Mandatory Arbitration Threatens Civil Rights

May 1, 2002

Statement of NOW President Kim Gandy

The National Organization for Women urges Congress to reverse a dangerous trend that threatens to set back more than 35 years of employment gains. It's called mandatory arbitration, and it's an insidiously effective way for employers to evade their responsibilities.

NOW strongly supports Senator Feingold, Senator Kennedy and their colleagues, in their determination to ensure that employees cannot be coerced into giving up their rights or their ability to enforce those rights in court. On behalf of NOW's more than half-million contributing members across the country, I urge the Senate to quickly pass the Preservation of Civil Rights Protections Act, and the House to follow suit. Introduced today, this bill will ensure that every arbitration of civil rights claims is the result of a knowing and voluntary agreement — not a coercive contract based on fear or intimidation.

After Anita Hill raised the nation's consciousness about sexual harassment, NOW fought for the Civil Rights Act of 1991, which gave women the right to a jury trial and money damages in employment discrimination cases under Title VII of the 1964 Civil Rights Act. In addition to providing back pay and related compensation, the 1991 act also allows women to receive a limited amount of punitive damages as a deterrent to employers.

Yet, a decade later, those hard-won rights are threatened by a court decisions permitting employers to require arbitration of employment claims. Most are not voluntary agreements – instead, signing is required as a condition for obtaining employment, or continuing in your existing employment. Touted as a low-cost alternative to litigation, we've seen that mandatory arbitration systems are usually stacked against the employee. Some don't allow employees to have their own attorneys at the arbitration proceedings; others give employers the sole right to choose the arbitrators. Many companies don't allow the employee to subpoena relevant documents and other evidence prior to the hearing. Where's the fairness in any of this? Keep looking, because it's not there.

Under this system, employees are likely to face a panel of arbitrators with no experience, interest or expertise in equal employment laws, and who are biased toward the companies that will continue to provide them with cases. They are less likely to be fully compensated for the damage they've suffered or to be reimbursed their attorneys fees and costs of the arbitration. And as the report released today by Public Citizen shows, employees often face arbitration fees that are many times what a court's fees would be, sometimes forcing employees to pay out more than the money damages they are eventually awarded. What's more, the employees have no ability to appeal the outcome of the arbitration, except in rare cases of extreme legal error.

If arbitration truly is faster, cheaper and better than the judicial system, then employees will opt for arbitration in a voluntary system. NOW's challenge to the Congress is this: affirm your commitment to this country's equal employment opportunity laws; open the doors for those who are locked out of our courts, and restore their right to make their cases before an impartial judge and a jury of their peers.

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