Arbitration between employees and employers favors employers’ interests at employees’ expense. Ostensibly, arbitration merely requires that any employment claims be litigated in a private forum; in reality, it discourages employees from suing their employers because, as compared to litigation, employees are less likely to win and generally recover lower damages. As such, many employers require their employees to sign arbitration agreements.
Indeed, a report from the Economic Policy Institute has found that, since the early 2000s, the number of workers subject to mandatory arbitration has more than doubled, covering 60 million U.S. private-sector non-union workers. These agreements prevent 55 percent of U.S. workers from accessing the courts to protect their employment rights. This figure increases to 65.1 percent among large companies—those with 1,000 or more employees. Of the employers who require mandatory arbitration, 30.1 percent also include class action waivers in their procedures—meaning that about 25 million employees also lose the right to address widespread employment rights violations through class action. For large companies, the number of employees subject to class action waivers increases to 41.1 percent. In total, 23.1 percent of private-sector non-union employees no longer have the right to bring or participate in a class action against their employers.