The February 19, 2021, episode of CounterSpin brought together archival interviews from Celine McNicholas, Joanne Doroshow and Kate Bronfenbrenner on forced arbitration and the NLRB. This is a lightly edited transcript.
Janine Jackson: Welcome to CounterSpin, your weekly look behind the headlines. I’m Janine Jackson. This week on CounterSpin: One of the more hopeful things you might not have heard about is the revival in the House of Representatives of the Forced Arbitration Injustice Repeal (or FAIR) Act that would ban those ubiquitous small-print “agreements” that annul critical worker and consumer rights, like the ability to bring class action lawsuits. Prominent proponents include Google employees and former Fox News anchor Gretchen Carlson; but as bill sponsor Hank Johnson of Georgia explained, it’s really about narrowing the “massive power differential between soulless corporations and individuals just trying to get by.”
We’ll get some background on forced arbitration and why it matters from previous CounterSpin conversations with Celine McNicholas from the Economic Policy Institute and Joanne Doroshow from the Center for Justice and Democracy.
An important if hidden engine of the corporate corrosion of worker/consumer rights has been the National Labor Relations Board, the federal enforcer of labor law. It seems like change is afoot there: Biden apparently called for the resignation of the Board’s general counsel, famously anti-union Peter Robb, 23 minutes after becoming president. He fired Rob when he refused to resign. And then Biden fired the next Trump appointee who took the job. We talked about the Trump-era NLRB while it was happening with Cornell University’s Kate Bronfrenbrenner. We’ll hear part of that conversation today.
That’s all coming up on CounterSpin, brought to you each week by the media watch group FAIR.
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Janine Jackson: The press release for a 2019 report from the Economic Policy Institute and the Center for Popular Democracy included a straightforward quote from Oregon college student Brenda Rojas:
While working at Buffalo Wild Wings, my coworkers and I experienced wage theft regularly, and worked in an environment of constant sexual harassment. Complaining about these working conditions was pointless, because we had signed a forced arbitration clause, and the company knew that we couldn’t fight back in court. None of us understood the forced arbitration language when we signed our new-hire paperwork. But we were told that if we did not “check all the boxes,” we would not be hired. How can students like me build a brighter economic future when our employers are allowed to rip us off?
We talked with one of the report’s authors, Celine McNicholas, director of government affairs and labor counsel at the Economic Policy Institute. We asked about the significance of releasing that report on the one-year anniversary of the Supreme Court decision, Epic Systems v. Lewis.
Celine McNicholas: Epic Systems essentially codified the problem that you just revealed in the quote that you read, that workers are increasingly being required to sign away their right to sue when their employment rights are violated by their employer.
And Epic Systems essentially green-lighted employers embracing that practice, and, unfortunately, going into the decision, the majority of workers were already facing the threat of this. And we now know that employers are increasingly embracing it since the decision. So a year out, we’re seeing this more and more.
JJ: We talk, in media and elsewhere, about the labor “market,” as though people were mobile economic actors who can make informed choices about where to work. So if you don’t want to sign away your right to a class action lawsuit, the unspoken thinking goes, don’t take a job that requires it.
We should take issue with that idea, and, obviously, people have never been identically situated with regard to choices.
But your report makes it clear that in the private sector, in the nonunion private sector, not signing these things is increasingly just not an option. And it’s not just college students and their first jobs.
CM: That’s exactly right. And I think you hit on the fundamental myth, right, that we’re all sort of free agents in this economy.
And I think it’s wonderfully encouraging that unemployment continues to decrease, and wages, for the first time in a long time, we’re actually experiencing some level of an uptick. But still, most working people feel lucky to have a job, and feel that they have very little leverage, in that initial negotiation with their employer for the terms and conditions of their work.
And so in practicality, we all know, we can all admit that we signed the paperwork on the first day on the job—and we’re happy to be signing up for, potentially, if we’re lucky enough, healthcare, and all of the other tangential forms—but we also may be signing away this right, without even really realizing the implications of what we’ve been asked to sign as a condition of working there. And that’s a really troubling trend, because it applies across all employment rights.
