Note: A version of this post appeared at my personal blog, Overruled.
Debbie Dantz worked at an Applebees, a job she desperately needed to take care of her two teenage daughters and a terminally ill father. It was not a high paying job, but because Dantz couldn't afford a car or even a bed to sleep on, she needed work within walking distance of her home and the Applebees fit the bill.
So when Dantz' boss made a pass at her, she didn't quit because she needed the money. She stuck with the job as her manager's behavior became increasingly bizarre and cruel. He ordered all the waitresses to wear skirts, and would regularly lift them up and make crude comments as he looked under them. Sometimes, he would order Dantz to sit in a chair while he quietly circled her, staring at her like a predator. When Dantz complained about this treatment, her manager and her male co-workers threw food at her.
One day, when Dantz arrived at work a paper was shoved into her hands and she was ordered to sign it. The paper contained something called a "binding mandatory arbitration agreement" which said that, if Applebees broke the law, Dantz no longer had the right to hold it accountable in court and instead would be shunted into a privatized, biased justice system. Dantz refused to sign, and was told that until she did, she would be paid nothing but tips--a violation of federal minimum wage laws. Nevertheless, Dantz needed her job, so she didn't quit.
After nearly three years of harassment, abuse and long hours for little or no pay, Dantz finally decided that she'd had enough. She filed suit against her employer--and the court kicked her to the curb. Even though Dantz refused to sign the binding arbitration agreement, the court said that merely by continuing to work for Applebees, she was bound by its terms. Debbie Dantz' employer illegally abused her for almost three years, and Dantz was powerless to hold it accountable.
Lest there be any doubt, when Dantz was thrown out of court and relegated to privatized arbitration, her opportunity for justice ended right there. Let's explore a few ways that arbitration differs from real courts:
- Most importantly arbitration is biased in favor of corporate interests. According to a study by Public Citizen which examined almost 20,000 arbitration decisions, the corporate party won a massive 94% of the time. In one case, an arbitrator awarded $11,000 to a debt collector against a woman who owed no money whatsoever, but who had the same name as a woman who did.
- Arbitration is often pay to play. If you bring a suit in federal court, you pay a $350 filing fee, and that's it. Arbitrators, on the other hand, frequently offer an a la carte menu. If you want to file a motion, that's $500. If you want a live hearing, $1500. If you want a written explanation of the arbitrator's ruling, $1500 more. In some cases, consumers have been charged $10,000 or more for the privilege of losing their case before a biased arbitrator.
- Arbitration is secret. Except in California, arbitrators are not required to publicly disclose their decisions. Because they can keep their past history from the public, many arbitration companies market their services to corporations by highlighting their pro-business bias, even as they lobby Congress with claims that they are just as fair and balanced as real live judges.
So in summary, arbitration is expensive; it is secretive, and it is fundamentally unfair. Even worse, it is almost always forced on ordinary Americans. If you have a credit card. Or if you have a job. Or if you have a cell phone. Or if you have a loved one in a nursing home. You have probably been forced to sign an arbitration agreement. Virtually all banks, many employers and some nursing homes will even refuse to do business with you unless you sign away your power to hold them accountable for their actions. If you refuse to sign an arbitration agreement you can lose your credit card, lose your phone service, or even be fired.
The reason why these binding mandatory arbitration agreements are legal is a series of wrongly decided Supreme Court decisions that began in the 1980s. Needless to say, business groups like the Chamber of Commerce are very interested in blocking any legislation which might overturn these wrongful decisions, and they have hired a veritable army of lobbyists to block a bill called the Arbitration Fairness Act, which would prevent companies from coercing their customers and employees into signing away their rights. To be honest, I can't blame them. If I had total immunity from following the law, I would want to preserve my ill-gotten gains as well.
If the business lobby succeeds in blocking the Arbitration Fairness Act, however, it will be a tragedy not just for women like Debbie Dantz, but for thousands of Americans who are victimized by abusive credit card companies, whose loved ones are neglected by nursing homes, or who are fired because their boss doesn't like the color of their skin. People and corporations must be accountable for their actions, they cannot be allowed to hide behind the Supreme Court's mistakes.
Debbie Dantz' story is far too common. It is the story of Lilly Ledbetter, who was tossed to the curb by a Supreme Court more concerned with protecting businesses than preventing pay discrimination. It is the story of James Lind, who lost his ability to work and became disabled after his insurance company suddenly refused to pay for the drug that kept his MS at bay--and who was later tossed out of court because of Supreme Court decisions saying that employer provided health insurers may treat their customers this way with impunity. And it is the story of Bridget Robb, who was electrocuted from the inside by a defective device implanted in her heart, and thrown out of court because of a Supreme Court decision giving lawsuit immunity to the makers of dangerous medical devices.
When judges ignore the law to serve their own deregulatory agenda, people suffer, they lose their jobs, and they even die. The Supreme Court can only ignore the law as long as Congress lets it, however. It is time for Congress to fix the mess the Supreme Court created.
UPDATE: If you are a victim of an abusive arbitration clause, the National Association of Consumer Advocates would like to get in touch with you. You can get in touch with NACA here.