Compelling Workers to Take Job Claims to Arbitration is Bad for Business

Monday, June 25, 2001
by Marc J. Lane

Reprint permission from the June 25, 2001 issue of Crain's Chicago Business.

The U.S. Supreme Court just decided that a company may lawfully require its worker to submit any future employment-discrimination claims to an arbitrator -- and forfeit his right to a trial. By so ruling, the high court may have resurrected a them-against-us mentality better left dead.

The case involves a guy named Saint Clair Adams, who signed a take-it-or-leave-it arbitration "agreement" before Circuit City Stores, Inc. would hire him as a computer salesman. The agreement didn't promise him any specific wages or benefits or any job security. All it did was lock him into his employer's private justice system.

You need to understand that Adams would no sooner have consulted a lawyer to tell him what signing such an agreement might mean than he would retain Johnnie Cochran to defend his speeding ticket. And had Adams raised any concerns about being barred from going to court, he probably wouldn't have been hired.

Adams unwittingly signed his rights away and went on to suffer the consequences. He claims Circuit City discriminated against him because he's gay, and he sued the company, demanding a jury trial. And now the Supreme Court has held that Adam agreed to settle any dispute with Circuit City through arbitration and has denied him a trial.

Resolving workplace disputes through arbitration makes perfect sense. The judgment of an expert arbitrator may be more informed and better reasoned than most jurors'. And, while a suit might take five years to work its way through the courts, arbitrations are often resolved in months. The high costs of litigation are saved. And both the company and its employee can avoid public scrutiny.

But coercing employees to surrender their civil rights is bad business. And fair play demands fair rules.

Marc J. Lane is a Chicago lawyer and financial planner and an adjunct professor of law at Northwestern University.


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Copyright © 2001 by Crain Communications Inc.

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