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CNN: Law Students Won’t Accept Mandatory Arbitration Clauses

— June 20, 2018

An exclusive CNN story recounts how some law students are fighting back against the Supreme Court’s stance on mandatory arbitration clauses in employment contracts.

“This isn’t stuff you negotiate,” said one student, who’d received a job offer from a prestigious Silicon Valley law firm. “You go intern for the summer. You get a job offer, and you either go work for that firm or you’re jobless.”

Arbitration, writes CNN, is often conducted in private. Posited by some corporations as a quick and inexpensive way to settle disputes, the practice often comes at the cost of a prospective employee’s ability to sue. Settlements tend to be less rewarding than they’d be in court, often bound too by confidentiality agreements intended to retain a firm’s reputation in good standing.

The student interviewed by CNN said she didn’t question her mandatory arbitration clause at first.

Later on, she started thinking about the ramifications—about how so many #MeToo stories were brought by employers and politicians keen to keep scandalous cases from going public.

“What I don’t think should happen is having hundreds of law students walking into a situation where entire rights are obliterated,” she said. “You end up creating a world where these conversations aren’t even happening, and things are siloed off and quiet.

“That’s deeply dangerous.”

No matter the danger of mandatory arbitration clauses, American courts have continued to support their inclusion in employment contracts since the late 1990s. Today, reports CNN, they’re used to cap the rights of more than 50% of all private-sector, non-union positions in the United States.

Image of a legal gavel
Last month, the SCOTUS upheld the right of companies to continue including mandatory arbitration agreements in employment contracts. Legal Gavel; image courtesy of qimono via Pixabay, Public domain.

Last month, the Supreme Court upheld the legality of forced arbitration—prompting an uptick in interest from corporations.

“A lot of companies were waiting on the Supreme Court to see whether it was permissible or not,” Ron Chapman, an attorney with Ogletree Deakins, told CNN. “I’ve been on the phone nonstop since the decision came down.”

Arbitration clauses are found at every level of industry but tend to be more often included in contracts for higher-wage earners, like physicians and corporate managers. Nevertheless, even comparatively privileged employees tend to feel pressured.

“For 99% of employees, it’s not a choice,” said Cornell University professor Alexander Colvin. “It’s a company policy.”

Law school students and faculty have been particularly proactive in trying to cast off the confines of such policies. Earlier in the spring, recounts CNN, Harvard Law lecturer Ian Samuel called out a Los Angeles firm for forcing summer associates to sign arbitration agreements.

Caught in a controversial spot, the “major biglaw firm,” Munger Tolles, quickly rescinded its arbitration requirement and offered a public apology over Twitter.

Other firms followed suit, prompting law students from across the United States to petition their future prospective employers. Surveys sent out to hundreds of firms showed that roughly half had mandatory arbitration clauses in place—surprisingly, some of the nation’s largest refrained from the inclusion.

CNN cites Detroit-based Miller Canfield as one firm willing to reconsider its policy in light of mounting pressure.

“In light of concerns that arbitration more broadly has been used to conceal bad behavior, we are reevaluating our ongoing use of it for employment dispute resolution,” said Miller Canfield CEO Michael McGee. “The issue is part of a larger discussion about diversity within Big Law, and about success and opportunities for leadership in large law firms for minorities and women.”


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