It’s Time We Work Against Forced Arbitration Agreements – Here’s Why

When you’re signing up for your first job, it is exciting to earn a salary to meet all your expenses. It’s a new experience and it’s natural to think that you need to finish the paperwork and enjoy your newfound independence. However, it’s not the case always, because most people fall victim to workplace disasters and harassment.

It is stressful to work in a hostile environment where you feel helpless and without any support. If you are someone lucky to not have experienced this sort of harassment, you might wonder what could cause it. The answer is simple, it is private arbitration and agreements that bind employees to it.

Forced Arbitration in the Workplace

Many companies have the tradition of making employees sign an arbitration agreement when they join. This prevents the employees from suing the company for any illegal or inhuman practices. Instead, the employee will have to go through a private arbitration process as per the contract. It is not unusual for companies to expect the employees to resolve their legal complaints in private and secret forums. This offers companies a means of escape from publicity and liability for acts of gross misconduct, like harassment, discrimination, or even wage theft.

These are serious matters and the employee has no way to seek justice if they sign a private arbitration agreement. According to research, over 80% of the Fortune 100 companies practice this arbitration agreement in their workplace. Thus creating a private justice system where companies are free from public scrutiny.

The Process of Forced Arbitration

Over 60 million employees have given up their right to take legal action against their company in a public court. That’s because they have signed the forced arbitration agreement. This is also known as mandatory arbitration and it forbids employees from bringing whatever case they may have before a judge in public courtrooms.

A private third-party arbitrator takes up legal complains and is supposedly neutral. Some companies argue that forced arbitration makes the process is faster and efficient for all involved parties. The reality is that it is actually a way of handling ugly matters in secret and away from the public.

The Reality of Forced Arbitration

According to a survey in  2017, over 60 million employees and nonunionized private jobs have signed forced arbitration agreements. By 2024, four out of five employees will have signed the forced arbitration agreements. This is happening because companies know that employees are less likely to win in private arbitration than in a public courtroom. What’s more, only a small fraction of funds are recovered through the court.

If you are wondering why workers agree to this, the reason is simple, most employes do not know that they’re forgoing their right to sue the company. They sign the agreement terms in an attempt to get the job. This agreement is usually part of a stack of documents and is simply a small paragraph buried in the fine print. Even if they realize that they have signed such an agreement, they do not understand the impact and significance of it.

Other Agreements That Bind the Employee

Employees are made to sign non-disclosure agreements at the time of employment. Similarly, they sign nondisclosure and confidentiality agreements even during the arbitration. This is an attempt to silence them about any of the proceedings or the underlying incidents.

In the rare instance where an employee wins an arbitration case, they face the risk of losing the settlement sum if they disclose the details of the arbitration. This means the instances that led to arbitration will continue to exist as the company does not face accountability for its actions. The fact that there’s no public scrutiny makes it possible for the companies to have their way with the employees.

What you can do to fight this unfairness is to act during the time companies give you while signing a new agreement. You can try to negotiate out of this forced arbitration agreement with your employer. However, most companies do not offer an option to not sign this agreement.  Alternatively, you can demand change through organized community action. Thus pushing back companies who use forced arbitration. Gather a support system and help create a sweeping change. Remember, the change begins with you!