
What Happens When You Try to Sue Your Boss - electricwater
https://www.bloomberg.com/features/2019-arbitration-hell/
======
jedberg
Ok, so the reason we have arbitration at all is to save the courts time. This
makes sense.

This seems like such an easy problem to solve too. Just don't let the company
or the worker pick the arbitrator. Require by law that the arbitrator be
picked by a judge, or be randomly assigned by the court system, who has
presumably vetted the arbitrator.

The main problem with these things is that the arbitrator is picked by the
company, so they have a strong incentive to favor the company. Arbitration
wouldn't be so bad if the inherent bias is removed.

~~~
learc83
The problem is that companies favor arbitration because arbitration tends to
favor companies. If arbitration were truly neutral, and it were easy to access
with low costs to the consumer, companies would stop using them.

So even if companies don't pick the arbitrator, arbitrators still have an
incentive to find in favor of companies.

Additionally, small claims court already basically works like what you're
describing, no jury just one arbitrator not picked by either side--the judge.

~~~
munchbunny
Restructuring arbitration for neutrality and thus cannibalizing arbitration as
an industry seems like a fine outcome to me. Feels a bit like the payday loan
industry: I'm sure it does some people some good, but it's largely just
predatory and throws people into a rigged game. We'd be better off with less
of it.

~~~
verbify
An underappreciated facet of payday loans is that without them desperate
people would borrow from unsavoury people - making them illegal drives the
high risk loan business underground into the hands of the Mafia. And then the
consequences for the desperate people for defaulting is no longer bankruptcy,
but broken legs or worse.

I agree we should have less of it, but all legislation should be mindful of
the consequences of certain types of restrictions.

~~~
CaptainZapp
Why not cap the maximumum interest rates?

Switzerland, not really a communist hell hole and quite liberal in economic
matters, for example, caps annual interest rates at 15% annually.

You don't see more broken legs than anywhere else.

~~~
verbify
If you cap maximum interest rates then people who are deemed too 'high risk'
will be refused credit. As a result, they will seek credit elsewhere.

Switzerland is a wealthy low-crime country to start with, the mafia do not
have a strong hold. For example the homicide rate in Switzerland is 0.54 per
100,000 people, by comparison in the United States it is 5.35 per 100,000
people.

~~~
ardy42
>>> An underappreciated facet of payday loans is that without them desperate
people would borrow from unsavoury people - making them illegal drives the
high risk loan business underground into the hands of the Mafia. And then the
consequences for the desperate people for defaulting is no longer bankruptcy,
but broken legs or worse.

> If you cap maximum interest rates then people who are deemed too 'high risk'
> will be refused credit. As a result, they will seek credit elsewhere.

You could solve the loan shark problem _and_ cap the interest rate by
socializing the rest of the risk through some mechanism -- say a regulation
that requires TBTF banks to offer payday loans and make up for the loss
through their other products. Obviously there are details to be worked out,
but the burden of a policy to combat loan sharking does not have to fall on
the most vulnerable.

~~~
gruez
>say a regulation that requires TBTF banks to offer payday loans and make up
for the loss through their other products

but if banks are forced to make loans at a loss, aren't we effectively
subsidizing people that don't repay loans? you might think this is a noble
goal, but I'd doubt many people will be on board.

~~~
ardy42
> but if banks are forced to make loans at a loss, aren't we effectively
> subsidizing people that don't repay loans? you might think this is a noble
> goal, but I'd doubt many people will be on board.

Perhaps, but I have little sympathy for the feelings of the better-off people
who want to clutch every penny to the point that they are jealous of the help
the needy might get. If they're able to block reforms, then I think efforts
need to be made to change their attitudes.

------
Aqua
It's absurd that you can actually waive any of your legal rights... Seriously,
this is bonkers.

 _After the #MeToo movement revealed that forced arbitration has been used to
keep sexual harassment complaints quiet, a handful of companies, including
Google and Facebook Inc., agreed to get rid of it for harassment claims_

Wow, how noble of them. How about getting rid of all of that BS?

~~~
philwelch
> It's absurd that you can actually waive any of your legal rights..

"You have the right to remain silent. So, we're just gonna go home now. Bye."

A right that you cannot waive is more of an obligation, even if it's an
obligation that in theory is to your own benefit.

~~~
johnnyfaehell
> A right that you cannot waive is more of an obligation, even if it's an
> obligation that in theory is to your own benefit.

