintiffs, victims, petitioners, claimants, call them what you may. My days are spent prosecuting Title VII; 42 USC 1981 and 1983 claims among others. While my court calendar is full, I have my share of cases that are in arbitration. These are the cases relegated to arbitration by arbitration agreementscontracts in which employees agree to bring any and all disputes with the employer to arbitration, rather, than to a court of law.

Now, I want this article to be different from the typical article that is critical of schemes in which employers coerce their employees to enter into arbitration agreements. There are countless such articles that rightly assail an employer taking away a employee’s right to bring a grievance to a court of law. While some issues in dispute may be ripe for arbitration, I believe that it is reprehensible that allegations of fundamental civil and human rights violations [in the workplace] are forced into arbitration.

I want to assume that my audience does not need a refresher course on Contract or U.S. Constitutional Law. With that said, I complain today that not only are some employers taking away employees access to the courts through arbitration agreements, but many arbitration agreements impose on the employee that heshe must [also agree] to pay half of the of the costsexpenses of arbitration. Costs and expenses of arbitration come into play from the moment the demand for arbitration is filed and are ongoing. The costsexpenses are two things: the filing fee and the arbitrator’s hourly rate. In a bit, I will talk about the cost of the hearing transcript (in cases in which the employer insists on the attendance of a court reporter and that the employer demands a right to file a Post Hearing Brief) and that it is my belief that the employer is responsible for paying for the claimant’s copy.

Half of the costsexpenses of an arbitration process for a dispute in which an employee complains of a deprivation, by hisher employer, of civil rights, through events such as sexual assault/ harassment; racial discrimination; age discrimination; and disability discrimination, is approximately $20,000. 00. I present this figure based on personal experience as a lawyer in many arbitration processes. Allegations of civil rights violations prosecuted through arbitration are costly and typically require a 2 to 3 day hearing. The hearing transcript is approximately $6500.00 to $8000.00. Consider that it is the $12.00 hour employee at your local supermarket and or retail store among other places who signs these awful contracts in which they waive their right to go to court in lieu of arbitration contemporaneous with agreeing to pay half of the costs of arbitration. Remember, if they don’t sign, they don’t get the job.

The end result—- should the $12.00 hour employee need to file for arbitration, say —because she was fired for having rejected sexual advances of her boss; or the employee who objects to being called “Nigger” —-is that the employee can’t prosecute their dispute/grievance, since they lack the financial resources to pay half of the costs of the arbitration process.

Once again, I am a Civil Rights attorney. In the context of employment disputes, by the time a prospective client contacts a Civil Rights attorney, he or she is in a terrible emotional and financial position. They just suffered a life changing event such as the loss of their employment. Many of my clients have given many years to their employer only to be fired because they are too old, too black, too Gay, too religious or suffer from a “qualified” disability.

I have compassion for my clients. They have bouts with depression and anxiety following their job loss. To be the best person that I can, I take their frantic telephone calls after work hours, late at night, on weekends and even Christmas Day. The worst times for many of my clients are weekends—-two day weekends to us, but weekends that seem to drag endlessly as they await to hear a decision of the other side or arbitrator or judge.

The impetus for many of the psychological issues civil rights litigants/claimants face is financial —not knowing how they will pay the rent, the mortgage, etc. The client’s financial situation is not good. In this regard, I agree to represent my clients on a contingency and I take approximately 27 to 29% not 33 & 3rd% or 40% .

I read my client’s employee handbook and or other documents and discover that heshe has signed an arbitration agreement waiving his right to take hisher employer to court. As much as I abhor the fact that it is legal for an employer to mandate arbitration for alleged civil rights, I am even more mortified that many employers require that their employees pay half of the arbitration costs. Consider the language in an agreement had by Gibsons Restaurant Group LLC.: “The costs of arbitration including fees and expenses of arbitrators, shall be shared equally by the parties unless required by law….”

My approach when I read a contract of this sort is to contact the employer and remind the employer of the American Arbitration Association (AAA) Rules (the entity which many employers designate to oversee the arbitration process). The AAA holds that an “employer promulgated plan” (verses an individually negotiated employer agreement or contract) obligates the employee to pay ONLY $175.00 (see AAA’s Fee Policy, p.1, Para. (i)). The AAA Fee Policy reads in part: “In cases before a single arbitrator, a nonrefundable filing fee in the amount of $175.00 is payable in full by the employee when a claim is filed, unless the plan provides that the employee pay less. A nonrefundable fee in the amount of $925.00 [1] is payable in full by the employer, unless the plan provides that the employer pay more” (AAA’s Fee Policy, p.1, Para. (i)).

