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  • Appeals Court Rules Companies Cannot Impose Illegal Arbitration Agreements On Workers
    Posted On: May 29, 2016

    By JoAnne Powers, May 30, 2016

    In a major victory for American workers, the Seventh Circuit Court of Appeals in Chicago ruled Thursday evening that healthcare software company Epic Systems in Verona, Wisconsin could not require mandatory arbitration agreements where employees are forced to waive their rights to collective and class actions.  The court says such agreements violate Section 7 of the National Labor Relations Act, which sets out employee rights on the job.  Kaitlyn Madden is one of the lawyers who brought the Epic Systems case to the 7th circuit:

    [Kaitlyn Madden]: “one of those rights is the right to join with other employees to discuss with their employer issues of their compensation and their conditions of employment.  Arbitration agreements that require employees to bring any claims they have individually, prevents employees from joining together.  The history of the National Labor Relations Act makes clear that it’s very important to provide individual workers with a counterbalance to the power of the employer.  Allowing employees to join together is an important way to do that.”

    Arbitration agreements have recently been the focus of several major cases focusing on employee rights.  Tara Zoumer has filed a similar wage and hour case against officesharing company WeWork, which had all employees sign away their rights to not only class action claims but also the right to trial by jury:

    [Tara Zoumer]: “They shielded themselves from following federal and state labor laws.  To have paragraphs included that strip you of that right, that say that every person has to go up against this huge entity individually, and the arbitrators are paid for by the company…it’s just designed to be a flawed system putting the employee at a disadvantage.  It really is the privatization of the court system.  It robs people of their ability to fight a fair fight and have access to a jury of their peers.   As a citizen, that’s something I never want to give up.  Whether it’s sexual harassment, age discrimination, wage theft…all of these issues should go to court.”

    Thursday’s decision agrees in many ways with one the National Labor Relations Board has recently taken in a case against hardware chain Menards.  Seth Goldstein of the Office and Professional Employees International Union Local 153 in New York brought the case against Menard’s:

     [Seth Goldstein]: “These types of agreements are not agreements.  They’re basically adhesion contracts that are forced on employees when they work for employers.  There is no bargaining that goes on when an employee is told that they have to sign these agreements. And if they refuse to sign those agreements they lose their jobs.”

    The Seventh Circuit decision sets up a possible appeal of the case to the U.S. Supreme Court, as the Fifth Circuit in New Orleans recently ruled in favor of these agreements.  The new ruling gives Zoumer hope for her case and several others currently working their way through the courts:

     [Tara Zoumer]: “You talk to just about any average citizen and they say ‘there’s no way that’s legal,” but right now we don’t have anything protecting people.  So every single ruling from the NLRB, every single case that an employee is brave enough to bring against an employer that’s done them wrong, every one of those is important.”

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