Most veterans, like most Americans, believe that our Constitution’s Seventh Amendment protects their right to a jury trial in federal court when employers break the law. Veterans returning to their jobs after service are in particular need of protection, as recognized by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which protects veterans’ reemployment rights and right to be free from discrimination because of their military service. Yet, because so many employers mandate arbitration, having a court or jury hear employees’ claims is increasingly unavailable.
Forced arbitration agreements in employment relationships have garnered needed attention in recent years, most recently by the in-depth reporting of The New York Times this month. Despite extensive lobbying and media attention, forced arbitration is growing. In 2014, 66 percent of U.S. companies had some form of arbitration clause for employees, customers, or both. Forced arbitration occurs when an employer conditions initial employment, continued employment, or receipt of employment benefits, including severance benefits, on the employee’s “agreement” to privately arbitrate all future claims against the employer. Under employment arbitration, parties go before a privately hired arbitrator, usually a retired judge or attorney, who listens to evidence and issues a decision without a viable avenue for appeal.
Arbitration as a private system for handling disputes is too often an uneven playing field for employees: arbitration can be prohibitively expensive; agreements typically bar employees from bringing their claims as a group in a class action, which is the only way for many employees to challenge well-funded employers; employers effectively control the arbitration process, including the selection of arbitrators and the rules of that govern the proceeding; and there is no appeal from a bad arbitration decision. Adding to this imbalance is the U.S. Supreme Court’s recent decisions that make it extremely difficult to get out of forced arbitration agreements or class action bans.
Servicemembers hoping to escape forced arbitration agreements to pursue their USERRA rights in court are unlikely to be successful. Recent case law in the Fifth and Sixth Circuits (as well as several district courts) have held that USERRA claims are subject to forced arbitration, in part because courts hold the statutory language of USERRA does not demonstrate a congressional intent to preclude arbitration.