An overwhelming majority of America’s private-sector workers in the next five years will have to undergo forced arbitrations to air their complaints, according to a new report.
By 2024, almost 83% or 95 million of the country’s private, non-unionized employees will be hashing out complaints like unfair pay and on-the-job mistreatment behind closed doors, according to estimates from the Economic Policy Institute and the Center for Popular Democracy released this week. That’s up from 56% or 60 million workers in 2017.
One of the EPI report’s authors, Heidi Shierholz, told MarketWatch her estimate was conservative. Companies view arbitrations in their financial best interest, said Shierholz, senior economist and director of policy at the Economic Policy Institute, a Washington, D.C.-based left-leaning think tank.
Critics say forced arbitrations can close off workers from judges and juries, and confine decisions to arbitrators who might go easy on the companies.
There were over 155 million public, private and self-employed workers on average last year, Bureau of Labor Statistics show. Of that sum, more than 111 million were working in the private sector and not unionized, a spokeswoman said.
Many arbitrations are supposed to be private, but controversies over the practice have become increasingly public — chiefly with the #MeToo movement in recent years showing how company arbitrations have kept sexual-harassment accusations quiet.
Critics say forced arbitrations can close off workers from judges and juries, and confine decisions to arbitrators who might go easy on the companies paying for their services. A 5-4 decision Supreme Court decision last May in the case “Epic Systems Corp v. Lewis” upheld mandatory arbitration agreement, which make workers give up their class-action rights.
Don’t miss: In the age of #MeToo, what men should NOT do when working closely with female colleagues
When worker complaints surface “it’s in an employer’s best interest to have those disputes dealt with in the situation they totally control and favorable to their outcome,” she said.
Arbitration itself isn’t the problem, Shierholz noted. The problem is when it’s mandatory and the rules are controlled by the company, she said, adding, “It’s a kind of a rigged system.” Shierholz noted her calculations didn’t even account for the likely uptick in arbitration clauses after the recent Supreme Court case decision.
But just because the Supreme Court has cleared the way for forced arbitration, it doesn’t necessarily guarantee all companies will use it.
In November, Google workers walked off the job for several hours to protest the use of mandatory arbitration on sexual-harassment claims.
One attorney representing large companies in workplace lawsuits previously told MarketWatch that corporate boardroom and C-Suite executives don’t just rush into the use of mandatory arbitrations. The tactic could possibly depress morale and make workers look elsewhere — a worry for companies operating in a tight, competitive labor market.
Consider what happened with Google GOOG, -1.28% In November, the tech giant’s workers walked off the job for several hours to protest the use of mandatory arbitration on sexual-harassment claims. Soon after, Google said it would stop using mandatory arbitration for sexual-harassment complaints. In February, the company went a step further saying it would stop using forced arbitrations for all sorts of employee disputes.
But Shierholz said such developments could be the exception to the rule. “Companies have voted with their feet already,” she said. Worries about worker morale are “not their primary concern. Their primary concern is making sure money flows to corporate executives and people at the top.”
Add Comment