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.
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
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
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.
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.