Overruled


Why I Blog
February 6, 2009, 1:27 pm
Filed under: Ian | Tags: ,

Debbie Dantz worked at an Applebees, a job she desperately needed to take care of her two teenage daughters and a terminally ill father. It was not a high paying job, but because Dantz couldn’t afford a car or even a bed to sleep on, she needed work within walking distance of her home and the Applebees fit the bill.

So when Dantz’ boss made a pass at her, she didn’t quit because she needed the money. She stuck with the job as her manager’s behavior became increasingly bizarre and cruel. He ordered all the waitresses to wear skirts, and would regularly lift them up and make crude comments as he looked under them. Sometimes, he would order Dantz to sit in a chair while he quietly circled her, staring at her like a predator. When Dantz complained about this treatment, her manager and her male co-workers threw food at her.

One day, when Dantz arrived at work a paper was shoved into her hands and she was ordered to sign it. The paper contained something called a “binding mandatory arbitration agreement” which said that, if Applebees broke the law, Dantz no longer had the right to hold it accountable in court and instead would be shunted into a privatized, biased justice system. Dantz refused to sign, and was told that until she did, she would be paid nothing but tips—a violation of federal minimum wage laws. Nevertheless, Dantz needed her job, so she didn’t quit.

After nearly three years of harassment, abuse and long hours for little or no pay, Dantz finally decided that she’d had enough. She filed suit against her employer—and the court kicked her to the curb. Even though Dantz refused to sign the binding arbitration agreement, the court said that merely by continuing to work for Applebees, she was bound by its terms. Debbie Dantz’ employer illegally abused her for almost three years, and Dantz was powerless to hold it accountable.

Lest there be any doubt, when Dantz was thrown out of court and relegated to privatized arbitration, her opportunity for justice ended right there. Let’s explore a few ways that arbitration differs from real courts:

  • Most importantly arbitration is biased in favor of corporate interests. According to a study by Public Citizen which examined almost 20,000 arbitration decisions, the corporate party won a massive 94% of the time. In one case, an arbitrator awarded $11,000 to a debt collector against a woman who owed no money whatsoever, but who had the same name as a woman who did.
  • Arbitration is often pay to play. If you bring a suit in federal court, you pay a $350 filing fee, and that’s it. Arbitrators, on the other hand, frequently offer an a la carte menu. If you want to file a motion, that’s $500. If you want a live hearing, $1500. If you want a written explanation of the arbitrator’s ruling, $1500 more. In some cases, consumers have been charged $10,000 or more for the privilege of losing their case before a biased arbitrator.
  • Arbitration is secret. Except in California, arbitrators are not required to publicly disclose their decisions. Because they can keep their past history from the public, many arbitration companies market their services to corporations by highlighting their pro-business bias, even as they lobby Congress with claims that they are just as fair and balanced as real live judges.

So in summary, arbitration is expensive; it is secretive, and it is fundamentally unfair. Even worse, it is almost always forced on ordinary Americans. If you have a credit card.  Or if you have a job.  Or if you have a cell phone.  Or if you have a loved one in a nursing home. You have probably been forced to sign an arbitration agreement. Virtually all banks, many employers and some nursing homes will even refuse to do business with you unless you sign away your power to hold them accountable for their actions. If you refuse to sign an arbitration agreement you can lose your credit card, lose your phone service, or even be fired.

The reason why these binding mandatory arbitration agreements are legal is a series of wrongly decided Supreme Court decisions that began in the 1980s.  Needless to say, business groups like the Chamber of Commerce are very interested in blocking any legislation which might overturn these wrongful decisions, and they have hired a veritable army of lobbyists to block a bill called the Arbitration Fairness Act, which would prevent companies from coercing their customers and employees into signing away their rights. To be honest, I can’t blame them. If I had total immunity from following the law, I would want to preserve my ill-gotten gains as well.

If the business lobby succeeds in blocking the Arbitration Fairness Act, however, it will be a tragedy not just for women like Debbie Dantz, but for thousands of Americans who are victimized by abusive credit card companies, whose loved ones are neglected by nursing homes, or who are fired because their boss doesn’t like the color of their skin. People and corporations must be accountable for their actions, they cannot be allowed to hide behind the Supreme Court’s mistakes.

Which brings me to the title of this blog post. I started Overruled because Debbie Dantz’ story is far too common. It is the story of Lilly Ledbetter, who was tossed to the curb by a Supreme Court more concerned with protecting businesses than preventing pay discrimination. It is the story of James Lind, who lost his ability to work and became disabled after his insurance company suddenly refused to pay for the drug that kept his MS at bay—and who was later tossed out of court because of Supreme Court decisions saying that employer provided health insurers may treat their customers this way with impunity. And it is the story of Bridget Robb, who was electrocuted from the inside by a defective device implanted in her heart, and thrown out of court because of a Supreme Court decision giving lawsuit immunity to the makers of dangerous medical devices.

When judges ignore the law to serve their own deregulatory agenda, people suffer, they lose their jobs, and they even die. I hope my venture into the blogosphere can do something to keep this from happening.

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14 Comments so far
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[…] Lilly Ledbetter, both employees whose employment cases were sacked by federal courts, Ian Millhiser says he has created overruled to expose the “far too common” stories of workers who have seen their rights hindered […]

Pingback by ACS's Blogfather Launches 'Overruled' - American Constitution Society

Thanks very much for posting this information – very well done! People need to start getting outraged by this issue and calling their Senators and Congressmen to demand legislative relief.