Typically, the employer is unswayed by my insistence that they adhere to AAA rules. Why should it be? The AAA has no enforcement power at this stage and the employer knows it! It was my experience in another case, that when the employer (a well-known financially solvent appliancehardware store) initially refused to pay AAA the employer portion, the AAA sent the undersigned and opposing counsel notice that the matter would be dismissed by the AAA for non-payment by the employer.

I also explain to my adversary that the employer (their client) is bound by 9 U.S.C. §§ 1-14. In this regard, Rule 1 of the American Arbitration Rules reads in part: “Applicable Rules of Arbitration: The parties shall be deemed to have made these rules a part of their arbitration agreement whenever they have provided for arbitration by the American Arbitration Association (hereinafter “AAA”) or under its Employment Arbitration Rules and Mediation Procedures or for arbitration by the AAA of an employment dispute without specifying particular rules.*” AAA Rules at Having said this, I remind the employer that if it does not assume all but $175.00 of the costsexpenses of arbitration that I will seek Declaratory Relief in the federal court.

I file in court and seek to have the arbitration agreement declared invalid and or unenforceable for reasons of substantial unconscionability. The basis of which is that the agreement imposes too great of a financial burden on the plaintiff (my client), because it makes himher pay half of the costsexpenses of arbitration.

Once again, my practice is in the U.S. District for Northern Illinois—I spend my days in federal court citing federal law. In addition to citing the court’s jurisdiction pursuant to the Federal Arbitration Act, I add in my pleadings that Illinois law [2] recognizes two forms of unconscionability: substantive and procedural. [3] I go onto to assert that “[T]he issue of unconscionability should be examined with reference to all of the circumstances surrounding the transaction.” Kinkel, 223 Ill. 2d at 24, 857 N.E.2d at 265. I argue that if the employeeplaintiff must pay half of the costs-expenses, then the arbitration agreement is substantively unconscionable because my client (the employeeplaintiff) does not have that kind of money. One could also assert a Due Process violation. Shouldn’t every American have access to the courts? Shouldn’t a mandated arbitration process be accessible and if it is not, then, perhaps, there has been a due process violation; after all, I believe that we have a fundamental right to access the courts. In my opinion arbitration agreements that do not except alleged civil rights violations violate the 14th Amendment. This is a discussion for another day.

When a party seeks to have an arbitration agreement declared invalid on the basis of prohibitive expense, that party bears the burden of proving that the contract is unenforceable. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 92 (2000). [4] This burden can met by the plaintiff swearing out an affidavit. Personally, I think that, in addition, it is helpful to present the court with documents evincing the costsexpenses that were incurred in past arbitrations in cases with similar facts.

I am going to present you with a hypothetical: Consider that Jane, a working class single mother of a small child, seeks employment with “Big Corporation Department Store” (BCDS). She is told by BCDS that there is a position it wants her to fill. Additionally, she is told that she will be denied the position if she does not sign an arbitration agreement which holds that she must use arbitration to seek relief as to any and all disputes that she has with BCDS. As do most people, Jane signs the agreement. Soon after, she is sexually harassed in the workplace by her supervisor. This includes the supervisor sending Jane more than three dozen unsolicited text messages in which he makes sexually explicit statements and demands that she has sex with him or lose her employment situation. She complains to higher level management of the text messages, etc. and she refuses to sleep with the supervisor. Management fails to act and then she is terminated by her supervisor for refusing to have sexual relations with him. The BCDS arbitration agreement imposes on Jane that she must pay half of the arbitration costs. Jane simply cannot afford such costs that will surely exceed $20,000.00.

The scenario above is in large part real, based on real facts. I assert that it is unconscionable in our society that our laws do not prohibit BCDS from imposing mandatory arbitration in cases of civil rights violations (in this case a Title VII violation). My tangential point is that I implore the Obama administration to pay more attention to civil rights. I ask: Why hasn’t Congress intervened? America needs laws that make it illegal for anyone to be coerced, by an employer, into arbitration where the claimantpetitioner asserts a violation of hisher civil rights.

I believe that companies like BCDS do not inadvertently write arbitration agreements that impose that the employee pay half the costs of arbitration. Rather, BCDS and companies like it intend to cause a situation in which the aggrieved employee is without recourse. The former $12.00 employee can’t afford half of the costs of arbitration; therefore, cannot maintain or participate in the arbitration process. BCDS will never be liable for what it allegedly did to Jane. Those of you who are reading this and think that the EEOC or state human rights agency will come to rescue, are truly mistaken. The EEOC is largely inept. The agency is overwhelmed. It lacks the resources to investigate most of Title VII violations, etc. filed with it. Under this Presidential administration, the EEOC performance seems far worse than it has been in years prior. First, the EEOC is woefully slow in conducting investigations. When it does rule on a case, perhaps a year later, it is most likely to rule that it was unable to find discrimination—another way of saying that “we” (the EEOC) were unable to conduct an investigation because of our workload. Second, when the EEOC learns that you are in Arbitration, it stays its investigation. If you lose in Arbitration, it will certainly dismiss your case.

