New Report Details Harmful Effects and Pervasive Nature of Forced Arbitration Among Women and African American Workers

Big corporations don’t like abiding by labor laws, like providing higher minimum wages, overtime, workplace safety or even protecting workers from racial discrimination and sexual harassment. The good news for them (and bad news for the rest of us) is that under a rigged system called forced arbitration, they don’t have to. That’s precisely why more and more corporations are turning to forced arbitration to silence their workers and skirt important worker protections that we all depend upon.

Under forced arbitration, workers are required to sign an agreement as a condition of getting a job that essentially waives all their rights. Sexually harassed? Good luck navigating a forced arbitration system the employer controls to get any semblance of justice. Cheated out of pay? Too bad. Under forced arbitration, you can’t go to court or the labor commissioner for recourse.

A new report released today by the Economic Policy Institute (EPI) details just how pervasive and harmful this rigged system is for workers, especially women and African Americans. The report shows that 57% of women and 59% of African Americans currently work under mandatory arbitration agreements. That means justice is out of reach for millions of workers, particularly those in low-wage industries who are most vulnerable to abuse.

Economic Policy Institute:

Mandatory arbitration agreements are used by employers to require workers, as a condition of employment, to agree to arbitrate workplace disputes rather than being able to resolve these matters in court. These agreements bar access to the courts for all types of employment-related claims, including those based on Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and the Fair Labor Standards Act. In other words, when a worker is paid less than she is owed, is fired for being pregnant, or is underpaid because of her race, she cannot have her claim heard in a court of law—instead, she is locked into a process that favors the employer.

And that process is devastating to workers. The report also shows forced arbitration suppresses claims, meaning most workers, understanding that the system is rigged against them, never even file a claim and instead are forced to endure the exploitation and abuse repeatedly.

“Working people depend on the court system to hold employers accountable to the law,” said Cornell professor Alexander J.S. Colvin. “Mandatory arbitration locks them out of the court system and disincentivizes them from pursing justice.”

Policymakers need to act now to protect workers. That’s why Assembleymember Lorena Gonzalez-Fletcher has introduced AB 3080, landmark legislation to protect workers by barring employers from requiring that workers sign away all their rights as a condition of employment. The bill is sponsored by the California Labor Federation.

Forced arbitration is a growing problem that will only get worse if corporations are allowed to continue skirting the law through its use. Laws are only good if they are enforceable. Time to put an end to an outrageous, unjust system that silences women, harms people of color, and mocks the important protections that states like California have worked so diligently over the years to enact.