Halliburton Victim Twice Over

Today, Jamie Leigh Jones will appear before the House Judiciary

Committee and tell how she was gang raped by her co-workers in Iraq

while working for a Halliburton subsidiary called KBR. Afterwards, her

assaulters confined her to a shipping container and warned that if she

left Iraq for medical treatment, she’d be fired. That’s where she was

found by agents sent by the U.S. embassy to rescue her — after her

father called their congressman, Representative Ted Poe (R-Texas).

Now, Jamie Leigh Jones has been victimized twice over. Because

KBR/Halliburton requires employees to sign contracts containing a

binding mandatory arbitration (BMA) in the fine print, Jones is being

denied her constitutional right to bring her perpetrators before a jury

and be heard.

But Jamie Leigh Jones will be heard by Congress today — and then,

lawmakers should waste no time in re-opening the doors of justice for

Jones and the rest of us. It’s time to ban binding mandatory

arbitration in employment and consumer contracts once and for all.

There may be no other device being used today by Halliburton and other

corporate giants that does more to systematically deny rights to

workers and consumers.

Congress is beginning to focus.

Last Wednesday, the Senate Judiciary Subcommittee on the Constitution held a hearing on the Arbitration Fairness Act

— a bill that would ban most forms of binding mandatory arbitration

introduced in the House by Rep. Hank Johnson (D-Ga.) and in the Senate

by Sen. Russ Feingold (D-Wis.).

Senator Brownback called it a “where the rubber meets the road hearing.”  He could not have been more right.  While

witnesses for the bill showed real-world harms from the system of

biased, privatized justice that many companies force on their customers

and employees, opponents offered scarecrow arguments crafted with

cherry-picked data from out-dated studies.  Still, it was impossible to ignore at least one hard fact: binding mandatory arbitration ruins lives.

Senator Feingold, chair of the subcommittee and original sponsor of

the bill in question, noted the grievous case of Jamie Leigh Jones.

Also, there is Fonza Luke,

a grandmother from Alabama, who made the trip to tell Congress about

how her employer surprisingly fired her after thirty years of exemplary

service, how the United States Equal Employment Opportunity Commission

(EEOC) concluded that the decision resulted from race and age

discrimination, and how she was then barred from taking her employer to

court. Instead, Mrs. Luke was forced into arbitration, where the

arbitrator refused to let her present evidence of discrimination — or

even evidence of the EEOC decision.

Mrs. Luke lost in arbitration — after she lost her job, her civil rights, and access to the civil justice system.

Unbelievably, she was forced into arbitration because her employer

unilaterally added a binding mandatory arbitration clause to her

employment contract. Mrs. Luke refused to sign the binding mandatory

arbitration clause twice, thinking it seemed unfair. But a court ruled

that she had agreed to the new contract because she didn’t quit her

job. As a result, an arbitrator decided her fate with no accountability.

Now that people who have been victimized by binding mandatory

arbitration like Ms. Jones and Mrs. Luke are coming forward, it’s

becoming increasingly difficult for big business to assert that binding

mandatory arbitration is good for consumers. If you read the live blogging of the hearing done by the Consumerist, you’ll see that the more BMA proponents are asked to explain it, the more laughable their defense becomes.

Take one of the corporate flacks on the panel,

Mr. de Barnardo, who argued that we should force people to “agree” to

arbitration well before they even have a problem — because most lawyers

will advise against mandatory (read: forced) arbitration. Huh? Even

Senator Brownback was puzzled. He asked why so few lawyers would

recommend arbitration over a public trial. Mr. de Barnardo did not

answer that question, but instead made a shocking admission: he would

not recommend mandatory arbitration to his clients either.

Witness Paul Bland, a Public Justice staff attorney, provided a succinct retort:  “It is a grim idea that the only way to have arbitration is to make it mandatory.”

Indeed. No one in an unequal bargaining position – neither a

business nor a consumer – would choose the secret system of

arbitration, in front of an arbitrator chosen by the other side, where

there is no accountability.

Bloomberg commentator Susan Antilla also honed in on businesses’

double standard, pointing out that although businesses say they favor

mandatory arbitration because it is simple and inexpensive, they choose

courts, not arbitration, when they are up against other businesses.

