Did You Sign an Arbitration Agreement?

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Did you know that millions of US workers are currently “barred” from the court system? Did you know that you may be one of them and not even realize it? Approximately 60 million American workers have signed arbitration agreements or arbitration clauses and they may not have even realized they were doing so.

Close to 50% of all non-unionized workers employed at companies in the United States are subject to arbitration agreements (according to the Economic Policy Institute). This number has more than doubled since the early 2000s. Major employers across the nation have adopted them as standard, including: Uber, Google, McDonald’s, Starbucks, Walmart, Macy’s, and more.

The increase in the use of mandatory arbitration agreements is making it increasingly difficult/impossible for employees to seek justice when they are victims of wage theft, discrimination in the workplace, retaliation, harassment, overtime violations, etc. The recent Supreme Court ruling allowing employers to prohibit class-action claims from workers in arbitration only increased the incentive for companies to include arbitration clauses right in their employment contracts for new hires.

The practice was once limited to business to business contract disputes, but it is now extending to legal disputes with employees and consumers. This change occurred after a significant Supreme Court ruling in 2001 related to sexual harassment. In Circuit City Stores Inc. v. Adams, an associate working at a Circuit City store in California sued the company for sexual harassment. The associate’s name was Saint Clair Adams. He said he was harassed by his co-workers because he was gay. He, like all the other employees of Circuit City, had signed an arbitration agreement stating that all disputes with the company must be resolved through private arbitration. The company argued their case in federal court, insisting that Adams was required to move his claim to arbitration due to the agreement.

The judge on the case sided with the plaintiff, Adams, and cited the Federal Arbitration Act. The Federal Arbitration Act allows companies to resolve contract disputes through arbitration but includes a provision that excludes employment contracts. The judge’s ruling was later upheld by the Ninth Circuit Court of Appeals.

The argument didn’t die with the appellate court though. Circuit City took the case to the Supreme Court where the lower court’s ruling was overturned – extending the reach of arbitration clauses to nearly all employment contracts. The justices based their decision on a close reading of the employment exclusion in the Federal Arbitration Act, which reads, “but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in interstate or foreign commerce.” The justices interpreted this to mean that “transportation workers” were exempt from mandatory agreements; and that non-transportation workers would be required to take their claims to arbitration.

Another Supreme Court ruling in May 2018 made it even more difficult for workers to seek justice or force a company to change working conditions. The case was Epic Systems Corp. v. Lewis and the court decided that it is legal for employers in the United States to prohibit employees from joining together to file suit against the company claiming discrimination, wage theft, or other common workplace violations.

Do you have questions about how to deal with workplace violations when there is an arbitration agreement in place? Call one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Some Companies Are Responding to Worker Demands to Limit Arbitration

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In response to the social and political climate, some companies are already starting to limit arbitration on their own. Mounting pressure from employees as well as the general public after the #MeToo movement had several Silicon Valley tech giants altering their policy and no longer requiring workers to take their sexual harassment cases to arbitration. The first to make the change were Uber and Microsoft. Google and Facebook announced plans to follow suit not long after.

While the change is heading in the right direction, some employees are still unhappy with the state of affairs. They say the exclusion for sexual harassment claims is nowhere near enough. For example, Google experience major backlash after a recent article in the New York Times offered details about how the tech giant paid out millions in exit packages for male executives who were accused of sexual harassment, while staying silent about the actual harassment.

Anger over this situation only added to the already mounting frustration at Google over ethical and transparency issues. The tension built up to a walkout on November 1st. Over 20,000 Google employees and contractors walked off the job in protest of Google’s method of dealing with sexual harassment claims. Employees demanded that Google executives end forced arbitration for discrimination claims (including sexual harassment, racial discrimination and gender discrimination), amid other demands. The company agreed to some of the employee’s demands a week later, but only agreed to drop mandatory arbitration for claims of sexual harassment and assault.

Organizers of the walkout were glad that Google responded with some positive change, but were disappointed that they ignored completely the opportunity to address widespread racial and gender discrimination claims.

If you need to discuss discrimination or sexual harassment in the workplace, and you aren’t sure where to start, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

#MeToo Movement Brings to Light a Growing Problem with Mandatory Arbitration Agreements

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In the wake of the recent #MeToo movement, many are starting to speak out about the fact that mandatory arbitration agreements may be particularly bad for women. When the #MeToo movement resulted in more and more female workers coming forward to report instances of sexual harassment in the workplace at companies like Fox and the Weinstein Company, many of them quickly realized that they would not be able to seek justice in the courts because of arbitration agreements they were required to sign as employees. 

