The Insidious Nature of Forced Arbitration
Anyone who has signed an agreement to buy a smartphone or lease a car has agreed to a forced arbitration clause. This clause is buried deep within sales contracts, in places where only lawyers typically go. When you agree to one you are basically giving up your right to sue the service provider in court. You have to instead go to private arbitration, where the deck will be heavily stacked in favor of the company.
In this particular case, however, Fox lawyers are arguing that the employment contract Carlson signed forbids her from speaking publicly about the case. Even worse, they are arguing that the case must go to arbitration.
It’s Tough on the Little Guy When it Comes to Forced Arbitration
When we say the decked is stacked against plaintiffs in forced arbitration cases, we’re not exaggerating. In the vast majority of instances, the arbiters deciding disputes – whether between a customer and a company or an employer and an employee – are basically clients of the defendant. The more cases a company brings to an arbiter, the more likely he or she is to rule in that company’s favor.
In a July 14 article in The New York Times reporting on the Carlson case, the paper cited a forced arbitration analysis conducted in 2011 by Cornell University professor Alexander J.S. Colvin.
Colvin studied nearly 4,000 employment-related forced arbitration cases. He found that plaintiffs only won 31 percent of cases when the employer had only one case in front of the arbiter. When an arbiter had multiple cases from the same company, the plaintiffs’ victory rate was less than half that amount.
A Shield for Illegal Behavior?
The Times article focused a searing spotlight on one of the more nefarious aspects of forced arbitration. Many female employees of the clothing company American Apparel sued then-CEO Dov Charney for sexual harassment. However, those cases never made it to court because the women agreed to forced arbitration clauses when signing their employment contracts. One male employee, however, did win the right to have his lawsuit heard in court. He had alleged that Charney not only choked him but also rubbed dirt in his face.
Carlson will no doubt face an uphill fight when it comes to having her day in a court of law. According to the Times article, however, she may have an option. She may be able to argue that her contract states only that she cannot sue Fox – it doesn’t say anything about not being able to sue Ailes. She could also say that her complaint does not focus on her former employee/employer relationship with Ailes.
No matter how this matter turns out, it’s yet another example of how forced arbitration is a terrible mistake that tilts the playing field unfairly toward the employers, service providers, and other entities that use them.