Apparently, arbitration is simple and inexpensive only when they know

they are going to win — against, say, an employee.

Professor Alderman, an experienced and respected consumer law expert

from the University of Houston, reminded the panel that auto dealers

recently won legislation to prevent car manufacturers from locking them

into arbitration. They argued that they were being taken advantage of

and wanted more accountability. Well, then, why don’t the dealers’

customers deserve the same protection?

Clearly failing to make the case for forced arbitration, Mr. de

Barnardo began crying wolf that banning pre-dispute arbitration would

be a “death sentence” for the whole alternative dispute resolution

system in America. Bland called this ludicrous. The Arbitration

Fairness Act does nothing to prevent voluntary alternative dispute

resolution, which has been around for decades. But forced arbitration

is a fairly new phenomenon, having spread like kudzu in the past dozen

years, choking off centuries of common law and the constitutional right

to the civil courts. Bland noted that in 1995, very few credit card

companies used mandatory arbitration and, in 2000, the clauses were

rare among car dealers, but now nearly all use it.

Even Senator Brownback seemed sympathetic in the hearing. A

self-proclaimed “fence law expert” from Kansas, Brownback was

particularly intrigued by Professor Alderman’s point about how the law

is frozen by mandatory arbitration. Alderman pointed out that judges

adapt the law over time in response to changes in the world and

observations about how the law functions. By taking thousands of cases

out of the courts, arbitration stymies this process, freezing the law

at an arbitrary point in time regardless of whether the courts might be

inclined to improve it.

Struggling to find a sound justification for opposing the bill,

Senator Brownback said he supports binding mandatory arbitration

because it provides increased access to justice. Feingold succinctly

responded that “access” implies choice, and providing “access” to

binding mandatory arbitration is like giving criminals “access” to

prison.

So now that we’ve had a slam-dunk hearing and even the oftentimes business-friendly publications like Bloomberg and Condé Nast are calling foul on the predatory practice of privatizing justice, how close are we to banning it?

Not close enough.

It is going to take more than a few damning hearings and articles to

win this one. Big business will not give up its immunity from

accountability without a tough fight. The Chamber of Commerce and their

buddies, the National Manufacturer’s Association, American Banker’s

Association and others like AT&T, have put together a “Coalition to

Preserve Arbitration.”

These groups are already attempting to label this effort a “trial lawyer” campaign,

but they won’t get very far with that ruse. Certainly the plaintiffs’

bar has always advocated for Americans to have access to courts. But

this legislation is not a boon for trial attorneys, as the big

corporations would have you think. This is a real distraction from the

undeniable truth that ALL employees and consumers will benefit when

they no longer are forced into a rigged system and are freed to pursue

their constitutional rights.

An entirely different sort of groups have come together to fight

this secret system of lopsided justice – groups known for defending

consumer and civil rights. More than 36 concerned organizations

from the Leadership Conference on Civil Rights to Consumers Union and

the Center for Responsible Lending recently called on members of

Congress to pass the Arbitration Fairness Act.

This may be a battle of people over outrageous profits and power,

but it is not a left/right, partisan fight. Binding mandatory

arbitration can hurt virtually anyone, regardless of personal politics.

A large number of goods and services are becoming increasingly

difficult to obtain without “agreeing” to arbitration in advance — bank

accounts, credit cards, cell phones, and the like. The Arbitration

Fairness Act has several Republican cosponsors — including Jamie Leigh

Jones’ Congressman, Representative Poe.

Make no mistake, this is a real struggle and big business is not

likely to lie down and roll over. The sub-prime mortgage industry, Wall

Street, and huge employers have been very successful in mandatory

arbitration to stop consumers and employees from holding them

accountable in court. Recent scandals, including that surrounding Jaime

Leigh Jones and Halliburton, could supply the momentum for lawmakers to

act quickly and decisively to protect the public as they have in the

past after Watergate and Enron. But it will take all of us standing up for ourselves and others, and refusing to be bullied any longer.

Angela

Canterbury, advocacy director for Public Citizen’s Congress Watch

Division, submitted this post as a guest blogger for The Hill.

Originally posted on The Hill’s Congress Blog.