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Arbitration Run Amok

Arbitration Run Amok

Connie Harless worked as a manager at a Wendy’s restaurant.  Connie addressed an episode of sexual harassment in the workplace and reported it up the chain of command.  For simply doing the right thing, she was terminated.

Soon after, Connie sought to vindicate her rights by suing under West Virginia’s human rights law.  But she couldn’t.  Like more and more employees today, she was forced to sign an agreement giving up her litigation rights as a condition of employment.  Instead, all employment disputes had to be resolved by the American Arbitration Association--an organization with a reputation for being business-friendly.

The trial court ruled in Connie’s favor, finding that the arbitration agreement was unconscionable and, therefore, unenforceable.  Unfortunately, by a 5-0 vote, the Supreme Court reversed, remanded, and directed the trial court to send the case to arbitration.

This is by no means a headline-grabbing decision.  In fact, the Supreme Court decided the case by issuing a memorandum opinion rather than a formal, signed opinion.  But what does stand out is Justice Workman’s concurrence.

In some ways, the concurrence is a lament--a recognition that arbitration law has been “federalized” and that state courts have little or no say on the subject.   More than that, the pro-arbitration policy that lies behind this new body of federal law can override important rights, including constitutional rights.  As Justice Workman noted:  “[W]henever we find an arbitration agreement trumps an individual’s right to a jury trial, we are dealing with issues that encompass fundamental rights and liberties.”

Other cherished rights can also be swept away in the floodwaters of federal arbitration law.  Connie’s situation exemplifies this.  Our human rights law provides important protections, and those protections are meant to be guaranteed through the workings of the jury system.  Now, however, those rights “have been marginalized to simple contract terms swept away in a form agreement prepared by a powerful out-of-state corporation.  Indeed, Justice Workman described this case as “a disturbing example of how an average citizen’s right to a jury trial in a civil matter is vanishing before our very eyes.”

But more than a lament, the concurrence in this case is also a battle cry.  Justice Workman urges us--all of us--to lobby Congress to take a stand to halt the floodwaters.  The final paragraph sums it up succinctly:

“We can only hope that decisions, like the one reached herein, appear to Congress as the distress flags that they are, and that Congress will implement better safeguards to the FAA to ensure that the legal rights of unsophisticated employees are protected. Congress should not continue to countenance the practice by which employers take unfair advantage of employees by requiring their consent to arbitrate disputes as a condition of employment.”

Connie deserves justice--not the justice meted out by an arbitrator, but the justice that comes when the community itself speaks through the time-honored jury system.  Countless others find themselves in this exact same situation.  Here’s the reality:  Arbitration clauses are routinely being inserted into almost every kind of contract.  We must respond.  We must heed the call.  We must act.  Otherwise, federal arbitration law will effectively swallow up the rights that truly matter to everyday West Virginians.

Employee Resource Group, LLC v. Harless, No. 16-0493 (W.Va. 4/13/17)(memorandum opinion)

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