arbitration

Franken Uses Inflammatory Rape Claim to Destroy Arbitration of Employment Disputes, Including Disputes Totally Unrelated to Rape

by Hans Bader on October 20, 2009 · 1 comment

in Employment, Labor, Legal, Politics as Usual, Sanctimony

Recently, the Senate voted to ban defense contractors — that is, much of American business — from contractually mandating arbitration of employment discrimination disputes.  The bill’s sponsor, Al Franken (D-Minn.), pushed the bill by claiming that arbitration provisions in an employment contract kept Jamie Leigh Jones from suing her alleged rapists.  But they didn’t: a federal appeals court ruled the arbitration provisions didn’t apply to Jones’ case, leaving her free to sue in court.

Franken’s amendment to a defense appropriations bill banned contractors from requiring arbitration of employment discrimination disputes and sexual assault cases, including “arbitration” of “any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment.”  The language about sexual assault was irrelevant to most employers: Lawsuits against employers for employment discrimination vastly outnumber lawsuits over sexual assault, which are a tiny fraction of all court cases, so the bill’s real purpose was to ban arbitration of discrimination cases, not to do anything for rape victims.  Few rapes occur in the workplace, as opposed to private settings like homes; and even rapes that do occur in the workplace often fall outside the scope of arbitration clauses.  (Arbitration does not, of course, prevent criminal prosecution.)

Liberal trial lawyers have long objected to Supreme Court decisions like its 7-to-2 Gilmer decision upholding contractual provisions that require binding arbitration of employment discrimination cases, even though arbitrators often rule in favor of employees and consumers, and award them substantial monetary damages (although they do permit plaintiffs less discovery than courts do; on the other hand, arbitration typically results in “lower litigation costs and expenses“).   Franken’s amendment largely fulfills their fantasy of banning arbitration in discrimination cases.

Although Franken’s amendment has a big effect on discrimination cases — and no effect at all on most rape cases — it has been falsely described ever since as an “anti-rape amendment,” and the 30 senators who voted against the amendment have been depicted ever since by liberal sites such as Huffington Post as the “Republicans for Rape“  — even though the Defense Department opposed Franken’s amendment, and even though Senators like Bob Corker said they might have voted for the amendment had it merely covered rape and violence claims, rather than a vast array of unrelated employment disputes.

Jon Stewart, for example, depicted the amendment as being all about rape, asking his viewers “How is ANYONE against this?” and suggesting that only a nut or a misogynist could do so.  (This is the same Jon Stewart who selectively edits taped interviews to make conservatives look stupid, or make them appear to say the opposite of what they actually said).  But the liberal Stewart has aimed this criticism only at conservative lawmakers, not at the Obama Defense Department (or the liberal Supreme Court justices who voted with their conservative colleagues to allow all employment disputes, including those involving sexual assault, to be governed by contractual arbitration provisions in the Gilmer case).  So has Huffington Post, whose first inflammatory article on the vote generated over 2000 comments, many of them angry and vituperative.  The inflammatory coverage has resulted in Senators who voted against the amendment receiving hate mail and angry and hateful messages.

Liberal journalists and bloggers complain a lot about the use of so-called “wedge issues,” but they themselves are the ones who typically use inflammatory wedge issues, as the Franken amendment illustrates.

Another example is the many false claims made by liberal journalists and Obama about the Supreme Court’s decision in Ledbetter v. Goodyear, a subject I addressed at length here.  In the Ledbetter case, the press claimed that the Supreme Court had created a rigid 180 day deadline for suing over pay discrimination — when in fact it did no such thing.

By the way, studies show that Jon Stewart’s viewers aren’t any smarter than Bill O’Reilly’s — contrary to what liberal journalists believe.

George McGovern on Binding Arbitration

by Ivan Osorio on May 7, 2009

in Economy, Employment, Labor

With Democrats just shy of the 60 votes they need to end a filibuster, the fate of the so-called Employee Free Choice Act remains in the balance in the Senate. While the current version of the bill seems unlikely to pass, EFCA supporters are likely to try alternative versions. One such option is EFCA without its controversial card check provision, which would allow unions to circumvent the secret ballot in organizing elections, and has been the bill’s most controversial provision to date.

However, EFCA-minus-card check would still be economically toxic. Specifically, its binding arbitration provision would put businesses at the mercy of the federal government. In today’s Wall Street Journal, former U.S. Senator and Democratic presidential candidate George McGovern, who recently has spoken out against EFCA’s card check provision, explains binding arbitration’s danger:

Currently, labor law maintains a careful balance between the rights of businesses, unions and individual employees. While bargaining power differs depending on individual circumstances, the rights of the parties are well balanced. When a union and a business enter negotiations, current law requires that both sides bargain “in good faith.”

In a contract negotiation, each party typically perceives the other as too demanding. But no one loses their right to contract willingly or suffers being forced to agree to anything. Employees can strike if they feel that they have been dealt with unfairly, but it is a costly option. Employers are free to reject labor demands they find to be too difficult to accept, but running a business without experienced employees is itself difficult. Both sides have an incentive to press their demands, but they also have compelling reasons not to press their demands too far. EFCA would disrupt that balance by enabling government-appointed lawyers to decide what they believe is fair or reasonable.

A federally appointed arbitrator cannot be expected to understand the nuances specific to each business dispute, the competitive market position of the business, or the plethora of other factors unique to each case. Yet fundamental decisions on wages and benefit costs, rules for promotions, or even rules for exiting an unprofitable line of business could fall to federal arbitrators under EFCA.

For more on EFCA, see here, here, and here.