Consider that if I have a client not bound by an arbitration clauseagreement, I am able to file a civil rights lawsuit in federal court. So, off to court I go on behalf of an individual who says she was fired for not having sex with her boss. She is now unemployed and may or may not be receiving unemployment compensation. (Typically, the company will successfully fight the award of unemployment benefits. The unemployment assessment process seldom gives credence to allegations of sexual or racial discrimination or other civil rights.) I provide her (my client) with a Pauper’s Petition in which she asks the court to waive the $350.00 filing fee. I find that most federal judges are very sympathetic to these types of plaintiffs and grant the petition. The BCDS type arbitration clause offers no such benefit (waiving of fees for indigence).

I represent most of my clients on a contingency fee arrangement. I can litigate their Civil Rights case in federal court usually in about 8 months to a year and not spend as much money as I would need to spend if I prosecuted the case in an arbitration process. The simple, real fact is that it cost less to litigate a civil rights claim in federal court than in arbitration.

Here is more information: At the arbitration [hearing], companies like BCDS always want a court reporter. The employer will add that it wants the arbitrator to allow for the parties to file a “Post Hearing Brief.” The latter can be an intentional act to gain significant advantage over the claimant. The reason: the cost of the transcript (created by the court reporter and needed to write an adequate Post Hearing Brief is way out of reach to the claimant). [5]

In two recent cases, the arbitrators in both cases approved the requests by the employers that they be allowed to file a Post Hearing Brief. But the employer did not want to give me a copy of the hearing transcript (a copy that the employer would have to purchase). The employer had no problem paying for a copy of transcript for the arbitrator. I successfully argued in both cases that the AAA rules and the fact that the employer wanted the court reporter required the employer to pay for my client’s copy of the transcript. In one of the cases, the transcript was approximately $8000.00. However, my success has its limits. Consider the case I have right now in the AAA against Dania Furniture Collections.

My client, a white male, had a baby with a black woman several months ago. He complains that while employed by Dania, he was repeatedly told by a fellow employee: “Your family is a bunch of Niggers”; and “Your Nigger Family.” My client adds that he was denied Paternity leave (FMLA) by Dania because he had a baby with a black woman. He reports that he had [had] enough on January 4, 2010. That day, he arrived to work to find a posted drawing of himself being lynched. He reports that he carried the drawing into his supervisor and that when he told the supervisor that he needed Dania’s assistance to stop the harassment that the supervisor told him to forget about it.

My client states that he asked the supervisor for the phone number for the corporate office in California. The supervisor admits that he gave him the number but told my client that he could not contact the corporate office on company time and that he would have to do so after work or at his lunch. My client complained to corporate and was subsequently fired for allegedly making false statements as to the drawing and racial epithets. The employee who did the drawing stated: “I drew the air bag drawing in question and had no intent of it being offensive to anyone…it is just a silly picture.”

I have presented all of these facts in order to show the reader that the allegations in the Dania case are serious. I want the reader to agree with me that allegations of this sort should be exempt from employee-employer arbitration agreements.

The hearing in this case is scheduled for October and will likely take 3 days. Dania has stated it will have a court reporter at the hearing and that it wants to file a Post Hearing Brief. All ready, Dania has expressed that it should not have to pay for my client’s hearing transcript. This objection is all too common and is yet another way to deprive a victim of justice. Fortunately, I am sometimes prepared to pay for my client’s hearing transcript (although, I should not have too). Consider that even in contingency fee arrangements, clients are still responsible for administrative costs (i.e., transcripts); however, most are financially unable to pay even a fraction of their costs and certainly not the cost of a 3-day hearing transcript. Arbitrators should be aware of the imbalance between employees and employers caused when ONLY the employer and arbitrator get access to the hearing transcript. In this case, my goal will be to persuade the arbitrator to allow me to tape record the hearing.

Then there is another case that I have filed in the U.S. District Court for Northern Illinois, Eastern Division, Falconer v. Gibsons, et. al., 10cv1013 (2010). In this case, I am arguing that the aforementioned Gibsons Restaurant Group, LLC arbitration agreement forcing my client to pay half of the arbitration costs makes the agreement unconscionable (and is a violation of AAA rules). In this case, my client, who is black, alleges that he is continually referred to as “Blackie, Gigaboo, Dumb Ass Black MotherFu_ _er and Fagot.”

