Power Is Flowing Away From Individuals

Monday, April 29, 2019


Age discrimination: A couple of changes from court decisions indicate that the long-running flow of power from individuals to businesses is continuing. Some years ago, federal courts made it more difficult to win age discrimination lawsuits against an employer. In a 2017 decision, the Supreme Court held that the Age Discrimination in Employment Act (ADEA) protected only existing employees of a business, not job applicants. That greatly expanded the scope of exceptions the ADEA did not cover. When originally passed in 1967, the ADEA was supposed to protect all persons over 40 years of age. In general, the courts now tend to defer to employers, making winning an age-discrimination lawsuit a rare event. Despite the ADEA, age discrimination is in employment common. And even when the discrimination is blatant, it is usually impossible to win a lawsuit.

Class arbitration lawsuits: Earlier this month, the Supreme Court ruled in Lamps Plus, Inc. v. Varela that employees cannot file a class arbitration lawsuit against an employer who has harmed a group of employees. To be susceptible to such a lawsuit, the company must agree in writing in advance to accept such a lawsuit. The implications of that lawsuit are clear. Probably no employer has ever expressly consented in writing to any class arbitration lawsuit. And in the future, the few exceptions that may exist to that will make sure their employee agreements will remove that clause from the agreement. There are probably no exceptions.

Arbitration: The Lamps Plus lawsuit highlights the matter of forced arbitration. Forced arbitration clauses are the norm for employee agreements, credit card agreements, service agreements and essentially everything that can come under the scope of arbitration, which is essentially everything. Forced arbitration has been dominant for decades. Very few consumers and employees have the individual power to avoid forced arbitration. Arbitration clauses invariably include a requirement that decisions are to remain confidential.

The net effect of forced arbitration is a massive shift of power to companies and wealthy individuals. Companies and individuals, e.g., Trump and Trump companies, can and do act badly and if caught, they use arbitration to shield their bad acts in secrecy. The public is kept in the dark and fed nothing. In Lamps Plus, the Supreme Court argued that while arbitration has procedural advantages, which is arguably mostly a lie for consumers and employees most of the time, those advantages are absent from class lawsuits and that creates a potential for “procedural morass.”

The massive power advantage that forced arbitration affords companies and wealthy individuals and the secrecy that shields the underlying bad and illegal actions and settlements, constitutes a shadow system of law that sometimes operates outside the law without any means for society to know. For example, when a company or wealthy person has injured many people and one of them is forced into arbitration and a secret settlement arises, other injured people may never know of their injury or the amount of money the company paid. Essentially all advantage goes to the company or wealthy person.

From my point of view, forced arbitration constitutes a major assault on the rule of law. In essence, one can see forced arbitration as a powerful anti-democratic, authoritarian tool to keep the masses ignorant and in check, while the rich and powerful remain free to continue their bad and illegal acts with impunity most or nearly all of the time.

Orig B&B: 4/29/19