Congress Takes Aim at Age Bias, Arbitration in Workplace

October 8, 2009
Congressional Democrats at a Senate hearing Wednesday, October 7, underscored their intent to bolster age discrimination protections and trial rights that they say the Supreme Court has limited.

Sen. Patrick Leahy, D-Vermont and chairman of the Senate Judiciary Committee, took aim at two court rulings—one from the 2008-09 term that shifted the burden of proof in age discrimination cases from the employer to the employee and another from early in the decade that strengthened employment contract arbitration.

“The Supreme Court’s recent decisions make it more difficult for victims of employment discrimination to seek relief in court, and more difficult for those victims who get their day in court to vindicate their rights,” Leahy said at a committee hearing. “These decisions will encourage corporations to mistreat American workers in a still-recovering economy.”

The hearing occurred one day after Leahy introduced legislation would overturn the age discrimination decision that the Supreme Court handed down in June in Gross v. FBL. The court held that the plaintiff, Jack Gross, had to prove that age was the only reason he was demoted from his job as a vice president at the insurance company Farm Bureau in Iowa.

Leahy asserts that the Supreme Court rewrote the Age Discrimination in Employment Act by ruling that age must be a deciding factor, not just one of many factors, in an employment decision in order to invoke age protections.

Leahy also assailed the Supreme Court for misinterpreting the Federal Arbitration Act in the case Circuit City Inc. v. Adams.

“Now, after the Circuit City decision, employers are able to unilaterally strip employees of their civil rights by including arbitration clauses in every employment contract they draft,” Leahy said.

A bill introduced this year, the Arbitration Fairness Act, would make an arbitration agreement invalid if it requires arbitration of an employment, consumer, franchise or civil rights dispute.

Prospects for both bills are good, considering that Congress successfully overturned a Supreme Court ruling on pay discrimination earlier this year. Democrats have a filibuster-proof 60-person Senate caucus and control the White House.

The Gross case focuses on trial procedure, such as jury instructions about whether age is a “motivating factor” or the sole cause of an employment decision.

The Supreme Court ruling made it easier for companies to win age discrimination cases, said Neal Mollen, a partner at Paul Hastings in Washington. They likely will now prevail more often in summary judgment. But they still face danger if the case goes to trial.

“The value of the Gross decision for employers is at the motion stage,” Mollen said. “If the jury really thinks that age discrimination is involved, the employer will have a very hard time prevailing.”

The arbitration portion of the hearing, however, produced the fireworks—or at least smoldering senatorial embers.

Mark de Bernardo, a partner at Jackson Lewis in Reston, Virginia, said that arbitration provides an alternative to court appearances and results in better outcomes for employers and employees.

The Senate arbitration bill would “effectively end arbitration in America in both employment and in other contexts,” de Bernardo said in prepared testimony.

But another witness told a wrenching story about being drugged, assaulted and raped while working for Halliburton in Iraq. Jamie Leigh Jones said that her contract forced her to submit the case to mandatory binding arbitration rather than going to court.

“Corporations are able to have more power than individuals, and I don’t think it’s right,” Jones said.

Sen. Al Franken, D-Minnesota, took up her cause and pressed de Bernardo to justify his defense of arbitration. It was difficult for de Bernardo to argue that Jones’ case was a tragic anomaly, as Franken mostly insisted that he give “yes/no” answers to his queries.

“She has not had her day in court, sir,” Franken said. “This is the result of your binding, mandatory arbitration, Mr. de Bernardo.”

A majority in Congress is likely to agree with Franken.

“We’re going to see some kind of legislation that either prohibits or radically limits the use of pre-dispute arbitration agreements,” Mollen said.

—Mark Schoeff Jr.

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