Arbitration vs. Litigation and how companies are taking away your rights

[Quetzal]

Locked Out

What do Circuit City, Waffle House, and Labor Ready have in common? The companies all force employees to sign away their rights to go to court.
By Kate Andrias
CHEATED OUT OF HUNDREDS OF MILLIONS OF DOLLARS of overtime pay, Wal-Mart employees in 28 states have filed lawsuits. In New York, several hundred delivery workers at the Gristedes supermarket chain just won a $3.2 million settlement; they were paid less than $3 an hour for shifts lasting 10 to 12 hours a day. Similar suits are pending against the national drugstore chain Eckerd and the uniform company Cintas, both of which allegedly misclassified their employees as "salaried" in order to avoid paying overtime to those who work more than 40 hours a week.

Employers have noticed the trend, and they're taking measures to shield themselves. Companies like Circuit City, Waffle House, and Labor Ready are demanding that their employees waive the right to pursue employment-related claims in court. Under these waivers, known as mandatory dispute resolution agreements, workers must resolve any work-related legal claims against their employers through private arbitration. The American Arbitration Association now provides dispute resolution services to 600 companies covering seven million employees.

The Supreme Court has endorsed this practice of employer-mandated arbitration in a series of cases since 1991. It has found that Congress sought to end judicial hostility to private arbitration agreements when it passed the Federal Arbitration Act in 1925. Arbitration, the court concludes, is therefore a preferred method of resolving disputes. For many years, this private process gave businesses a relatively cheap, informal, and efficient mechanism for resolving disagreements with other businesses. But, in the last decade, companies ranging from credit card distributors to cellphone providers have also begun requiring consumers to resolve any disputes through arbitration. Employees are being asked to sign similar arbitration agreements as a condition of employment. Proponents of arbitration argue that it offers a better alternative to employers and employees involved in a dispute than protracted litigation in the overburdened federal courts.

more...

http://www.legalaffairs.org/issues/May-June-2004/argument_andrias_mayjun04.html

[amazona]

1. years ago I was told, you CAN'T sign away your rights

This is why you can sue for malpractice even if you have signed a liability waiver to get medical treatment. Otherwise, there would be no need for malpractice insurance because no one would be able to sue.

All credit card companies claim they have arbitration but when I got in a prolonged dispute and informed my CC company that I had plans to file a claim in small claims court, they did not insist on arbitration, they went ahead and settled.

A friend of mine was awarded $40,000 in arbitration a few months ago. The plaintiff did not pay, and the case is going to court anyway.

Is there a lawyer here who can tell us if we really need to be worried about arbitration? I mean, just to get a check-up, you have to sign a waiver, to get a credit card, ditto. We all sign this stuff, I was told it meant nothing?