JJ: These forced arbitration clauses that the report projects, by 2024, 80% of private-sector, nonunion workers will be covered by these forced arbitration clauses. Let’s spell it out: What is wrong with forced arbitration?
CM: So, short answer is “everything.” We’ll go into detail here: Essentially, when you are forced to arbitrate a claim, an employment claim, I would argue, in particular, because we just talked about the fact that most workers, you have limited leverage on the job; the employer, if they’re not happy with you, they can fire you for any reason at all, just not a narrow set of prohibited reasons that are protected reasons under the law.
Let’s say you’re being sexually harassed in your workplace, but you’ve been forced to sign an arbitration agreement on that first day. That means that, if you’re not getting any kind of relief, you go to HR, you go to your supervisor, and he or she says, “OK, we’re going to help you resolve this, but we’re going to do it through arbitration, you have no right to sue us.”
That immediately limits your leverage. But it also puts you into a process that hugely favors that employer, because you’re going it alone, you’re using a system that they’re paying for, “they” being the employer. That disadvantages all workers.
JJ: You very specifically are prohibited from joining together with other folks in the workplace who are experiencing the same problems that you might be.
CM: Yes, because many of these waivers include what you just referenced, a class or collective action component. And that means that you are in this system, arbitration, which is this unequal, unfair system, because the employer is really the entity that is a repeat player; that means that they are more familiar with the arbitrators, they’re often giving them business. So there’s this implied injustice in the whole system itself.
But then in addition to that, you’re doing this alone, you’re navigating as an individual worker. Whereas if you brought suit as a class or collective action, you would have a great deal more leverage.
JJ: And I understand that, mainly, what it does is just kind of discourage. It’s not even so much that workers lose when they go through this process; knowing that that’s their only option pretty much discourages them from taking action in the first place.
CM: I think that that’s exactly right. And it makes a lot of sense, if you think about it. Just think of how difficult in practicality it is to voice any kind of concern in your place of work. Figuring out who do you go to. Oftentimes, a supervisor may be, unfortunately, involved in the conduct that is violating the law.
And so you’re navigating an already difficult process, and then you’re being compelled to do so on your own. Most folks are not familiar with arbitrations; it sounds like an incredibly formal process. And it would not be incorrect if the employer says, “This is going to cost you money,” because oftentimes workers are absorbing some of the cost for the process itself. And in addition to that, they can say, “You’re going to be unlucky in this system, because we’ve navigated this a couple of times, and your fellow workers haven’t done very well in the process.” And as you point out, that is true.
So it’s not as advantageous. People do worse in the system than they do in court.
JJ: There are meant to be entities that are enforcing these workplace rules. Even if the sort of David vs. Goliath situation of individual workers is disadvantageous, there are protective entities, government agencies, that are meant to be looking out for them. The report also deals with problems in that enforcement area. What’s the problem or the concern there?
Celine McNicholas: “At the same time that many of us in our work are being asked to sign away our private right of action through this system of forced arbitration, we are also facing fewer and fewer cops on the beat in terms of public enforcement of those rights.”
CM: This is sort of a perfect storm, in my view, because what you’re seeing is decreased public enforcement; there are fewer and fewer public dollars being invested in enforcing workplace protections.
So at the same time that many of us in our work are being asked to sign away our private right of action through this system of forced arbitration, we are also facing fewer and fewer cops on the beat in terms of public enforcement of those rights. The Department of Labor’s, state departments of labor’s, budgets have decreased, while the workforce has expanded, and that leaves all of us with less protection in the workplace. And also, combined with forced arbitration, it’s such an incredible advantage—which is where that ominous title of this report comes from—it is an incredible advantage to corporate employers at this point, because they are making enforcement of any means, whether private or public, something that the vast majority of the workforce is losing access to.
JJ: We have these laws, you know, we make these laws on wages, against wage theft or on workplace safety. And then it seems like with Epic, the Supreme Court is just kind of waiving them away.
I mean, it’s kind of a balance of powers question, too, isn’t it? It seems like a real lopsided power that the Court is exercising here.
