EPI Supports New Legislation Banning Mandatory Arbitration in Labor and Employment Matters

Over the last several decades, more and more workers have become subject to mandatory arbitration agreements and class action waivers. When workers are forced to handle workplace disputes as individuals through arbitration, rather than being able to resolve these matters together in court, it is difficult, if not impossible, for workers to enforce their rights. These agreements bar access to the courts for all types of employment-related claims, including those based on the Fair Labor Standards Act, Title VII of the Civil Rights Act, and the Family Medical Leave Act. This means that a worker who is not paid fairly, discriminated against, or sexually harassed, is forced into a process that overwhelmingly favors the employer--and forced to manage this process alone, even though these issues are rarely confined to one single worker.

Yesterday, Representatives Nadler (D-NY) and Scott (D-VA) introduced legislation to ban mandatory arbitration and class and collective action waivers in labor and employment matters. The legislation will be introduced by Senator Murray (D-WA) in the Senate. The Restoring Justice for Workers Act is a crucial first step towards shifting the balance of power between employers and employees and ensuring that work is fair from day one.

Mandatory arbitration clauses and class and collective action waivers are part of a long and growing list of tactics used by employers to keep workers' bargaining power weak and their wages down. While many policymakers are searching for a single big idea to jumpstart stagnant wages, it's important to realize that worker power has been eroded by a series of policy choices and it is only by reversing these moves, one by one, in Congress, at the ballot box, and in the courts, that workers will once again have the power to negotiate for higher wages and better working conditions.