Arbitration Fairness and Rape

updated See CL & P Blog for in-depth update on the hearings for arbitration fairness.

Congress had another subcommittee hearing on the Arbitration Fairness Act. The Consumerist live blogged the hearing, accompanied by the expected pithy comments. Senator Brownback kept harping on the Kansas Fence Law.

HomeOwners for Better Building publishes an opinion piece by Susan Antilla from Bloomberg, which had some very interesting information.

When Theodore Eisenberg of Cornell Law School and Geoffrey Miller of New York University School of Law studied the arbitration policies of 2,800 public companies during 2002, they found that companies were using arbitration for 37 percent of their employment contracts, but weren’t so keen on arbitration when it came to business-against-business fights between “sophisticated actors.” In all, 11 percent used binding arbitration for some contracts.

It was surprising that companies would assert that they liked arbitration’s low cost and simplicity, they wrote, yet opt for the courts when they were in disputes with other businesses.

Feingold suggested a possible reason at yesterday’s hearings, calling arbitration an “unaccountable” system where the law doesn’t necessarily apply.

Consumer crusaders echoed Eppenstein’s assertions at the Senate hearing. They are fighting powerful forces, though. The newly formed Coalition to Preserve Arbitration already has submitted testimony applauding the virtues of arbitration to both houses of Congress.

Mandatory arbitration doesn’t deprive anyone’s rights, the group said in testimony, reflecting the opinion of 19 coalition members including Sifma, the U.S. Chamber of Commerce, the American Health Care Association and T-Mobile USA.

When it’s their turn to sue, though, you rarely find corporate heavyweights racing to arbitration. The grade schooler might ponder this question after learning about those branches of government: If arbitration works so well, why don’t corporations use it when they have a complaint?

So, when corporations want to sue other businesses of equal or greater economic strength, they rush to the court systems, rather than choose arbitration. Huh, how about that. Makes you wonder about their motivations when they want to force arbitration on their customers/employees.

The Hill writes that all this legislation is part of a string of similar legislation occurring now, because of the Democrats and the American Association of Justice–that’s the trial lawyer association–finds the climate more positive to put forth their their unreasonable demands. What are some of these demands? Requiring drug makers to add safety information to drug labels and forcing courts to release vital safety and health information from court cases where the transcripts are sealed–the lousy bastards.

The Pro-mandatory arbitration group, especially National Arbitration Forum–My nominee for biggest corporate scum on earth is now trying a different tactic, since the ‘fairness’ of the arbitration process has been, more or less, blasted out of the waters. Now they’re saying if mandatory arbitration is abolished, the court systems would be overwhelmed by cases.

First, arbitration not only requires the court system, it can require it twice: once to enforce a mandatory arbitration agreement that is disputed, and the second time to uphold an arbitration decision. In fact in these cases, the results are more likely to go up through the chain of appeals than typical civil cases. They’ve been in the Supreme Court several times. So, eliminating mandatory arbitration agreements and returning arbitration to its voluntary status will, most likely, decrease the burden on the court system, rather than burden it. And hey! If arbitration is so great, people will volunteer for this alternative, right?

The biggest news on the mandatory arbitration front last week, though, was the story of Jamie Leigh Jones.

Jamie Leigh Jones was a contractor hired by Halliburton/KBR for work in Iraq. Not long after arriving in Iraq, she was brutally raped and held against her will by KBR employees–kept in a shipping container and told if she didn’t keep quiet, she’d never get a job in Iraq or back home. The only reason she escaped is one of the KBR employees guarding her lent her his cellphone, and she called her Dad. Her Dad, in turn, called his Congressional representative, Representative Ted Poe, a Republican from Texas. Poe got the State Department to go over and rescue her.

That was two years ago. Why no criminal charges? For one, the Congressional bill giving immunity to contractors in Iraq would have prevented such justice.

Legal experts say Jones’ alleged assailants will likely never face a judge and jury, due to an enormous loophole that has effectively left contractors in Iraq beyond the reach of United States law.

“It’s very troubling,” said Dean John Hutson of the Franklin Pierce Law Center. “The way the law presently stands, I would say that they don’t have, at least in the criminal system, the opportunity for justice.”

In addition, neither the Justice department nor the State department investigated the crime. Why? Because it was left in the hands of KBR to investigate the crime. The company who has shown itself to be so fair to women. The same organization that promptly ‘lost’ the rape kit collected after Ms. Jones was rescued, and who has, since, not done a thing about the crimes against this young woman.

