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Forced Arbitration May Be a Thing of the Past for Some Employees

Posted by Scott M. Peterson | Aug 20, 2014 | 0 Comments

President Obama recently signed an Executive Order entitled “Fair Pay and Safe Workplaces” which, among other things, requires bidders on federal procurement contracts for goods and services (including construction) in excess of $500,000 to disclose labor law violations that have occurred within the three-year period immediately preceding the bid. Notably, the Executive Order also prohibits federal contractors with contracts in excess of $1,000,000 from entering into mandatory pre-dispute arbitration agreements with their employees or independent contractors to resolve complaints under Title VII of the Civil Rights Act (“Title VII”) or tort claims arising out of alleged sexual assault or harassment.

Employees Are Able To Take Discrimination Cases to Court, Rather Than Be Forced to Settle in Arbitration

The language of the Order relating to arbitration is important. Once of the major hurdles for employees of large companies who are subjected to discrimination, harassment, or retaliation is what are known as pre-dispute arbitration agreements. These agreements, which are becoming more and more common, essentially require the employee to arbitrate their claims, rather than take them to court. While this may not seem significant, it is.

Arbitration is, for starters, less expensive for employers. More importantly, however, arbitration takes away the right to a jury trial. In other words, an employee who signs such an agreement gives up her right to have a jury of her peers decide the case. Instead, the case is decided by a single arbitrator, most often an attorney. While this may be helpful in terms of knowledge of the law, we believe strongly that the jury trial system offers a more fair and just opportunity for victims of employment discrimination.

In addition to guaranteeing employees of large federal contractors the right to a jury trial, the Executive Order also requires that federal contractors disclose to the government any violations of numerous laws within a three year period leading up to the bid. This is significant.

The New Executive Order May Also Aid in Information Sharing

When an employee comes to us with a claim of discrimination or harassment in the work place one of the more helpful pieces of information that we can obtain is the history of the employer with respect to similar claims. This information can be difficult to obtain, however, because employers have absolutely no interest in sharing it with a plaintiff. Under the new Executive Order we are hopeful that information disclosed by employers will be subject to the Freedom of Information Act (“FOIA”), and therefore accessible to plaintiffs and their attorneys.

All in all the Executive Order is a helpful step in the right direction for employees who may have been victims of harassment/discrimination/retaliation in the workplace. Given the inherent problems employees face in proceeding with a claim, any movement by the government towards greater protection for employees should be applauded.

  Scott Peterson Scott by Scott Peterson | | Connect with me:

Representing plaintiffs in employment and serious injury matters.

About the Author

Scott M. Peterson

Scott M. Peterson is the founding partner of D'Orazio Peterson, having left a partnership at a large regional law firm to limit his practice and focus on helping people protect their families.


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