CM: Absolutely. And, in my view, Congress needs to act on this to restore the rights that were hard-won protections when they were originally enacted. Title VII, the right that fundamentally you can’t be discriminated against, harassed in the workplace, that’s an enacted law, that’s an enacted protection. And, essentially, it has been made very difficult, if not impossible, for many, many workers in this country to access that right.
Congress needs to then restore the right and say, “Hey, Supreme Court, you’ve misinterpreted this, you’ve essentially made this something that is no longer enforceable for the vast majority of workers when we gave this protection to the US workforce. You’ve overstepped”—just as you said—“and now we want to correct you.”
And this is not the first time that something like this has happened, where Congress has had to come in and correct something that the Supreme Court has misinterpreted. And it is my hope that they will do so here, because this cuts across fundamental rights, like even being paid the minimum wage. It is more difficult to enforce those rights when you have a system of forced arbitration that the Supreme Court has essentially blessed at this point in time.
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Janine Jackson: The Supreme Court’s 2018 Epic Systems ruling rested on previous decisions, like one in 2013 that said that the fact that the arbitration process might cost plaintiffs, workers or consumers fighting mammoth corporations more than they could hope to recover, was immaterial. “Antitrust laws do not guarantee an affordable procedural path to the vindication of every claim,” sniffed Antonin Scalia.
In 2015, the New York Times ran an important series exposing the machinations that lay behind such thinking. We talked about that with Joanne Doroshow, founder and executive director of the Center for Justice and Democracy, and cofounder of Americans for Insurance Reform.
Joanne Doroshow: Yeah, what we found out from this New York Times series is that in 1999, a bunch of big companies got together in a room and decided how they were going to start strategizing to make sure that they could start doing this to consumers, that they could start inserting these clauses and banning class actions, and that the US Supreme Court would uphold it. It was really startling to find out that the current Supreme Court chief justice, John Roberts, when he was a corporate defense lawyer, was part of all of that; he was representing Discover, the credit card company, at the time. And so now we are stuck with these decisions.
JJ: It seems important, again, to underscore that class action lawsuits, while they might be about the $30 overcharge that one person got, they really also are the only way, in some ways, you can expose wrongdoing on a big scale. I mean, some of these cases are about Taco Bell, for example, the charge that they—at least one outlet—was denying Black people promotions. The class action lawsuit isn’t just about the particular legal remedies for individuals; they really are about exposing wrongdoing on a larger scale.
JD: Absolutely; one of the most famous class actions in history was Brown vs. Board of Education. It is a very important tool for anyone who has been discriminated against, or who wants to try to hold big institutions to account for any kind of wrongdoing.
JJ: The pushback to the Times series is already underway. Forbes had a piece saying: Aha, the Times doesn’t tell you who the lawyer was for the one of the businesses involved in the case against American Express; he’s a lawyer known for fighting credit card companies! That’s the real face of consumer class action. These aren’t lawsuits by little guys trying to vindicate their rights; they are lawsuits by wealthy attorneys trying to get wealthier.
JD: That’s the only thing they have to say, is to try to blame lawyers. But there’s nothing I’ve seen so far, in any of the critiques of these New York Times articles coming from businesses, that suggests in any way that there is anything inaccurate about anything they said. What these businesses try to do is make it seem as if consumers are not benefiting from these class actions, but what we also know is that the Consumer Financial Protection Bureau in March, after a long empirical study, they found, in just the last year, tens of millions of people benefiting to the tune of hundreds of millions of dollars.
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Janine Jackson: CounterSpin spoke with Joanne Doroshow again in 2018, in the immediate wake of the Supreme Court’s 5–4 ruling in Epic Systems.
Joann Doroshow: “You’re forced to resolve your case in a private, secret, rigged arbitration system that’s controlled by the company.”
Joanne Doroshow: Just to step back for a minute, it’s not, of course, just workers that are affected by the problem we’re talking about. And the problem we’re talking about are forced arbitration clauses that are buried in the fine print of, these days, most credit card, cell phone, any kind of online terms-of-use agreements; nursing home admission forms; many other everyday contracts, including employment contracts.
