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Franken denounces use of mandatory arbitration in employment cases

ASHINGTON, D.C. — In a hearing today on whether the Supreme Court has been misinterpreting laws to protect workers from discrimination, Sen. Al Franken denounced the use of mandatory arbitration, grilling a witness who suggested that the legal process benefits the employee.

Addressing Mark A. de Bernardo, a Washington D.C. lawyer who testified in defense of arbitration, Franken said: “You said in your written testimony… that employees have 63 percent chance of prevailing in arbitration and 43 percent chance of prevailing in employment litigation.

“This seems to be part of [your] case that this is better for employees, that’s your case. So, I am asking what [do] those statistics mean? And you don’t seem to know what they mean.”

Demanding “yes” or “no” responses from de Bernardo, Franken said he wanted to know what, exactly, “prevailing” meant. He asked: Could a $50 reward to the plaintiff be counted under “prevailing”? Could $100? 

Franken used the case of Jamie Leigh Jones, who also testified at the hearing, as an example.

Jones alleged in 2007 that she was raped by multiple co-workers while serving in Iraq in 2005. But Jones has been prevented from taking her case to court because of a mandatory arbitration clause in her employment contract. (An appeals court recently ruled that Jones’ lawsuit could go to court, but her former employer, Halliburton, has filed a petition for re-hearing to try to return the case to arbitration).

“As far as you know,” Franken said to de Bernardo, “if she got $50 that would have counted under your 63 percent? Would she also have prevailed if she got $50 and the price of that was her silence?”

De Bernardo said: “We go to the research that is out there, we go to the statistics that are available. They are reliable statistics… this is an awful set of facts…”

“I just asked you a question,” Franken interjected.

De Bernardo did not specifically answer what “prevailing” would specifically include.

In arbitration, a third-party (often chosen by the company) reviews the case and makes a judgment outside of the court system. Critics of the legal technique point out that under binding arbitration agreements it is difficult — sometimes impossible — to appeal the decision.

But proponents of arbitration argue that it is cheaper and faster than litigation.

On Wednesday, Sen. Patrick Leahy,  chairman of the Judiciary Committee, said to de Bernardo: “If arbitration is cheaper for both sides, is fairer for both sides, is easier for both sides, than why not have voluntary arbitration?”

De Bernardo discussed the difference between post and pre-dispute arbitration cases.

 “What I do want to say is if we are talking about justice in the United States and who has access to justice, arbitration provides a means by which employees have tremendous access that they otherwise wouldn’t have,” de Bernardo said.

De Bernardo added that plaintiffs’ attorneys often turn down a large number of cases thereby cutting off real access to the court system, or slowing the process down considerably, for employees who want to pursue a case through the courts.

The overreaching purpose of the hearing, however, was to look at whether the Supreme Court has been misrepresenting laws to protect workers.

“The Supreme Court’s recent decisions make it more difficult for victims of employment discrimination to seek relief in court, and more difficult for those victims who get their day in court to vindicate their rights,” Leahy said in his opening statement.

Leahy then pointed to two Supreme Court decisions — one involving age discrimination, the other dealing with arbitration — as specific examples of the Supreme Court misreading the law.

“Congress never intended this [arbitration] law to become a hammer for corporations to use against their employees,” Leahy said. “But in Circuit City, the Supreme Court allowed for just that when it extended the scope and force of the arbitration act by judicial fiat, so as to make employment contract arbitration provisions enforceable.”

In the wake of this year’s Lilly Ledbetter Fair Pay Act, which amended the law specifically to counteract a Supreme Court decision on the matter, Leahy’s comments suggested that the 111th Congress will continue to rewrite and refine the law in response to recent Supreme Court decisions. 

In fact, a bill has already been introduced in the Senate, which specifies that pre-dispute arbitration agreements will no longer be valid or enforceable if it is an employment, consumer, or civil rights dispute.

Sen. Jeff Sessions, the head Republican on the Judiciary Committee, did not argue the recent Supreme Court decisions on Wednesday, but he did disagree with Leahy and Franken on the use of arbitration.

“The idea that is assumed that arbitration is automatically disadvantaging the employee is not true,” Sessions said during his opening statement. “In fact, the opposite may be the case.”

The meeting followed Tuesday night’s passage of Franken’s defense appropriations amendment, which would withhold defense contracts from companies that restrict their employees from taking workplace sexual assault, battery and discrimination cases to court through binding arbitration clauses.


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Comments (2)

  1. Submitted by Dave Palen on 10/07/2009 - 10:23 pm.

    Franken should focus on curing our horrible unemployment instead of making it harder for business to thrive. How much $$$ did he get from trial lawyers, the Democrat’s main source (with labor unions) of political donations?

  2. Submitted by John Burke on 10/08/2009 - 04:46 pm.

    Sen. Franken’s amendment “would withhold defense contracts from companies that restrict their employees from taking workplace sexual assault, battery and discrimination cases to court through binding arbitration clauses”.
    I certainly hope that restriction won’t affect a company’s ability to “thrive” Mr. Palen. If it does, we are in greater trouble than I can fathom.

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