Forced Arbitration for Workers’ Claims? July 2014 Fair Pay and Safe Workplaces Executive Order

Forced Arbitration for Workers’ Claims? July 2014 Fair Pay and Safe Workplaces Executive Order

Last week, President Obama issued an executive order on “Fair Pay and Safe Workplaces.”  Here’s what it does for American workers.

What the Fair Pay and Safe Workplaces Executive Order Does For Workers

What the president has done is issue an order that prohibits any corporation that has a contract with the federal government of $1,000,000 minimum (for all sorts of things) from forcing arbitration upon their employees when those workers are pursing claims for discrimination or for sexual assault (rape) or harassment (both civil rights violations). It bans forced arbitration for all disputes filed under Title VII.

This new Executive Order will also:

  • Make prospective contractors reveal their past 3 years of federal labor law violations if they want to be awarded a federal government contract.
  • Block companies that have violated labor laws over and over again from getting federal government contracts.
  • Forces companies to give their workers backup information on their work to make sure they are getting paid what they are supposed to be paid (overtime hours, total hours worked, etc.)

What This Means to Workers in Indiana and Illinois

This executive order impacts big companies that have deals, or want deals, with the federal government. There are a lot of these big corporations in our area, and many workers in our communities will be impacted by this change.

Workers in companies that do business with the federal government can make sure they are getting paid what they are supposed to be paid. Now, they will be able to protect themselves against discrimination as well as pursuing claims for things like harassment on the job in open court and the standard litigation process.

What is Forced Arbitration?

The employee is required by the employer to waive their right to sue the company in a civil lawsuit, or to become part of a class action lawsuit, and to opt instead for “arbitration” of any claims against the company. In arbitration, the result is final, and the decision is confidential. Companies love arbitration and like to include forced arbitration clauses in their employment agreements.

Why is Forced Arbitration Bad?

Forced arbitration takes the dispute out of the traditional justice system and places it into the “arbitration system.” Here, different rules of evidence apply. There is NO right to appeal. The decision will not be made by one’s peers but instead by a single arbitrator or a panel of arbitrators. No one knows what happens in the arbitration, it’s private. The results are private, too.

Forced arbitration is notorious for favorable results for big corporations and being less than fair to the Average Joe Citizen. All the protections of the civil system, with trial court judges overseeing the accumulation of evidence through the discovery process, and having a jury trial to decide justice — these are removed in a forced arbitration.

This new executive order is good news for American workers because it takes away forced arbitration of worker disputes in many situations.

However, much still needs to be done.

Forced arbitration is still a huge problem in this country. This is one step forward to the absolute bar of forced arbitration in this country and this is a good thing.


If your bank, cell phone provider, employer or other company that you conduct business with violated your rights or cheated you, would you want to retain your ability to take them to court? Many companies are now using fine print to stop you and other consumers from doing so. … These corporations put “forced arbitration” clauses in their terms of service to block consumers from holding them accountable in court. If consumers (or employees) are hurt or ripped off by these companies, they must take their claims to private, secretive tribunals that favor the companies.

Go here to surf through their Rogue’s Gallery of Companies Using Forced Arbitration.



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