And what they mean is that if the company cheats, defrauds, discriminates against or harms you in some way, you cannot sue the company in court, or have any kind of judge or jury trial. And, instead, you’re forced to resolve your case in a private, secret, rigged arbitration system that’s controlled by the company. And you may have to pay the arbitrator. There’s no right to appeal.
And these clauses also have what’s called “class action bans” or “class action waivers,” which means that you—as you say—you cannot join with others, you have to only litigate your dispute individually, your small claim, let’s say. In most cases, this is going to mean that you’re not going to be able to bring your dispute to any kind of resolution at all, because you’re not going to be able to afford to do that.
That’s why class actions are so important: It allows you to join with others, cover the expenses that way. And also, when we’re talking about discrimination, let’s say, or harassment, it’s critical that you be able to join with others, in order to show a pattern or a practice of discrimination, or a systemic company policy. You can’t do that as an individual. So there are many reasons why class actions are so important. And what this decision did, it basically said that an employer can unilaterally prevent you from bringing class action, and force you into these secret arbitration systems.
JJ: And it rests—inasmuch as there’s an argument for it—it rests on this in-a-vacuum libertarian fantasy world in which labor, for example, is as mobile as capital, and all workers and consumers are completely informed and have choices. So if, for example, your prospective employer requires you, as a stipulation for employment, to sign away your right to class action suits, well, you just pick another employer, you know? You just go elsewhere.
And in the case of Epic Systems, they sent a form to their employees, and if you showed up for work, then you were deemed to have accepted the terms of that agreement. So you talk about small print; I mean, it’s small print and it’s also a kind of blackmail in a way.
JD: Yes, and that goes to the issue of consent. What the other side says is, “Oh, you’ve consented, because you’ve signed this.”
Well, these are all “take it or leave it” contracts, and if you don’t take it, you don’t get a job, or, in the context of consumer contracts, everybody in the entire industry has them. There is no negotiation here.
And, sadly, what Congress was trying to do, with the National Labor Relations Act in the 1930s, is they made it illegal for employers to interfere in any way with the employees’ rights to engage in “concerted activity.” They knew that there was strength in numbers, and they needed to be able to join with others in order to get a fair deal from big companies, from employers.
And what this case did is basically said that legal concerted activity, like a class action, it’s OK to violate that section, basically, of the National Labor Relations Act; it’s OK for an employer to prevent concerted legal activity. So it really undermined the entire purpose of the labor law, which was the seminal piece of legislation enacted in the ’30s.
It’s shocking that the Court would just so casually do something like this, and yet they did it at a 5-to-4 vote. It was certainly not inevitable, but unfortunately, once Neil Gorsuch got on the Court, the vote became that. And he was the one that wrote this decision.
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Janine Jackson: The National Labor Relations Board is the interpreter of US labor law, charged with protecting employees’ rights, and with encouraging collective bargaining. Authors of the National Labor Relations Act were well aware that workers’ safety and strength lay in their numbers. While multiple factors have undermined workers’ power for decades, the Trump-era NLRB still managed to make things worse.
We talked in late 2019 with Kate Bronfenbrenner, director of labor education research and a senior lecturer at Cornell University’s School of Industrial and Labor Relations. She said the problems were clear from the start.
Kate Bronfenbrenner: We could just look at the appointees that came to the Board under Trump. The first appointee, John Ring, had to recuse himself from the first decision that came before the Board when he came through; he was actually involved in the company that the decision was on. He didn’t recuse himself, and then they had to reverse the decision, because he was actually involved with the employer.
JJ: It says a lot. Well, let’s pull back just a little bit and explain what the NLRB is. I mean, it’s kind of like the FCC, you’ve just indicated; it’s these five presidential appointees, it’s always going to be weighted by the party that’s in power. But right now, there’s just four of them, right? There’s a vacant seat.
KB: That’s right.
JJ: Their rulings are binding, though, even if you’re not used to seeing them in the headlines, but they do have a legal effect in workplaces, right?
