18 September 2019

Report condemns "unchecked power" in arbitration

Over 80 percent of private-sector US employees will be forced into arbitration with their employers by 2024, a new report predicts.

By Dr David Cowan


The report, by the Economic Policy Institute and the Center for Popular Democracy, suggests workers  are “at the mercy” of arbitrators, with statistics showing that arbitrators side with companies more than 90 percent of the time.

Critical report

The report coincides with the Supreme Court Epic Systems v. Lewis decision, which the report argues would let employers strip workers of their right to join together in court to fight wage theft, discrimination or harassment. The report, “Unchecked Corporate Power: Forced Arbitration, The Enforcement Crisis, And How Workers Are Fighting Back,” projects the Epic Systems case is spurring corporations to dramatically increase their use of forced arbitration clauses. The argue soon only a small minority of American workers will be able to sue their employers. The report argues this trend makes it critical that public enforcement agencies have the resources they need to ensure that employers respect important worker protections like minimum wage, earned sick and family leave, fair workweek standards, and protections against discrimination and harassment. The report identifies the “whistleblower enforcement” model as the most promising state-level solution to the corporate accountability crisis. Bills introduced in six states in 2019—Massachusetts, Maine, New York, Oregon, Vermont, and Washington—would empower workers to sue law-breaking employers on behalf of the state and all injured workers, including those covered by arbitration clauses.

“Flawed decision”

Report authors Kate Hamaji and Rachel Deutsch of the center and Celine McNicholas, Heidi Shierholz, and Margaret Poydock of EPI start with analysis of historical and current state-level funding by the National Employment Law Project. It finds the number of covered workers per federal wage-and-hour investigator and health and safety officer has more than doubled since 1994, to over 170,000 workers for each agency staffer. In six states profiled in the report, the number of workers per investigator range from 54,900 to 188,800. The report calls on Congress to override Epic Systems and restore the fundamental rights of working people to enforce their rights by passing the Restoring Justice for Workers Act and the Forced Arbitration Repeal Act. “Congress must act to overturn the Supreme Court’s deeply flawed Epic Systems decision, which makes it nearly impossible for millions of workers to get justice when their employers violate fundamental workplace protections,” said Ms McNicholas, EPI’s director of government affairs. The reprot can be found here.

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