Thanks to historic inflation, a full one in six retirees is considering returning to work. And while Congress could improve the lives of elderly Americans by fixing the looming Social Security crisis, easing regulations that drive up the cost of housing, or incentivizing up-skilling and job training, members of the House and Senate have decided instead to use the elderly as pawns.
Say hello to the “Protecting Older Americans Act,” endorsed by plaintiffs lawyers, which would prohibit employers from using arbitration agreements to adjudicate age discrimination claims (which applies to people over age 40, to the extent you consider that old). To be clear: ending arbitration agreements has nothing to do with protecting or otherwise helping older Americans. It achieves the opposite.
Arbitration is a fancy word for resolving disputes out of court. In arbitration, victims can pursue all of the same civil remedies they could otherwise bring in a formal court proceeding. It presents very real benefits for older workers. Employees who bring their grievances to arbitration typically have their cases resolved more quickly than if they sued in court. Victims are also more likely to win and collect more money in arbitration than in court.
Because arbitration does not require lengthy and expensive litigation, workers can often navigate the process without a lawyer. Nor do they need to wait until a critical mass of similarly-situated employees are harmed to bring a class action.
This streamlined process is also beneficial for businesses, which can use the time and money they save on lawyer fees to hire more workers, award a bigger payday to a harmed employee, or make affordable products that older Americans want or need.
If employees, businesses, and Americans win, then what’s going on? Swampy politics.
Plaintiffs lawyers give millions each year to candidates—97% Democrats—to achieve their top priority: ending arbitration agreements. (They gave to two Republican Senators, and unsurprisingly, one co-sponsored the legislation.) Without arbitration, employees can only bring cases where they can afford a lawyer or where the volume of claims allows a lawyer to take the case on contingency, i.e. take a huge chunk of each employee’s payday. And without arbitration, employers must lawyer-up with expensive outside counsel. In other words, lawyers win, no matter the outcome for the victims. No wonder ending arbitration is the trial lawyers’ lobbying priority.
Supporters of the bill caricature arbitration as a hidden process where victims lose their rights. And they bemoan that arbitration agreements are a glazed-over part of employment contracts. Arbitration does not have all the procedural bells and whistles of litigation, and purposefully so. Our courts are slow and bogged down. There are currently more than 760,000 cases pending before the U.S. district courts. Recognizing the nightmare of litigation, Congress and the Supreme Court have long favored arbitration as an alternative mode of dispute resolution. Preventing employers and employees from resolving disputes this way does not mean that more victims will be vindicated. To the contrary, it means victims will be kept waiting.
And sure, arbitration agreements appear in legal contracts, alongside your salary, vacation policy, and limits on subcontracting. Just because terms are boring does not mean employees lack the power to influence them, as recent experience confirms: Google amended its arbitration policy for sexual harassment in 2018, in response to employee complaints.
This administration has done enough to harm older Americans living on fixed incomes. Trial-bar-funded politicians should not double down by punishing older Americans forced into the workplace too.