A recent article in Slate highlighted an important but little noticed executive order signed by President Obama on the last day of July. According to the online magazine, the “Fair Play and Safe Workplaces” order, as it is formally known, “requires companies bidding for federal contracts worth more than $500,000 to make previous violations of labor law public, if they have any to report.” A less well-publicized, but potentially further-reaching, provision “says that companies with federal contracts worth more than $1 million can no longer force their employees out of court, and into arbitration, to settle accusations of workplace discrimination.”
As the article goes on to note, arbitration clauses buried deep in the fine print have been spreading widely since a Supreme Court ruling (focused on cellphone contracts) upheld them in 2011. The result has been a loss of court access for many Americans. This trend reached both absurd and frightening proportions earlier this summer when food giant General Mills tried to contend that by ‘liking’ any one of its many products on Facebook or other social media sites, or simply by purchasing an item, customers would surrender the right to sue the company ever, over anything.
General Mills later retreated in the face of a storm of public criticism, but the incident highlighted a trend in corporate America that is little-noticed but deeply disturbing: efforts to use ‘terms of service’ to force ordinary Americans to surrender our constitutional right to a trial by jury, as guaranteed by the 7th Amendment. Slate, citing figures compiled by the watchdog group Public Citizen, notes that since that 2011 Supreme Court decision “at least 139 class action suits have died” including cases “brought by consumers who said they’d been stung by predatory lenders, or misleading mortgages, or false promises by vocational schools. And also on the line are complaints by employees of discrimination on the job.”
Why are companies so eager to avoid a real courtroom in favor of arbitration? Because, as Slate lays out, in arbitration the table is tilted in the management’s direction: “a study of 4,000 arbitration cases found that employees complaining of on-the-job discrimination won only about 21 percent of the time. In court, they win discrimination suits 50 to 60 percent of the time, other studies show, and receive damage awards that are five times higher, on average.”
In my practice as an attorney here in Portland I have always focused on court access – a basic right without which many of our other rights as Americans can be rendered meaningless. In the world of federal contracting $1 million is a comparatively small sum – meaning that many, perhaps most, workers on federal contracts are already enjoying the protections put in place by the president’s executive order. Companies may hate it, but the “Fair Play and Safe Workplaces” order promises to be a powerful new tool for ordinary Americans seeking to protect their rights.
Slate: Obama is on a Pro-Labor Roll