For instance, Gretchen Carlson, former Fox News anchor, signed a required mandatory arbitration agreement. She sued former Fox News CEO Roger Ailes for sexual harassment and received an undisclosed settlement. But she was not able to sue Fox News for their rose in allowing the sexual harassment to continue. Dozens of other women who experienced similar situations at Fox found themselves in the same situation.

As more women come forward to speak out about sexual harassment on the job, many are putting the pressure on Congress to take action and restrict or even eliminate arbitration clauses from US workplaces.

Recent Legislative Actions:

October 2017 – The Mandatory Arbitration Transparency Act was introduced. The Act prohibits businesses from including a confidentiality clause in arbitration agreements in connection with discrimination claims.

December 2017 – The Ending Forced Arbitration of Sexual Harassment Act was introduced exempting sexual harassment cases from mandatory arbitration.

February 2018 – 56 state attorneys general (5 from US territories) weighed in with a letter urging congressional leaders to vote on the bills.

March 2018 – The Arbitration Fairness Act was proposed, which would let workers and consumers decide where they should pursue their legal claims.

October 2018 - The latest bill, the Restoring Justice for Workers Act, would prohibit employers from banning class-action claims.

If you need to speak with an experienced California employment law attorney because you are experiencing labor law violations and aren’t sure how to seek justice, please get in touch with us at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

New Bill Could Protect the Rights of US Workers to Access the Court System

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On Oct. 30th, 2018, House Democrats introduced the Restoring Justice for Workers Act, a bill intended to protect the rights of millions of US workers to access the court system. The Act would ban companies from requiring workers to sign arbitration clauses and would impact millions of workers across the nation.

The policy of requiring that employees and applicants sign arbitration agreements is now common practice. In fact, most sign one before they are ever officially hired. By signing the arbitration agreement, workers are essentially waiving their right to sue the company for potential violations of labor law (i.e. sexual harassment, racial discrimination, age discrimination, wage theft, wrongful termination, etc.) According to the terms of an arbitration agreement, employees with legal claims would need to take those claims to private arbitration; a forum without a judge or jury and with almost no government oversight. A fairly secretive process, private arbitration means that workers are significantly less likely to win their cases. If they do prevail in their case, they generally receive far lower settlements than if the case had been handled in the court system.

The new bill is fairly simple – employers would not be allowed to require that workers sign arbitration agreements and would also be prohibited from retaliating against anyone who chooses not to sign. It would be illegal to require employees to waive their right to join a class action lawsuit or file legal claims in arbitration as a group or class.

Supporters of the bill see it as a great stride in the right direction as forced arbitration is stripping American workers of their day in court; their chance to hold employers responsible for employment law violations (i.e. wage theft, overtime violations, discrimination, workplace retaliation, wrongful termination, harassment, etc.)

To make it through both chambers of Congress, the bill would need bipartisan support, but supporters do not expect Republican leaders to show much interest as they haven’t been interested in other legislation aimed at limiting mandatory arbitration in the past. Whether the bill is passed or not, controversy over mandatory arbitration agreements continues to escalate.

If you have questions about mandatory arbitration agreements or how to join a class action lawsuit, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

The Weinstein Sex Scandal is Far From Over

While some have commented that in spite of the continuing sexual assault and harassment claims against Hollywood mogul, Harvey Weinstein, it would be difficult to build a criminal case, that doesn’t mean there will be no legal ramifications. It is very likely that Weinstein’s alleged mistreatment of women will lead to costly civil lawsuits that could have severe consequences for both the executive himself and his namesake film and TV company due to the significant potential liability involved.

According to California law, Weinstein Co. could be held liable for Weinstein’s alleged sexual harassment. Whether or not alleged victims could bring a lawsuit against 65-year-old Weinstein would depend on the California statute of limitations for civil sexual assault (2 years in California, although Weinstein has also been accused of similar behavior in New York where the state of limitations is 3 years). Experts in sexual assault and the law expect to see a flood of lawsuits head Weinstein’s way unless he has already settled with the victims outside of court.

Possibly to minimize any more legal trouble, Weinstein Co., fired Weinstein after a New York Times investigation discovered that Weinstein had reached a minimum of 8 legal settlements dating back to 1990 over various instances of alleged sexual harassment. The New Yorker published a story that included an array of allegations, but one stood out from the rest. The respected news outlet reported that Weinstein had raped 3 women in the last 2 decades, including well known actress, Asia Argento, from the 1999 drama “B. Monkey” distributed by Miramax. Weinstein has previously apologized for “his behavior,” but does deny claims of rape, stating that he believed all the relationships to be consensual.