In a statement, KBR said it was “instructed to cease” its own investigation by U.S. government authorities “because they were assuming sole responsibility for the criminal investigations.”

Halliburton has since divested itself of KBR and says it shouldn’t be named in the suit. Na ah, Halli, you were involved at the time of the crime. Since Halliburton/KBR weren’t interested in punishing those who perpetuated this crime, Ms. Jones sought the only justice she could: in civil courts. But guess what?

Since no criminal charges have been filed, the only other option, according to Hutson, is the civil system, which is the approach that Jones is trying now. But Jones’ former employer doesn’t want this case to see the inside of a civil courtroom.

KBR has moved for Jones’ claim to be heard in private arbitration, instead of a public courtroom. It says her employment contract requires it.

In arbitration, there is no public record nor transcript of the proceedings, meaning that Jones’ claims would not be heard before a judge and jury. Rather, a private arbitrator would decide Jones’ case. In recent testimony before Congress, employment lawyer Cathy Ventrell-Monsees said that Halliburton won more than 80 percent of arbitration proceedings brought against it.

NAF has company for scummiest corporation on earth.

The Daily Kos is running a campaign to get people to contact their congressional representatives and urge them to support the Arbitration Fairness Act. Right now, 60 congressional delegates have signed on as co-sponsors but the battle is far from over. The heaviest corporate hitters are turning their might to defeat this bill.

There has never been another act in Congress that so divides Corporate America from Citizen America. There has never been another act that can return justice to more people than this act. People like Jamie Leigh Jones. People like you and me.

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5 Responses to Arbitration Fairness and Rape

  1. Bud Gibson says:

    I have to say I agree with you about 1000% on this one. I read Jones’ story on Daily Kos, and it’s shocking, unfortunately like most things in Iraq these days. It’s not just what allegedly occurred but the idea that what occurred is somehow not subject to any law anywhere.

    More generally, it’s a story of the strong bullying the weak. We’re not living in a corporate aristocracy.

    BTW, the mosaic picture with the cross in the center is great. Weren’t you supposed to be laying off blogging?

  2. Shelley says:

    After I finish editing the book. Blogging is a necessary break for me. Afterwards, though, I’m putting my keyboard down and getting lost in the woods.

    That’s one of the churches here. Has the second largest collection of mosaics in the world.

  3. More generally, it’s a story of the strong bullying the weak. We’re not living in a corporate aristocracy.

    Umm… most aristocracies are typified by the strong bullying the weak (or at least the privilege to do so), so I’m not sure what to make of your argument.

    The system of global corporate feudal serfdom continues to grow, even as organizations arranged along more dynamic lines are starting to nip at their heels. I have a feeling we’ll start seeing a real showdown in a decade or two.

  4. Shelley says:

    It’s odd you saying that. The only thing I agree with Greenspan on, is that we’re heading towards a populist showdown, a revolution because of the growing disparity by the few haves and the many have nots.

    If corporations were smart now, they’d think about backing off on some of their rampant greed. But, as we know, most corporation are not led by smart people.

  5. It’s wrong to think of corporations as entirely under the control of their officers. A corporation is an organism, about as complex (and moral) as a slime-mold, with a single tropism toward profits. In many cases, corporations are punished by the market if their officers do the right thing (Qwest initially refusing the illegal NSA wiretapping come to mind), leading those officers to be replaced.

    If a fine for breaking the law (adjusted by it’s probability) is smaller than the profits (also adjusted the same way) a company gets by breaking it, you can argue that an officer is failing his fiduciary duty to shareholders if the company does not break the law.

    Markets are powerful tools, and I don’t think they should be abandoned wholesale, but it is becoming clear just what the sort of things the market (and the amoral corporations that inhabit them) is bad at, and ‘backing off’ as you suggest is definitely one of them. They can’t.

    Instead, we’ll have to (through political processes) reform the market by redefining the boundaries, and possibly doing a little natural selection through weeding out the worst actors by revoking their charters or denying them business (such as govt. contracts).

    It’ll be messy, and I’m sure a lot of corporate officers will end up going to jail, but that won’t actually be the point (or, put it another way, if we *let* that be the point, we will have failed to change anything (eg. Enron)).