In the above captioned matter (Falconer v. Gibsons Restaurant Group, Inc., et, al.) the requirement that plaintiff pay half of all expenses and costs is monstrously harsh. Once again, in Illinois it seems to be the law that “The issue of unconscionability should be examined with reference to all of the circumstances surrounding the transaction.” Bess v. DirecTV,Inc., 381 Ill. App. 3d 229,; 885 N.E.2d 488, 2008. Mr. Falconer’s income does not enable him the luxury of being able to afford to pay half of [the] arbitration costs and expenses. [6] By and through plaintiff’s affidavit, plaintiff states that he earns approximately $28,000 and has reasonable monthly financial obligations that total approximately $2090.00. These include a mortgage, public transit costs for travel to and from work, and food and utility expenses. Each month, he is left only with between $168.03 and $200.00.

An arbitration provision is not rendered inherently unconscionable because some of the arbitration costs will be imposed on the claimant. SeeZobrist v. Verizon Wireless, 354 Ill. App. 3d 1139, 1146, 822 N.E.2d 531, 539-40, 290 Ill. Dec. 946 (2004) (citing Green Tree Financial Corp.-Alabama, 531 U.S. at 91-92, 148 L. Ed. 2d at 384, 121 S. Ct. at 522-23). However, his individualized circumstances show that he should not be burdened with arbitration costs and expenses.

The employer is saying that if my client wants the employer to take action against 3 fellow employees who call him Nigger that he has to pay half of the costs of arbitration.

I am convinced those alleging civil rights violations in an employee-employer relationship should not be precluded by arbitration agreements from filing in court. It would be helpful if there is more recognition in the legislative community that many employee-employer arbitration agreements in the U.S. have been drafted in such a way that it becomes impossible for a aggrieved employee to have hisher disputes addressed because the costs of the arbitration process make arbitration inaccessible to the employee (or former employee).

End Notes

1 The amount may have increased from $925.00.

2 While the U.S. Supreme Court has emphasized that the Federal Arbitration Act enunciates a congressional intention to favor arbitration, Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), “general contract defenses such as . . . unconscionability, grounded in state contract law, may operate to invalidate arbitration agreements,” Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 2002).

3 Bess v. DirecTV,Inc., 381 Ill. App. 3d 229,; 885 N.E.2d 488, 2008; Razor, 854 N.E.2d at 622; Williams v. Jo-Carroll Energy, Inc., 382 Ill. App. 3d 781, 890 N.E.2d 566, 569, 321 Ill. Dec. 844 (Ill. App. 2d Dist. 2008) (citing Kinkel, 223 Ill. 2d 1, 857 N.E.2d 250, 306 Ill. Dec. 157).

4 “Where a party seeks to invalidate an arbitration provision on the ground that the arbitration would be prohibitively expensive, that party has the burden to show the likelihood of incurring those costs.” Bess at 240; Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 92, 148 L. Ed. 2d 373, 384, 121 S. Ct. 513, 522 (2000). “In order to meet such a burden, the party must provide some individualized evidence to show that he is likely to face prohibitive costs in the arbitration and that he is financially incapable of meeting those costs.” Livingston v. Associates Finance, Inc., 339 F.3d 553, 557 (7th Cir. 2003).

5 It is advantageous to the claimant to have the arbitrator rule at the conclusion of the hearing eliminating the need for a Post Hearing Brief.

6 The U.S. Supreme Court has held that generally applicable contract defenses, such as unconscionability, may be applied to invalidate arbitration agreements without confounding the Federal Arbitration Act. Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 687, 134 L. Ed. 2d 902, 909, 116 S. Ct. 1652, 1656 (1996).


Christopher C. Cooper

DR. Christopher C. Cooper is a New York City native, a former Washington D.C. (Metropolitan) Police Officer and United States Marine Sergeant (2nd Reconnaissance Battalion and Iraq War veteran).  Presently, he is a Civil Rights Attorney & Ph.D. based in Chicago. A 1987 Graduate of the City University of New… MORE >

Featured Mediators

View all

Read these next


20 Questions to Ask an Employee Before Considering Termination

If you were the manager of this organization, what level of performance or behavior would you expect from an employee in your position?  Do you think your team/the organization has...

By Kenneth Cloke

Restorative Justice: Accountability and Forgiveness

When I read accounts like the one below, I always ask myself, "what trespasses have I suffered that would permit me not to forgive?" As she sat in her boyfriend’s...

By Victoria Pynchon

Bio-physiology and DR

From ADRAC- The Australian Dispute Resolution Advisory Council Blog, organized with Shirli Kirschner Studies of the human response to conflict have confirmed that at the level of our body the response is...

By Shirli Kirschner

Find a Mediator