This is one of the silliest sentences I've read today. An obligation is you
had to do something. While a right is something you can choose to exercise or
not. With the right to be silent, you never waive that right as in they can
never force you not to be silent. What you do is you exercise your right to be
silent or you don't. You can decide when and if you speak.

~~~
philwelch
The distinction between waiving and not-exercising a right is a bit of a
gradient, though. Most contracts entail at least one party incurring future
obligations. Any of these obligations, by virtue of not existing in the first
place, will waive one’s pre-existing rights.

There are legal limits on which contracts are enforceable by law, and perhaps
mandatory arbitration should be one of them. But there is always, in
principle, the ability to waive one’s rights, because there’s no other logical
way to voluntarily incur future obligations.

~~~
johnnyfaehell
Waiving your rights is about removing future options. Since you're agreeing
not to do something. That is not an obligation and the requirement do
something. Not the inability to do something. One is an action the other is
inaction.

If you say I agree to go to arbitration that is an obligation. If you say I
will never sue and must always go to arbitration that is final. That is
removing the option to sue and adding in an obligation.

~~~
philwelch
> Waiving your rights is about removing future options. Since you're agreeing
> not to do something.

 _Every_ contract entails waiving your rights and removing future options. And
_tons_ of contracts include, as consideration, the agreement not to do
something. Leases, for example. If you lease an apartment, you usually have an
implied legal right to sublet; correspondingly, most landlords have a clause
in the lease requiring you to waive that right, right next to the clauses
requiring you not to get a pit bull or smoke cigarettes indoors or have
somebody else living with you unbeknownst to the landlord.

Another example is exclusivity agreements: a shopping mall might sign a
contract with Panera giving that Panera an exclusive right to sell sandwiches
at that mall, which means the mall is agreeing _not_ to lease a different
retail space to Subway or Quiznos. What if they lease it to Qdoba and Panera
thinks a burrito is a sandwich? That was a real lawsuit, which Panera lost,
not on the grounds that it's impossible to incur a negative obligation by
contract, but on the grounds that a burrito is not a sandwich:
[https://loweringthebar.net/2006/11/judge_rules_bur.html](https://loweringthebar.net/2006/11/judge_rules_bur.html)

There _are_ legal rights that are protected to the extent that you cannot
waive them and that any contract that entails such a waiver is an illegal and
unenforceable contract. It's just that these rights tend to be explicitly
stated as such in law, and the right to go to a court of law is not currently
one of them. Maybe it should be, but that's a policy argument, not a
fundamental argument of legal and moral principle the way you're making it out
to be.

~~~
johnnyfaehell
> There are legal rights that are protected to the extent that you cannot
> waive them

Yes. This is entirely about "legal rights". Why would you assume otherwise?
And the right to go to court, the right for the law of the land to be applied,
is a legal right, it may even be a human right. The US is lacking behind the
world in legal and human rights, is the entire point of this thread.

~~~
philwelch
> The US is lacking behind the world in legal and human rights, is the entire
> point of this thread.

That is a ridiculous overgeneralization.

~~~
johnnyfaehell
Ok, in the developed world. And it really isn't. The US might be the worlds
richest Country but in many areas, it's like a developing nation.

~~~
philwelch
> The US might be the worlds richest Country but in many areas, it's like a
> developing nation.

Primarily in that it's still developing rather than stagnating.

> Ok, in the developed world. And it really isn't [a ridiculous
> overgeneralization that "the US is lacking behind the world in legal and
> human rights"].

Conveniently enough, I already have a list of counterexamples for Europe in
particular:

* The United States also recognizes a constitutional right to same-sex marriage, which is not at all recognized in Italy, Greece, Czechia, Poland, Slovakia, Romania, Bulgaria, Lithuania, Latvia, Estonia, Switzerland, and Northern Ireland.

* In terms of civil liberties, the US is virtually unique in recognizing an absolute right against self-incrimination and an exclusionary rule of evidence, where evidence collected in contravention of anyone's civil rights is admissible in court.

* One of the biggest controversies in recent American politics is whether to overturn the constitutional standard of _jus soli_ birthright citizenship--the notion that any human being born on American soil is unconditionally an American citizen. No European country has this policy at all, let alone enshrined in a written constitution.

* The US does not have mandatory military service. However, Austria, Denmark, Finland, Greece, Norway, and Switzerland all do.

* Unlike many European countries, the US has a virtually complete lack of media censorship by the government.

* Austria, France, Belgium, Germany, and Bulgaria have all outlawed face coverings, while Switzerland has banned the construction of minarets. France prohibits the wearing or display of "conspicuous religious symbols" in schools, a law targeted at hijab-wearing Muslims. The United States has no equivalent laws, and any such laws would almost certainly be ruled unconstitutional.

If you're bringing in "the developed world", that might include countries with
absolutely terrible human rights records like Qatar or UAE, as well as other
undemocratic states like Singapore.

------
fzeroracer
Arbitration agreements are a massive, massive scam and the fact that they can
be forced as part of your employment contract needs to go. It allows companies
to sweep away shitty corporate behavior and avoid addressing the actual issues
with their workplace in addition to overwhelmingly tilting the system against
employees.