KB: They do. And they’ve always been somewhat of a political animal in that the president, when there’s a vacant seat, they get to fill that vacant seat, but it’s never been an effort to have extreme people on the Board.
JJ: Right.
KB: But under the Trump administration, the appointees have been extremists. And that has really changed the tenor of the Board.
JJ: I wanted to draw you out a bit on that, because I saw you cited in a piece by Bobbi Murray at Capital & Main, saying that it’s not uncommon, when an administration changes, when a new White House comes in, for National Labor Relations Boards to reverse some decisions, some preceding decisions, but that what’s happening now with the Trump NLRB is of a different order. What are you talking about there?
KB: The decisions have been to reverse long-standing precedent, as opposed to reversing cases that have been always debated. So before, the trend was to reverse cases that have been always one of debate, where there was a one-vote difference. But now, the reversals have been on cases that had been upheld for decades. And that’s a very different trend. Longstanding principles before the Board.
JJ: Can you talk about a recent decision on how employers can stop bargaining? It sounds like it’s minutiae, and it’s huge in its impact, this new decision, calling for a new union election every time the contract is up for expiration…
KB: The Board is now giving employers much more power to question the majority status of the unit. Before, it was up to workers to file a decert petition at the end of the contract. If workers wanted to decertify the union, it was up to workers to file decertification. (Decertification means that they no longer want the union.) But the employer wasn’t the one that initiated that, the workers did. The only way the employer could say that they felt that the union shouldn’t be there is if they had a really strong reason to believe the union no longer represented the majority. For example, that there had been a complete turnover in the workforce, that they knew that all the workers they had hired were no longer there.
But now the employer can call for an election, that there should be a decertification election, and not wait for the workers to do that; and they can do that every time the contract expires. So that’s a huge change.
JJ: And sort of throw everything into turmoil. It just seems like a tremendous lever to move over to the employers’ hand.
Kate Bronfenbrenner: “No matter what employers do, workers still try to organize.”
KB: Most of all, it means the union has to spend energy; every time the contract comes up, a union has to spend its energy dealing with running through an election process, rather than working on building power for bargaining. And unions will probably win those, but it’s a negative effort, rather than the positive effort of building power for bargaining.
JJ: I think that although listeners may not have known about some of these NLRB decisions, they may not be surprised; they’re fitting in with a slew of anti-worker actions that we’ve seen from this administration, from letting companies that commit wage theft police themselves, and denying extension of overtime protections and undercutting antidiscrimination enforcement. We could go on and on. But I know that, at the same time as we see this administration trying to lock down this anti-organizing Board, we also do see a lot of tangible worker victories. Teachers, for instance, but then also the Fight for 15. If you expand your understanding of who “labor” is, there’s plenty to see right now that’s encouraging, don’t you think?
KB: Well, we see young workers more excited about unions than ever before. And that means that the future will have more union support. That’s a positive trend that’s very exciting. We see an increased interest among white-collar workers, we see digital media is organizing, we see workers across the industrial spectrum organizing, that’s a new trend.
We also see the immigrant workers, despite all the pressures against them, what a frightening time it is, that they are organizing. And despite all the shenanigans about misclassification of workers, contract workers have been organizing for decades. And I think that it shows that no matter what employers do, workers still try to organize. So Uber workers and Lyft workers have been going on strike, trying to organize.
JJ: Yes, it seems that workers recognize that the playing field is not what it was. But there is, if anything, maybe I’m hopeful, but I do see a revival of worker-organized activity inside and outside of traditional unions, as we understand them.
KB: Yeah. And there’s been a groundswell of organizing among low-wage workers, high-tech workers, and much of it is led by women of color.
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Janine Jackson: That was Kate Bronfenbrenner from 2019; before her, you heard Joanne Doroshow from 2015 and 2018, and Celine McNicholas from 2019. And that’s it for CounterSpin for this week.
CounterSpin is produced by FAIR, the media watch group based in New York.The show is engineered by Alex Noyes. I’m Janine Jackson. Thanks for listening to CounterSpin.