In 2007, I personally lost my career and a fortune when I sued my former employer for breach of contract and fraud with the arbitration company, JAMS. Even though I brought the suit and had a TON of evidence in my favor, my former employer lied both in deposition and in front of the arbitrator. He then had his employees come in and corroborate his story. The arbitrator believed his side over mine and ordered me to pay both his legal fees in addition to my own. It was a devastating blow from which I may never recover. And all perfectly legal. During the course of the arbitration I found out that there were a long string of other former employees who had similar experiences with him – all kept secret by the arbitration process. It’s a cozy relationship for him and others like him – and a travesty of justice.

Get angry everyone! And let’s get this loophole closed.

Ehren Bragg
http://www.arbitrationhorrorstories.com

Comment by ebragg

[…] 10, 2009 I may write more on this at a later date, but this post at Overruled deserves a link. Arbitration too often functions as a form of private justice which, in a society […]

Pingback by Private Justice « Probatio Pennae


Your post revelas your complete lack of knowledge about arbitration in the employment context. There is not room here to correct the errors in your misguided post and it seems that since you are shilling for the ironically named Arbitration Fairness Act, you have little interest in facts. The truth of the matter is that employment litigation in the courts is a form of welfare that benefits only plaintiffs’ lawyers. The reason so many claims fail in arbitration is that arbitrators are trained lawyers who know the law, unlike juries who assume companies can afford to part with millions of dollars without any ill effect. That’s right – 99% of employment discrimination claims are completely meritless. If the facts above are accurate, they are the exception not the rule. Who do you think ends up paying the bill for all this litigation – you do when your Applebee’s Riblets cost a few bucks more. Your kind of short-sighted childish world view is particularly inappropriate in these difficult times, but it goes a long way to explaining how we got here.

Comment by John Galt

Ian,

What an excellent blog! I represented Debbie, who has since become one of my best friends. The lack of control over her own rights was as big an injustice as the torment her workplace put her through. Bravo for your insight and interest. Please, everyone, contact your representatives in Congress to see that the Arbitration Fairness Act is sponsored and passed. It is up for sponsorship this week. Thanks, again, Ian, from both Debbie and me.

Christy Bishop, Esq.

Comment by Christy Bishop

[…] | Tags: binding mandatory arbitration, ledbetter I’ve blogged before about how companies trap or trick their customers and employees into signing away their power to hold the company accou….  Because of a series of wrongful-decided Supreme Court decisions that rewrote a 60 year-old law […]

Pingback by Preventing The Next Lilly Ledbetter « Overruled

It’s hard to believe a woman could be sexually and emotionally harassed like that in today’s world. Thanks for posting this.

Comment by maryrestaino

Hi all, My English isn’t well but I’m trying to read.
I’ll come again. bye 🙂

Comment by anontanan

[…] How About Some Sexual Harassment With Your Mozzarella Sticks? […]

Pingback by How About Some Sexual Harassment With Your Mozzarella Sticks? | Web News Directory

This is to John Galt (who sounds like a relic of Ayn Rand’s deflated objectivisim)?

Forced arbitration is simply wrong and violates the U.S. Constitution. Arbitrators are generally re-used by a company if they find for the company; there are no rules of discovery, no other court protections that exist in a regular court. It is a controlled, biased environment.

Your unsupported claims that 99 percent of employment claims are “meritless” is wrong; only 2 percent of any tort claims will ever get to a jury. If they are meritless, they are thrown out beforehand. If they are not, they often settle. Only 2% go to trial. Check out the US Bureau of Labor Statistics.

Further, lawyers who prosecute and protect their clients’ rights in court also do so at arbitration, so your comments about lawyers are also ad hominem and unsupported. These lawyers’ jobs are often thankless, and that is why they are called “private attorneys general” by the Supreme Court.

The problem with mandatory arbitration is that it is unfair — why have so many employers spent so many billions lobbying for it if it did not benefit them?

FYI Dantz’s clains were not just harassment but also FLSA (stolen pay) and retaliation. The harassment claims were simply the most egregious.

The Act will pass, and your comments, attitudes, and unsupported judgments will be buried much like Rand has been. I hope after learning about the facts your opinion can change to one closer to the actual reality. Some day, you yourself may benefit from the Act.

Christy Bishop

Comment by Christy Bishop

[…] I have blogged about at length, one of the credit card industry’s most abusive practices is the use of binding mandatory […]

Pingback by Banks Spend TARP Funds on Anti-Consumer Lobbying Campaign « Overruled

[…] also highlights the importance of one issue in particular, binding mandatory arbitration. As I have blogged about in the past, one of the credit card industry’s most abusive practices is the use of binding mandatory […]

Pingback by PoliTrix » Blog Archive » Ian Millhiser: It’s Not Just EFCA: Banks Spend TARP Funds on Anti-Consumer Lobbying

[…] Public Justice/Private Justice 2009 February 19 tags: Arbitration, Law, Private Justice by Christopher Marlin-Warfield I said a while ago that I’d follow up on this post at Overruled. […]

Pingback by Public Justice/Private Justice « Probatio Pennae

[…] As a lobbyist for the Chamber, Gitenstein apparently lobbied in support of the Chamber’s position on binding mandatory arbitration, an abusive practice—supported by the Chamber—which gives businesses an effective veto power over laws they do not want to follow. […]

Pingback by PoliTrix » Blog Archive » Ian Millhiser: Former Business Lobbyist Denied Important DOJ Role




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