Weinstein Co.’s board or directors publicly stated that they were shocked and dismayed by the allegations being made and that they supported investigations into the alleged acts.

If you have questions about sexual harassment or misconduct in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Homosexuality Taunts Lead to $17.4 Million Verdict for LA Sanitation Worker

In recent news, a Los Angeles sanitation worker, James Pearl, who was taunted on the job regarding his perceived homosexuality comes away victorious with a $17.4 million verdict. The LA jury found that he endured routine harassment at the hands of his supervisors, who had falsely assumed he was gay. While the jurors deliberated for two hours, they did come out with a unanimous decision regarding James Pearl’s case.

The jurors decided that Pearl was subjected to verbal abuse, hazing, and bullying. For instance, Pearl’s photo was digitally altered to show him in a same-sex relationship with a subordinate. These altered images were circulated amongst the city employees as a part of the bullying campaign.

One of Pearl’s colleagues alerted a manager in the highest ranks of the Bureau of Sanitation regarding the situation and the mistreatment that was occurring, but according to court documentation, the supervisor did not take action. Pearl started his career with the Bureau of Sanitation in 2002. He was promoted in 2006 to wastewater collection supervisor.

In 2011, Pearl filed a complaint of discrimination with state regulators. In the complaint he alleged that he was transferred to an office in Reseda because he was black and as retaliation because he complained about misconduct in the workplace. Days after the complaint was filed, Pearl was formally notified that the city was recommending his firing. He was accused of falsifying time documents for a subordinate who was also perceived by those in the workplace to be gay. He was then terminated on August 30, 2011. He reported the situation to the state regulators, advising them that the firing was retaliation motivated by his perceived homosexuality. He also attempted to fight back against his firing through internal procedures with the L.A. Board of Civil Service Commission.

After 13 months off the job, the panel determined his firing was unfounded and Pearl was reinstated. While Pearl was off the job, a supervisor continued showing the digitally altered photo of Pearl to employees. When Pearl returned, he received a lower-paying day shift, regularly faced accusations of misconduct, and was given the same supervisor who had been showing the digitally altered photograph to employees. The leadership in the workplace referred to Pearl using derogatory terms and continued the bullying campaign by circulating offensive messages and leaving objects on Pearl’s desk suggestive of or related to homosexual behavior.

In court documentation, the city contended that Pearl did not complain internally regarding the alleged mistreatment that was occurring and also claimed this his work assignments were dictated by budget cuts and a diminished staff.

The California lawsuit was filed in Los Angeles County Superior Court in 2014. Pearl, who is now 55 years old, has been on permanent disability. He suffers from both physical and psychological damage as a result of the discrimination.

If you experience discrimination or harassment in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

According to a 2015 Study, Women in Forest Service Face Assault & Retaliation

In a recently released study or “workplace environment assessment” of the Pacific Southwest Region obtained under the Freedom of Information Act, it is reported that women in the Forest Service industry working in California reported enduring sexual misconduct, harassment and fear of retaliation if they voiced complaints. General satisfaction with the workplace was voiced by many employees, but the 2015 survey indicates that there is a clear difference when responses are considered by gender. Women were significantly more likely to identify serious problems.

The grievances covered in the study ranged widely from misdeeds to mismanagement, but they did seem reminiscent of complaints lodged by women in the military and other general federal agencies. Some notable concerns included: inappropriate behavior from supervisors on the job, derogatory or patronizing attitudes towards women on the job, a lack of accountability when issues arise, a lack of respect towards subordinates, etc.

One conclusion noted in the study was that a male-dominated workforce can lead to a number of negative consequences for women in the field.

The report was commissioned by the Forest Service. It was prepared by a consulting firm, ICF International, and provided to McClatchy on May 18th after a December 1st FOIA request. The report falls in line with other, similar investigations conducted by congressional committee as well as the Interior Department’s Office of Inspector General. All the sources identified similar “management missteps” and alleged mistreatment of women on the job in the National Park Services. Some view it as an exposure of a systemic problem in the government’s public lands departments and agencies. It was indicated that remote locations where a separate code of conduct for providing discipline is seen as acceptable might have contributed to the problem.

Members of the Congressional Caucus on Women’s Issues hoped to have a hearing later in 2017 regarding the National park Service and Forest Service workforce controversies.

If you have questions about workplace retaliation or if you experience sexual harassment in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.