Google employees pushing for nationwide legislation banning forced arbitration
recode.net
recode.net
The problem then seems to be not the idea but the implementation. If we could get rid of the bias, arbitration could be an effective solution to resolving workplace disputes in a manner much faster, cheaper and with less headaches than courts.
The problem of bias in arbitration doesn't seem like an insurmountable one to me. Imagine if both the employee and the employer had to agree to an arbitrator or arbitration company - failing which the matter has to go to a state run court.
Imagine if there was a rating system - where people or lawyers can rate arbitrators on their fairness and knowledge of the law.
Arbitration is widely used in b2b settings. The problem with employee employer arbitration isn't the arbitration itself, it's the power imbalance and the employers control of the arbitrator.
What legislation should target is employers who control arbitrators and use them as a rubber stamp court.
Another way of thinking about it: reducing the price of formal dispute resolution will cause induced demand. There are disputes that employers would send to arbitration if possible and settle out-of-court if not. It's not necessarily the case that making dispute resolution cheaper per case resolved will result in less money spent on it in aggregate.
Realistically though the BATNA is no lawsuit at all because the plaintiff can't afford it.
Its a matter of degree, Companies know they can screw employees under a certain amount where its not worth it to challenge them in court. With court costs as high as they are that amount is in the tens of thousands of dollars.
That's only because of the bias in the current system. Ideally, given a set of facts and law, a damage calculation should be fairly objective. Thus both the arbitrator and the judge should come to similar outcomes. Because of this, settlement in a fair arbitration system should come pretty close to settlement in the courts.
The reason pre-arbitration settlements are ineffective is that the arbitration system is broken. It's being used as a rubber stamp court by the institutions that pay the arbitrator's salary. Thus there is little incentive for them to settle at any reasonable amount. In a fair arbitration there would be an incentive to settle because the employer would not control the arbitrator and thus the outcome.
I grant that perhaps settlements in arbitration may still be a bit lower than settlements in the courts because the huge time and cost investment are no longer a factor . . . but that's hardly a bad thing.
Gupta ( if you know who it is) can not be sure of it..
Google employees have an advantage over lower wage workers because in america people with money are more important to legislators than those with less.
Uber and Chipotle are two examples of arbitration working as intend by employers.
https://www.reuters.com/article/legal-us-otc-uber/forced-int... (Forced into arbitration, 12,500 drivers claim Uber won’t pay fees to launch cases)
https://www.latimes.com/business/hiltzik/la-fi-hiltzik-chipo... (Chipotle may have outsmarted itself by blocking thousands of employee lawsuits over wage theft)
In the both cases it's clear that they never intended to go into arbitration, and just assumed the amount of time required vs. the reward would not be worthwhile. The moment that the bluff was called they immediately tried to avoid the "efficient" option: Uber isn't paying the arbitration fees, chipotle tried to lawyer their way out of what They chose to force on their employees.
Come think of it, is there anything left that doesn't require arbitration?
About the only way out seems to be to have no business dealings with the company. If an airline drops a huge chunk of blue ice through my roof, and I haven't used that airline, then I guess I can still sue them. This isn't much comfort, because nearly every situation in which I might want to sue a company would involve doing business with the company and thus being subject to an arbitration agreement.
a) biased in favor of the company
b) For lower income workers costs much more than the potential "win" for getting back what you are owed - the typical case being stolen wages, that are often less then the employee born cost of arbitration.
c) They prohibit the constitutional right toclass action law suits - combined with (b) this makes mass already illegal exploitation essentially free: it's just not cost effective for victims to to individually litigate their minor costs.
Companies say it's purely about efficiency, but it is absolutely about making it uneconomical for employees that are victims of illegal actions to receive compensation. See the recent case where uber is trying to avoid the arbitration they required (https://www.reuters.com/article/legal-us-otc-uber/forced-int...), and chipotle trying to avoid the forced arbitration when their employees actually enacted it: https://www.latimes.com/business/hiltzik/la-fi-hiltzik-chipo...
Costs of arbitration after borne almost entirely by the company. This makes it cheaper to bring a complaint. But it creates a conflict of interest where the company never loses. The arbitrator is paid by the Corp, so if the arbitrator rules against them, the Corp will just pick a different arbitrator.
This ignores that if you are a low wage employee subject to this kind of contract you are unlikely to be able to afford the initial retention costs.
My inclination would be to allow the arbiter to be selected by the employee. If companies really do believe arbitration is fair they should have no problem with that.
See, I can make unfounded, uncharitable comments too.