I’m not sure how I missed this story but maybe many of you did as well. Two weeks ago Sen. Al Franken introduced an amendment to the 2010 Defense Appropriations Bill that would withhold defense contracts from companies like Halliburton if they forced employees into arbitration, rather than allowing criminal and civil suit, in cases of sexual assault, abuse, harassment, and other forms of unlawful job discrimination. The action arises out of the case of Jamie Leigh Jones who has charged other employees of Halliburton, and its former subsidiary KBR, with rape, assault, false imprisonment, intentional infliction of emotional distress, and more. Franken’s amendment passed on a vote of 68-30 with all the nays coming from Republicans (though all four female Senate Republicans voted yea). Many are questioning the rationale for a no vote and many Dems see political opportunity.

In 2005, just 4 days after she arrived in Iraq to work for Halliburton, Jones alleges (and all the details to follow are “alleged” because the facts have not been aired in court) she was out with firefighters from KBR who drugged her cocktail, took her back to her barracks and raped her repeatedly. She awoke to find herself beaten and battered and with one of the attackers asleep in the room. Jones was taken by security officers to a clinic where a rape examination was performed by a US Army doctor and the evidence kit was then handed over to Halliburton security. The kit was lost for two years and when it was recovered much of the critical evidence, including photos of Jones, was gone. When she reported the attack to her supervisors she was placed under guard in a shipping container for over 24 hours where she was held without food or water. She was threatened with her job if she reported the incident or left Iraq to receive medical care. A sympathetic guard finally gave her a cell phone which she used to call her father. Help arrived from the State Department shortly thereafter.

Jones sought to take legal action against her attackers in criminal court but Halliburton/KBR, pointing to the clause in her contract requiring all employee disputes to be addressed in arbitration, prevented her from proceeding. How a rape can be considered an “employee dispute” is beyond me! She then sought to sue Halliburton/KBR in civil court and faced the same defense – she can’t sue. Four years later Halliburton and KBR (which separated in 2007) are still fighting her. Finally, a court ruled last month that the arbitration clause in her contract did not prevent the companies from being sued on the stated charges but a trial date is still a ways off.

So what’s going on here? A few things but let’s start with arbitration. The argument for arbitration is much like the argument for tort reform. Corporations see arbitration as a means of reducing both the number of law suits filed against them and the high expense of handling the cases, and lowering the risk of high payouts. Whether we know it or not many, if not most, of us have signed forms that commit us to binding arbitration in the case of a dispute whether as an employee, a patient, or a customer. Take a look at the terms and conditions of your credit cards or cell phone – if you have a dispute you’ve probably agreed to have it resolved through arbitration. In arbitration an “independent” mediator hears the details of the case and decides on a fair outcome. The problem is that the arbitrators are chosen by the company, they’re paid by the company, and if they issue decisions inconsistent with the company’s wishes they will get no further business. And if you lose, you’ll probably have to pay the company’s legal bills in addition to your own. Not a very fair or level playing field is it?

Al Franken introduced a bill that would deny defense contracts to companies that required employees to surrender their constitutional right to jury trial in cases of sexual assault or harassment, assault and battery, false imprisonment, and intentional infliction of emotional distress. Now, this does not seem especially controversial and Franken probably thought his bill would pass easily. As a new senator you want to score an easy, early victory to establish your credibility with your colleagues. So when 30 Republican senators voted to oppose the amendment antennas went up. Jon Stewart delivered a particularly clever and biting commentary ripping the GOP for getting up in arms and banning all Federal funding for ACORN because some idiotic employees helped to create legal fictions permitting the establishment of an imaginary whorehouse whereas the GOP was quick to turn away from banning funding to defense contractors that actually allow rapes to take place, deny the victim the right to sue the attacker or the company, and then assist in covering up the incident through false imprisonment and threats. Hard to argue with that, isn’t it?

But just to be certain I had the facts correct I checked with the opposition to see if I was missing an important part of the argument. The conservative Heritage Foundation has a post on “The Truth About the Franken Amendment” that begins “When a disgruntled employee files a lawsuit that goes to court his employer must pay tens or hundreds of thousands of dollars in legal fees….Guilty or not guilty, the employer loses money that could have been used to expand operations and hire workers.” Wow! The article is a condemnation of “rogue employees” who use the legal system to threaten nuisance lawsuits seeking large settlements. Arbitration, it claims, saves the company money to create new jobs and protects employees’ legal rights. There’s not much concern for employees with legitimate grievances who are underserved by arbitration or with the legal right to a jury trial. The point is the harm lawsuits do to a company. Before reading the article I had issues with the Franken amendment; but the callousness of the counter-argument really left me cold.

The Franken amendment is very broad and, in fact, I deliberately omitted a very important part of the claims it is meant to cover. In addition to the issues faced by Jones the amendment would also include “any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of…. negligent hiring, supervision, or retention.” (italics added). Franken’s addition of the italicized portions has received almost no play in the press (should I say the “liberal press?”). They essentially encompass the vast majority of employee grievances including termination or discrimination based on sex, religion, age, disability, or minority status. These become irrelevant because the arbitrator is under no obligation to consider all the merits of the claimant. Franken’s amendment, therefore, effectively bars defense contractors from imposing binding arbitration on employees under any circumstances. The Supreme Court, however, has ruled that arbitration is a legitimate process. Unfortunately, Jeff Sessions was the only senator to touch on this point and he did it badly by first saying “the Congress should not be involved in writing or rewriting private contracts.” That’s just nonsense when the contract in question infringes on individual constitutional rights. So now what?

Arbitration needs a close look. A company has every incentive to impose arbitration whenever and wherever possible in order to protect themselves from lawsuits both frivolous and legitimate. Opponents look on banning arbitration as another gift to well-connected trial lawyers. Arbitration and tort reform share the desirable goal of reducing corporate exposure to frivolous lawsuits but they may also share the goal of denying justice to people with legitimate grievances. The case of Jamie Leigh Jones hardly seems trivial or frivolous and, if Franken’s purpose is to address her case, then he should probably drop the broader language when the amendment comes before the House or to conference for reconciliation. But on review, at least as it concerns employee complaints related to established laws on discrimination, I cannot support arbitration and I sincerely hope a broader bill denying this procedure nationwide will follow.

Tags: Al Franken, Arbitration, Discrimination, Franken amendment, Halliburton, Jamie Leigh Jones, KBR, Tort Reform

This entry was posted on Wednesday, October 21st, 2009 at 12:22 pm and is filed under News/Politics. You can follow any responses to this entry through the RSS 2.0 feed.