"You Can’t Sue, There’s an Arbitration Agreement”: Another Thing the Boss Says That Might Not Be True

The Truth About Arbitration Agreements

According to a 2018 study, two out of three private-sector workers in California were required to submit workplace disputes to private, secret arbitration as a term and condition of their employment. They’ll tell you it’s because arbitration tends to be faster and cheaper than litigation in court. Which is generally true. But the real reason is, arbitration tends to favor employers, who pay the arbitrator and may be repeat customers. Not only do bosses win more often in arbitration, but losses aren’t as 

costly, since arbitrators tend to give workers smaller money awards than judges and juries do. It seems in arbitration, even when bosses lose, they still win. And since arbitration decisions aren’t generally made public, when the boss loses, nobody is likely to find out.

That’s why Congress passed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act,” (“EFAA”), 9 U.S.C. §§ 401-402. Signed into law on March 3, 2022, it prevents employers from forcing workers who’ve been sexually assaulted or harassed on the job into arbitration. Part of the reasoning behind the law was that too many bosses were getting sued for sexual harassment and sexual assault at work, but 

the cases were going to arbitration, where they were hidden from the public. The process allowed the bosses to avoid having to answer to their workers, customers, and the public for bad behavior, no matter how many times it happened. 

The EFAA gives the employee the option to choose arbitration if they want it, but also to void the arbitration agreement and take their case to a public court. The law is so new that its reach and its limits have not yet been fully defined, but a couple of things are coming clear. First, only cases involving harassment, assault, or ongoing retaliation after 

March 3, 2022, are covered under the law. Second, it appears from the wording of the law that not only are the harassment and assault claims entitled to a courtroom trial, but the entire case is kept out of arbitration.

But what if you belong to a union, and your union contract says that all workplace disputes have to go through a grievance and arbitration? Don’t you have to follow the grievance process? Depending on your claims, that might be another mistaken belief.

Past Cases

Certain laws grant specific rights to individual employees. Title VII of the Civil Rights Act and the California Fair Employment and Housing Act, or FEHA, give employees the right to have a workplace safe from harassment and discrimination based on race, religion, sex, sexual orientation, and other characteristics that have historically been targets for discrimination. Because those rights belong to the individual, the union

and employer cannot negotiate them away. 

Way back in 1974, the US Supreme Court decided a case called Alexander v. Gardner-Denver Co., stating that allowing a union to waive the individual’s rights under Title VII “would defeat the paramount congressional purpose behind Title VII.” The Court explained that the union is obligated to do what’s best for most of its members, even if that means sometimes an individual’s best interests must be sacrificed. Title VII was meant to protect the individual’s rights from majority opinion.

In 1997, a California appeals court looked to the Gardner-Denver decision and followed its reasoning under the FEHA, in the case of Torrez v. Consolidated Freightways Corp. Like the Supreme Court in Gardner-Denver, the Torrez court found that the union’s duty to get the best result for most of its members might motivate it to “sacrifice” one member for the good of the majority, and that would defeat the purpose of the FEHA.

Consider the scenario where a worker votes against a union contract specifically because it forces his civil rights into arbitration, but the majority of union members vote to approve the contract. The worker involuntarily would lose his right to sue in court, because his coworkers—who may not be part of a protected group under FEHA or Title VII—didn’t think it was important. The Torrez court decided that was unfair to the 

individual and made the anti-discrimination laws subject to majority approval—which they were meant to protect against. 

For nearly 50 years, Gardner-Denver and Torrez have been quietly defending workers’ right to a fair and public trial under federal and state anti-discrimination law.  Along with the EFAA, they help make important exceptions to arbitration agreements. 

What You Need to Know

If you have faced discrimination, harassment, sexual harassment, or sexual assault on the job, but you’ve been told you can only bring your case through a union grievance procedure or a private arbitration process, you may not be getting the straight story. Contact our talented employment attorneys to find out if you have a right to bring your case in court. We offer a free consultation, where we will listen to your claims and

advise you on your best path forward, including how you can:

• Keep records of harassment and discrimination
• Identify potential witnesses
• Maintain a professional demeanor while dealing with your harasser and management
• Work with your healthcare professional to manage your stress on the job
• Know when to walk away if the stress and harassment become unbearable
• Decide whether you should bring a lawsuit to vindicate your rights
  

Get Help From the Experts at Employee Law Group

Employee Law Group has more than 30 years’ experience in defending workers’ rights, helping them get fair compensation for unlawful abuse in the workplace, and recovering unpaid wages and penalties kept from them by unscrupulous bosses. We would be happy to help you decide what’s best to protect your right to be free from harassment and discrimination on the job.