After the Redskins’ Oct. 18 loss to the Kansas City Chiefs, a top team official sat down with Coach Jim Zorn. The message was that the coach would no longer be calling plays or have any real game-day duties. Then the official—presumably Vinny Cerrato—brought up Zorn’s contract and said, essentially, “This says we can do whatever we want to you, sucker!”
Yes, Snyder puts sucker clauses in the contracts of even the bigwigs in the Redskins organization. Little folks, too.
James Rubin, an employment lawyer based in Montgomery County, knows all about that. A group of six current and former Redskins ticket office employees had come to Rubin last season alleging that Snyder wasn’t paying them overtime wages. Rubin sent the team a letter outlining the situation and requesting the workers be paid what they’d earned.
If his clients weren’t made whole by the team, Rubin would file a lawsuit.
No, you won’t, responded the Redskins. The team told Rubin that the Skins workers had signed away their right to a day in court— a real court, anyway. The Redskins sent Rubin copies of the employment contract, which contained a so-called binding arbitration clause. The ticket workers’ only recourse, the contracts stipulated, would be to take their dispute to the New York–based American Arbitration Association.
That’s an organization that was hired by the Redskins. So the judge and jury deciding their fate would be paid for by Snyder. And the faux trial would be held behind closed doors, with no public record of the case. To show how much confidence the Redskins had in their hired court system: After receiving Rubin’s request for OT pay, the team fired any of his clients who were still on the payroll.
Turns out that as a condition of employment with the Redskins, the workers had given up their right to justice—at least, the sort of justice Americans take for granted. Rubin declined to discuss specifics of the situation, citing an April arbitration hearing. Since taking the case, Rubin has added another six former ticket office employees as clients. Their hearing will be held in the offices of the Redskins’ attorneys. Talk about a home field advantage. That’s the closest they’ll ever get to a trial, says Rubin.
A spring study on the general awareness of so-called binding pre-dispute mandatory arbitration clauses by a coalition of do-gooder groups, including Ralph Nader’s Public Citizen, found that 79 percent of likely voters believed they could take an employer to court even if they had agreed to such a clause. Only 11 percent understood that the right to use the courts could be taken away willy-nilly by an employer.
“People don’t know that they’ve signed that right away,” says Graham Steele, a lawyer and lobbyist for Congress Watch, another Nader confab. “We’re talking about a process that is all secret, by design, often with no public record, no published decision. Most people don’t know this situation even exists. And they can’t believe they don’t have these rights.”
And taking away employees’ ability to sue, as Snyder does, is totally legal. Steele says that laws allowing arbitration have been on the books since 1925, originally put in place to speed up the settlement of disputes between big corporations in matters like shipping. Banks and communications companies have been inserting binding arbitration clauses into consumer contracts for years: If you have a credit card or a cellphone, you’ve probably signed such a deal. Employers have caught on to the advantages of putting mandatory clauses in employment only rather recently, Steele says, and the Supreme Court’s decisions going back to the 1980s have strengthened their ability to do so.
Steele says there’s a simple reason why Dan Snyder or any employer would force arbitration on his workers: because he can.
“It’s an incredibly unfair advantage for the employer,” continues Steele. “We’re not talking about situations where arbitration systems are bargained for between a union and a corporation. We’re talking about clauses that are forced on workers, often in situations where the worker isn’t even aware he’s signed them. Say it’s a towel boy who has a claim against Dan Snyder; that means Dan Snyder has all the power once this goes to arbitration. Look at the situation: The arbitrator gets all his repeat business from Dan Snyder, not from the towel boy. Why wouldn’t the arbitrator rule in favor of that company that gives him repeat business rather than risk getting blackballed? In public courts, the Supreme Court has decided that judges that have a financial stake in the outcome of a trial should recuse themselves from that trial. But here, in private courts, with arbitrators, where that’s always the case, where the ‘judges’ always have a stake in the outcome, it’s fine.”
There is some movement to curtail the use of binding arbitration in the workplace. That comes from the case of Jamie Lee Jones, who in 2005 was a 20-year-old employee of Halliburton subsidiary KBR in Iraq. Jones claimed that she was imprisoned against her will and gang-raped by co-workers while overseas.
When she came home and reported the rapes, Jones learned from legal authorities that U.S. courts had no jurisdiction over whatever crimes were committed against her in Iraq. Then she was told that she had signed away her right to sue Halliburton for civil damages. The best she could do was to go to an arbitrator hired by Halliburton and ask for some money. “Imagine you find out that the person who is judging the case is working for the defense contractor itself,” says Jess McIntosh, a spokesperson for Sen. Al Franken (D-Minn.), who has taken up Jones’ cause.
Franken introduced an amendment to the Defense Appropriations Act of 2010 that would prohibit any defense contractors who receive U.S. government funding from forcing binding arbitration on their workers.
The Franken Amendment passed the Senate with 68 votes and has now gone to a conference committee. Franken has no plans to expand his anti-arbitration movement beyond the defense contractor realm, McIntosh says.
“Any attention we can get to the mandatory arbitration issue is good,” says Steele. “In America, with the economy being the way it is, you shouldn’t have to decide between taking a job that will put food on your table and having the rights we all expect to have.”
Though everybody admits the Jones case was heinous, the use of binding arbitration continues to have supporters outside the corporate realm. Chris Drahozal, who teaches arbitration law at the University of Kansas, says that research shows that binding arbitration hasn’t been as clearly negative for the common worker as the Nader group and others allege.
“Data I’ve seen shows that workers win in arbitration cases at about the same rate they win in court,” he says. “They may win a little bit less as far as the amount of their claim goes, but there’s also evidence that some employees who couldn’t afford to bring a claim in court might be able to bring a claim in arbitration. So the studies I’ve seen suggest arbitration may be a more accessible forum for workers. Employees win at the same rate, and they win a little less, but they can get a forum that they might not otherwise have, so it’s a trade-off.”
Calls to discuss the trade-off made by Redskins ticket workers went nowhere. David Donovan, the former Redskins general counsel and current chief operating officer, and team spokesman Karl Swanson didn’t respond.
Cerrato resigned under extreme pressure early on Dec. 18. Snyder held a press conference announcing the hiring of Bruce Allen as Cerrato’s replacement mere hours later. Perhaps Snyder didn’t want to give Allen much time to read the fine print in his contract.
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