Corporations Were for Arbitration, Before They Were Against It

Washington, DC-- Corporate lobbyists attacking the Employee Free Choice Act, legislation that would allow workers to bargain with their employers for better job security, wages and benefits, are showing their true colors when it comes to rules intended to rein in greedy CEOs. In recent weeks, corporate lobbyist groups such as the Center for Union Facts, the Chamber of Commerce, and conservatives like Newt Gingrich, have waged war to prevent workers from enjoying what CEOs take for granted: a contract.

In a Wall Street Journal op-ed today, and in a Politico op-ed from Newt Gingrich last month, anti-worker groups have attacked the first contract arbitration" portion of the Employee Free Choice Act. That provision seeks to stop employers from using endless foot-dragging against workers who have voted for a union, but have yet to secure a contract. The legislation says that if employers and workers can't reach an agreement in a reasonable amount of time, either side can bring in a neutral, private-sector arbitrator to settle the dispute.

"The corporate lobbyists opposing common-sense legislation to rein in greedy CEOs are finally showing their true colors," said SEIU Secretary-Treasurer Anna Burger. "This legislation would simply ensure that workers who wake up and go to work every day to keep America running can have their vote for a union respected. Right now, we have an economy in which Big Businesses would rather give their top executives another million-dollar bonus, than give their workers a one dollar raise."

Ironically, corporations use arbitration all the time, because they say it's a fast, inexpensive way to settle disputes. The Chamber of Commerce in particular has campaigned in favor of consumer arbitration, where corporations set the rules, noting that, "The data is increasingly clear: for most consumers, arbitration is a better way to resolve disputes" than going to court. Another issue paper from the Chamber boasted that "virtually any type of dispute...can be settled by arbitration." Yet they oppose arbitration when it seeks to level the playing field for workers.

"Once again, these groups are obstructing common sense reforms to level the playing field for workers--but all they care about is protecting their bottom line," continued Burger.

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CORPORATIONS LOVE ARBITRATION...WHEN IT SUITS THEIR NEEDS.

"Over the past decade, the arbitration clause has become increasingly common in almost every consumer contract, whether it's for a credit card, telephone service, pesticide treatment or home construction... Businesses say arbitration is a faster and far more efficient way to resolve disputes than court suits." [Washington Post, 4/17/06]

"...Arbitration is mutually beneficial, which is what we have always thought," - Arne Wagner, assistant general counsel for Bank of America [ABA Journal, December 1994]

Chamber of Commerce Has Campaigned for Binding Arbitration

Chamber: Consumer Arbitration "Fair, Inexpensive, and Unbiased." In March, Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, wrote that the findings of a new study "helps prove that arbitration continues to provide consumers with fair, inexpensive, and unbiased access to justice across the broadest spectrum of consumer disputes." [U.S. Chamber Institute for Legal Reform, 3/11/09]

Chamber: "Arbitration is a Better Way To Resolve Conflicts." In July 2008, Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, said, "The data is increasingly clear: for most consumers, arbitration is a better way to resolve disputes than being forced into court." [U.S. Chamber Institute for Legal Reform, Press Release, 7/15/08]

Chamber: "Virtually Any Type of Dispute... Can Be Addressed By Arbitration." An issue paper from the U.S. Chamber Institute for Legal Reform states, "Virtually any type of dispute between private individuals or entities can be addressed by arbitration, including, for example, contract, real estate, employment, and tort disputes." [U.S. Chamber Institute for Legal Reform, "Issues Resource Center," accessed 4/23/09]

Businesses Use Mandatory Arbitration To Protect Themselves Against Class Action Suits. In October 2008, the New York Times reported on a study that found businesses used mandatory arbitration in 75 percent of consumer agreements but just 24 percent of contracts overall, showing they were used to prevent class action lawsuits. The Times reported: "'I believe they're really using arbitration as a way of avoiding class action litigation,' said Theodore Eisenberg, a law professor at Cornell. Because it is not worth it to a single upset consumer to sue a big company, he said, 'the only thing those companies fear is your having a plaintiffs' lawyer aggregate you and people like you into a class action.'" [New York Times, 10/6/08]

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