~~~
windexh8er
My rule of thumb is if I can't opt out of arbitration then I can't work for
you. Most established orgs give you a grace period after start date to request
opt-out to legal and I've run into no flack for doing just that. However I've
learned from experience that it is critical to not be bound by it - especially
if your pay is tied to a metric or a quota and/or a portion of your package is
options/RSUs.

~~~
lsc
so... serious question, and I'm asking you, 'cause it sounds like you are
implying that you've sued your employer. is suing your employer a seriously
career-impairing move? I mean, I think most court proceedings are public
records, and it seems like if the fact that you sued your last employer for
something came up in your background check, I personally assume that'd be as
bad or worse than an old felony conviction, from the employer's perspective.

Are people who sued their employer a protected class in the USA, or is there
some other reason why this isn't a career-ending event?

~~~
gcb0
it probably won't impact you.

~~~
lsc
well, yes. For a lot of reasons, I'm not likely to sue my employer.

But, that doesn't mean I'm not curious.

------
gleenn
It's really sad corporate America owns workers, forced arbitration is such a
handout. Now UBS gets to ax anybody they want a day before their bonuses are
due and even if they go through with arbitration they've done the math and
saved 50%.

------
narrator
Just to put a word in for the other side. A friend of mine had some startup
that had a huge contract for its product. One of the employees got let go and
filed an employment suit. The lawyer he got was somewhat unethical and
basically buried the company in legal fees. They went out of business before
they could fulfill the big contract and tried to settle many times with the
employee, but the lawyer kept egging him on and nobody got any money in the
end except the lawyer. The end.

~~~
devereaux
How can the lawyer of one party cause legal fees to the other party?

I genuinely do not understand, as each party is responsible for its own costs

~~~
unreal37
Each time you file a motion or a brief, the other side has to review that
brief and file a counter-motion or brief. And research has to go into those
things and you might spend days trying to come up with the information being
requested.

Every request you make from the other side, causes the other side more work
and thus more expense.

Imagine I asked you to find a receipt for every restaurant you've eaten at in
the last year, along with a list of who was there and what was discussed. How
much work is that for you? Would answering that question be a significant
amount of work?

~~~
renholder
>Each time you file a motion or a brief...

That doesn't sound like arbitration.

------
piokoch
I didn't know that it is legal to force someone to resign from being able to
go to the court. I thought that right to use court to defend ones right is a
right that cannot be revoked by some agreement. For me it looks as if someone
would sign an agreement that company might kill employee if sales target is
not met or enslave him and his family.

------
gboudrias
I'm fairly against arbitration and I'm fairly certain it's much more limited
here in Canada.

In this particular story, what strikes me is the _amounts_ being discussed. 1
million dollars isn't chump change to anyone. If we have to have arbitration,
there should be a hard legal limit on how much they can arbitrate when a
physical person is involved. Also it should be limited to financial matters,
forcing any other matter (discrimination etc) to be settled privately seems...
wrong.

~~~
renholder
>In this particular story, what strikes me is the amounts being discussed. 1
million dollars isn't chump change to anyone. If we have to have arbitration,
there should be a hard legal limit on how much they can arbitrate when a
physical person is involved.

Two points:

1\. 1 Million _is_ chump change to UBS.

2\. It was class-action. More parties = More money. He wasn't in it just for
himself.

------
paxy
Arbitration contracts need to be illegal, period.

~~~
electricwater
I think they should be legal but both parties need to agree to it after a
lawsuit is filed. The courts may approve or deny this request on the basis of
public policy.

I wonder if a political party (Democrats) will take it up on them to restrict
the ability of forced arbitrations between an employer and employee. I think
it is just a question of time before someone like @AOC starts talking about
it.

~~~
lostdog
The CFPB tried to make a rule preventing forced arbitration in financial
services agreements. You will be unsurprised to hear that Republicans in
Congress struck that rule down.

------
onetimemanytime
Arbitration is perfectly reasonable. I can imagine in the old days (even now
in some regions) the elders would gather to settle /judge disputes so they'd
be no fights, killings and so on.

But today, the fact that companies, with a lot more lawyer money than
individual employees, push that, shows all we need to know.

------
mwexler
While we are all bemoaning this for employment, note that in the US, in many
cases, you've also given up your right to court for your credit card
disagreements, disagreements with your insurance company, and disagreements
with most major service providers where you had to sign a contract (though
many telcos still provide an out for Small Claims court).

This is not just an employment thing, this is individual vs. group power
dynamics across many aspects of commerce. As consumers or creators, if we
provide work to a group (employment) or pay a group for service (a contract),
that group is often working to push us into arbitration instead of allowing
the courts to decide.

It's all very disappointing.

------
mig_
With arbitration, for the company, worst case the company pays the original
amount. Without arbitration, in the court, worst case is the company pays the
original amount + the clients lawyer fees.

------
tjpnz
What would happen if you hired a lawyer and sued anyway? People agree to
things all the time that wouldn't hold up in court.

