Arbitration is a common method of resolving legal disputes without the involvement of a judge or jury. It can protect the financial interests and reputation of a business, because arbitration proceedings are often subject to confidentiality requirements.
By requiring employees to settle all of their disputes individually and privately, companies can also prevent their workplace as a whole from knowing about any potential misconduct or legal problems.
Having employees sign arbitration clauses can also subconsciously dissuade or disempower them from trying to resolve disputes in the first place.
In a recent case involving co-working startup WeWork, an employee was fired for refusing to sign the company’s arbitration agreement. The employee has in turn filed a lawsuit against WeWork for possible labor law violations.
I ALREADY SIGNED AN ARBITRATION AGREEMENT—WHAT CAN I DO NOW?
If your employer has wronged you in some way, it’s important that you seek attorney representation, regardless of whether you think the arbitration agreement is binding.
If it is determined that arbitration is indeed your only legal avenue, make sure that your lawyer is qualified to resolve employment disputes and has experience handling arbitrations. Whoever represents you must thoroughly investigate your claim and meticulously review your original employment contract.
Employees often accept unfair settlements or lose entirely because they don’t know the full scope of their legal options.
Bear in mind, also, that there is not yet a consensus on the legality of certain aspects of arbitration agreements. As demonstrated by the Epic Systems case, it is possible for courts to rule arbitration agreements unenforceable.
Lastly, if you have signed an arbitration agreement, it is vital that you retain any documentation related to that agreement, your employment as a whole, and the dispute in question. In the event that your dispute is ultimately resolved by trial or arbitration, having strong evidence of your claims will be essential.
BTG’s Contingency-Fee Model and the Justice Gap
In a society where legal arcana is creeping ever further into our everyday lives—with everything from credit card applications, to renter’s agreements, to employment contracts containing complex language that’s nearly impossible for non-lawyers to understand—access to legal representation is less a luxury than a necessity.
At the same time, soaring legal fees have barred access to the legal system for middle class Americans, who don’t qualify for low-income legal aid, but can’t afford the high hourly attorney rates that wealthy individuals and large corporations can. This problem has come to be referred to as the “Justice Gap.”
The result is that millions of Americans are unable to afford great legal help for business disputes and receive the full protection of the law they’re entitled to.
WHO BENEFITS FROM THE LEGAL SYSTEM?
A recent article in Law360 minces no words when it describes the U.S. legal system as a “totally self-contained perpetual motion machine of an industry—one that’s built and maintained mostly for [lawyers’] benefit, often at the detriment of the end user.”
The end user, of course, is the everyday American unable to afford access to justice because of attorney rates that are as high as $2,000 per hour and a billable time system that encourages lawyers to drag cases out for as long as possible, and often bases partnership and promotion on the number of hours clients are billed for.
In his latest book, Morgan & Morgan’s founder, John Morgan, reflects on the thought process that led him to contingency-fee commercial litigation. “The concept of paying people by the hour, on the honor system, to do work is preposterous,” says Morgan. “Would you ever pay a painter or landscaper by the hour? Of course not. You pay them for the job.”
Yet even when clients are billed for hundreds or thousands of hours, Morgan points out, many lawyers, content to merely rack up billable hours, never actually take a case to trial.
When the client is wealthy, letting a case drag on means more billable time and more money. But when the client isn’t wealthy and doesn’t have millions of dollars to sink into litigation, a drawn-out legal affair usually means he or she must settle for less than the full amount of compensation owed.
The author of the Law360 article suggests a “consumer-first business model” as a way of dealing with legal system unfairness, but doesn’t get into specifics.
For John Morgan, the solution was simple: handle every case on a contingency basis, level the playing field, and force the competition to fall into line.
SELF-REPRESENTATION SPIKE REFLECTS LACK OF FAITH IN SYSTEM
Courtrooms across the country have seen a significant rise in the number of litigants representing themselves in legal matters—a practice known as “pro se” representation.
Presenting to the Utah Bar in 2013, Edge Consulting estimated that Americans at all income levels obtain help from lawyers with just 15% of their civil legal problems. Statistics from several states show just how prevalent pro se litigation is.
- In Utah, 83% of divorce cases, 87% of protective order cases, and 98% of eviction cases have pro se litigants
- In New York, 97% of child support cases, 99% of eviction cases, and 99% of consumer credit cases have pro se litigants
- In Florida, 80% of divorce cases include at least one pro se litigant
- 80-85% of California legal consumers are self-represented
Pro se litigation is a response to rising legal costs as well as a perception that lawyers are in it for themselves. For example, an American Bar Association study found that half of all pro se litigants believe that lawyers care more about their own self-interests than their client’s rights.
But with lawyers charging hundreds, even thousands, of dollars per hour for legal services that don’t always deliver optimal results, it’s hard to blame consumers for being cynical.
Self-representation isn’t the answer, however, as it usually results in worse outcomes for litigants, according to judges surveyed by the American Bar Association. The greatest problems facing pro se litigants, judges said, is the failure to present necessary evidence, procedural errors, ineffective witness examination, and failure to properly object to evidence.
Regret Signing That Arbitration Agreement? You May Still Have Options.
On May 26th, 2016, the Seventh Circuit of the U.S. Court of Appeals in Utah made an important decision regarding the arbitration agreements many companies require employees to sign.
The case involved Epic Systems, a Wisconsin company whose arbitration agreement prohibited employees from joining class action lawsuits against the company or going to court against the company at all.
Although arbitration agreements have been upheld by Supreme Court cases in the past (particularly in reference to consumer-facing agreements), Lewis v. Epic Systems demonstrated that forcing employees to sign such clauses could stand in violation of the National Labor Relations Act.
The decision of the Seventh Circuit could be a significant turning point in a commercial landscape where mandatory arbitration agreements are becoming increasingly popular, even for smaller businesses.
Free Consultation with an Arbitration Lawyer
When you need a lawyer for arbitration, call Ascent Law for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506