The Michigan Court of Appeals ruled last week that employers can prevent worker lawsuits by requiring that employees sign away their rights to a jury trial and accept arbitration instead.
In a 4-3 decision, the court ruled in Rembert vs. Ryan’s Steakhouse that employers can insist job applicants agree to go to binding arbitration instead of court should the employee ever decide to sue.
The case involves John Rembert, a brain-injured Flint restaurant worker who tried to sue his former employer, Ryan’s Steakhouse, for allegedly discriminating against him because he is disabled and black. The restaurant stopped the case from going to court, saying Rembert relinquished that right when he signed a pre-employment agreement requiring him to accept binding arbitration instead.
Diane Akers, attorney for Ryan’s Steakhouse, said the ruling doesn’t infringe on the rights of workers. "Employers set the conditions and terms of employment, the employee doesn’t have to take the job if they don’t want to," she said.
Akers said that arbitration is often preferable to court because it is cost efficient and timely compared to litigation, which can stretch on for years.
Rembert’s lawyer, however, said the ruling is dangerous for the state’s workers.
"In the state of Michigan, any employee can be required to give up a jury trial to go to limited arbitration," said attorney Deborah Gordon. The secretive nature of arbitration can work against employees, especially when their employers choose the arbitrator.
"There’s no public access, documents or published case law. Arbitration can be selected by the company, and not for a minute would it be neutral. I think the whole thing is ridiculous, but that’s what the panel said."
Others echoed Gordon’s fears.
"The implication of an arbitrator being picked by and paid for by an employer as being anywhere near as fair as a jury of our neighbors is absurd," said Gary Fralick, communications director for the Michigan Trial Lawyers Association. To force a prospective employee to choose between working and giving up their right to a jury trial if they are ever discriminated against "is downright scary," Fralick said.
State Rep. LaMar Lemmons III (D-Detroit) is working on legislation to amend the Elliot-Larsen Civil Rights Act to protect prospective employees.
"Under these current conditions, the employer picks the arbitrator, and that’s an automatic conflict of interest," said Lemmons. "That’s why we have the courts. Are we going to replace the courts with arbitrators in these situations?"
He said his amendment would prevent an employee’s rights from being "waived away by contract or preconditions of employment or in lieu of arbitration as opposed to litigation."
George Bashara, a former appeals court judge and a specialist in arbitration with Detroit’s Clark Hill law firm, said employees have the right to assist in selecting an arbitrator for their case.
"It’s necessary for the employee to help pick the arbitrator, or otherwise it may not be valid," said Bashara.
Bashara said that although binding arbitration cannot be appealed, "You don’t give up any rights if you have a neutral party deciding the dispute."