~~~
InfamousRece
The other party would then file Motion to Compel Arbitration. This will
usually result in the dismissal of the lawsuit.

------
Traubenfuchs
I have very little sympathy and connection with people who forfeit a 500k
bonus to fight for a million instead, knowing they gonna have a hard time
doing so.

They should have portrayed someone from the nurses they mentioned instead.
Small amounts or problems someones life depends on make for a dramatic story,
a rich guy and his fight for hundred thousands of extra compensation make me
scoff.

~~~
C1sc0cat
If they do it to a rich person what do you think happens to the average
worker. ie me and you

You cant in any sane country have a legal system that has one rule for "cute"
nurses or any other group that the tabloids moon over and one for the average
person.

------
wiradikusuma
"(the) firm Proskauer Rose LLP who specializes in defending finance companies"
— I wonder what would happen if _their_own_ employees sue them, it would be
hilarious.

Also:

Apparently, I can't select the text to copy/paste—and I've tried disabling
JavaScript. I wonder what's the reason for this?

~~~
LiquidFlux
There exists a CSS property to disable highlighting, user-select: none; I
believe, but in this case ( with JS enabled ) the highlight colour is simply
not WCAG AA2 compliant and is nearly the same colour as the background

See the paragraph starting "After Chinn's rebuttal..." \-
[https://i.imgur.com/M02ob3O.png](https://i.imgur.com/M02ob3O.png)

------
mruts
Why can’t judicial systems just get more funding? Surely they aren’t that
expensive? You just have to rent the space, and pay the employees (all of
which probably don’t make that much money).

Surely some money from the military could pay for that?

~~~
JumpCrisscross
> _pay the employees (all of which probably don’t make that much money)._

Court are packed with lawyers. The only thing buttressing against the sky-high
compensation a good lawyer can make in the private sector is the political
opportunity clerking and working in a court can open up. These aren't people
one goes cheap on.

~~~
mruts
According to google, public prosecutors make a median salary of $81,000. So
maybe like two-thirds as much as an average software engineer? Doesn't sound
that expensive.

Also, they get to cash in after working in the public sector for awhile, so in
essence they get deferred comp from the private sector.

------
User23
Can a lawyer here explain how these arbitration clauses aren't unconscionable?

~~~
URSpider94
Not a lawyer, but the Supreme Court has ruled that they are Constitutional,
and that’s pretty much that.

~~~
rlpb
That doesn't mean it's automatically how things should be. The Supreme Court
doesn't rule on that. If the Supreme Court was the only measure of
"correctness", then the US might as well wipe its statute book clean.

Another way of looking at it is that the Supreme Court has only ruled that
they aren't _un_constitutional. It's then up to Congress to decide whether or
not they should be illegal.

I read elsewhere on this page that apparently the Republicans blocked such
things from becoming illegal.

In my view as a non-American, it feels like Americans attribute too much
weight on things they don't like on the Supreme Court, which deflects from the
reality that it is the major political parties (perhaps just one) supporting
this status quo.

------
mig_
With arbitration, for the company, worst case the company pays the original
amount. In the court, worst case is the company pays the original amount + the
clients lawyer fees.

------
tluyben2
Not sure why people sign contracts like that; never sign non competes or this
kind of thing. Never did never will. But then again, I am not in the US, maybe
it is that different.

------
ukyrgf
Five top-to-bottom scrolls on my mouse just to get to the first line of the
article.

------
exabrial
Physical access: game over

------
MaupitiBlue
Arbitration isn’t necessarily bad for workers. Arbitrators tend to split the
baby. So, if you have a weak case, you may come out ahead.

~~~
TomMckenny
Employees only win some 20% of arbitration cases. It seems incredibly unlikely
that 80% of cases are employees going through all this outlandish effort just
for bogus claims.

And if 20% is considered splitting the baby, I tremble to imagine what part
the employee ends up with.

~~~
fundingshovel
20% is far better than 1%

[https://www.fastcompany.com/40440310/employees-win-very-
few-...](https://www.fastcompany.com/40440310/employees-win-very-few-civil-
rights-lawsuits)

~~~
TheCoelacanth
1\. That is only "civil rights lawsuits", probably one of the hardest kinds of
cases to win.

2\. You left out the 78% "likely settlement" category. Many of those are
victories for the employee, just not the maximum possible victory.

