National Labor RelationsBoard in Washington, D.C. Credit: Diego M.Radzinschi/ALM

Employees in low-wage workplaces, women and African-Americansare more likely to be subject to mandatory arbitration agreements in employmentcontracts than are other groups, potentially limiting their accessto the court system, a study released Friday by the Economic PolicyInstitute found.

The survey, authored by Cornell Universityprofessor Alexander Colvin, found that 57.6 percent of femaleworkers, 59.1 percent of African-American workers, and 53.5 percentof male workers are bound by mandatory arbitration agreements.

Nearly 65 percent of workplaces where the average wage is lessthan $13 an hour also require mandatory arbitration agreements fortheir employees.

Colvin's study also found that the existence of such agreementshas risen from affecting just over 2 percent of employees in 1991to nearly 25 percent in the early 2000s, to more than 55 percent ofworkers today. He says this trend reduces employees' access to thecourts for a variety of civil rights and labor rights claims,representing a “dramatic and important shift in how the employmentrights of American workers are enforced,” according to thereport.

Mandatory arbitration agreements are most widespread inCalifornia, Texas, and North Carolina. In all of the 12 largeststates by population, more than 40 percent of employers have thesepolicies, the survey found.

The issue draws significance as the U.S. Supreme Court weighs a trio of cases that challenge whetherclass-action waivers should be allowed in employment contracts.Mandatory arbitration agreements have also found new scrutiny amidthe #MeToo movement, as women speak out against past workplaceabuses and the efforts of employers to keep those issues out ofcourt.

“Under such agreements, workers whose rights are violated—forexample, through employment discrimination or sexualharassment—can't pursue their claims in court but must submit toarbitration procedures, which research shows overwhelmingly favoremployers,” Colvin writes in the report.

The findings build off a 2017 study from the worker-friendlypolicy group that found more than half of private-sector non-unionjobs are subject to mandatory arbitration, a trend the report foundhas accelerated since the 1990s. Among private-sector non-unionworkers, 56.2 percent are subject to mandatory employmentarbitration, which would mean more than 60 million Americanemployees have no recourse to the courts in legal disputes and mustgo to arbitration, the survey found.

Larger employers were more likely to impose such agreements,which are different from the system used to resolve employmentdisputes between labor unions and management in organizedworkplaces. More than 65 percent of employers with 1,000 or moreworkers have mandatory employment arbitration, the study found.

Among the employers that require mandatory arbitration, 30percent include class-action waivers that prevent them from takingcollective legal action, according to the report.

The Supreme Court heard arguments in October in a trio ofcases—National Labor Relations Board v. Murphy Oil USA,Ernst & Young LLP v. Morris, and Epic Systems v.Lewis—that consider whether the class-action waiver violatesthe federal law that protects workers' rights.

Colvin said a ruling in favor of the employers would encouragemore businesses to adopt mandatory employment arbitration and classaction waivers.

The U.S. Chamber of Commerce's amicus brief, filed by a team from Mayer Brown,urged the Supreme Court to uphold the lawfulness of mandatoryarbitration.

“Most workplace grievances are individualized and thereforecould not be pursued as part of a class or collective action.Indeed, without individual arbitration, most of those claims couldnot be pursued at all,” Mayer Brown's Andrew Pincus, counsel ofrecord, wrote. “The best empirical data available show thatemployees fare at least as well in arbitration as in litigation, ifnot better; and that litigation in court is frequently tooexpensive to serve as a realistic option for employees seeking tovindicate their rights.”

From: CorporateCounsel