Civil and Human Rights

Argument Preview: Rent-A-Center v. Jackson & Forced Arbitration of Civil Rights Claims

The Supreme Court on Monday will hear argument in Rent-A-Center v. Jackson, a case raising the question of whether civil rights plaintiffs have the right to access federal courts in order to argue that a pre-dispute mandatory arbitration agreement is so unfair that it is “unconscionable,” and therefore unenforceable.  As discussed in this previous Text & History post, Rent-A-Center argues that this unconscionability determination should be made by the arbitrator, if that’s what the arbitration agreement provides; Antonio Jackson argues that a federal court needs to determine first whether he meaningfully agreed to arbitrate his claims before he should be forced to give up his right to access the courts.

While the parties hotly dispute the legal outcome of the case, they generally agree on the underlying facts.  When Antonio Jackson was offered a job at Rent-A-Center, he signed an agreement that required him to give up his right to access the courts in the event of a future claim against his employer, and instead submit any and all future claims to a private arbitrator.  As most of us who have been in a similar situation—whether applying for a job, visiting a doctor, or obtaining a credit card—will immediately appreciate, Jackson did not have a real choice about whether to sign this arbitration agreement; he was given no opportunity to negotiate its terms, and the failure to sign would have meant he would not get the job.

Later, when Jackson believed he had been subjected to racial discrimination as an employee at Rent-A-Center, he sought to bring a claim in federal court under Section 1981, a statutory provision originating in the Civil Rights Act of 1866 that prohibits racial discrimination in contractual relationships, including employment.  He argued that the arbitration agreement he signed was “unconscionable” in that it was unfair and was forced on him by his employer, and that he had not meaningfully agreed to give up his right to go to court.   Rent-A-Center argued that even this threshold question of whether there was a valid, fair agreement to arbitrate must be considered by an arbitrator, not a court.

It is not that Jackson wants to go to federal court because he thinks it is merely a “better” forum than private arbitration.  Rather, he argues that the terms of the arbitration agreement were crafted to be lop-sided in favor of Rent-A-Center, particularly with respect to fees and discovery procedures in the arbitration forum.  In addition, corporate employers like Rent-A-Center are repeat players in the arbitration system and their continued patronage keeps arbitrators in profitable business, which means that arbitrators may well be predisposed in the employers’ favor.

While these suggestions of general corporate bias in arbitration may, to the average person, seem deeply troubling, the Supreme Court has dismissed such claims as indications of bias against arbitration in general, which the Court sees as a major no-no under the “pro-arbitration” policy that Congress established in the Federal Arbitration Act.  It will be interesting to see how much this theme gets pushed in oral argument on Monday—important amicus curiae briefs, such as the one filed by the U.S. Chamber of Commerce in support of Rent-A-Center, argued aggressively that “unconscionability” claims are nothing more than attempts to avoid arbitration altogether, and contended that many courts that find arbitration agreements unconscionable are merely giving vent to their anti-arbitration bias.

The problem with the Supreme Court’s current pro-arbitration stance is that it goes far beyond what Congress intended when it enacted the Federal Arbitration Act (FAA).  The federal pro-arbitration policy that is embodied in the FAA simply means that if two parties have entered into a valid, consensual agreement to arbitrate, the courts must then construe the scope of that agreement just like any other contract.  There is textual and historical evidence that Congress meant to safeguard the ability to choose arbitration instead of court proceedings for commercial partners making contractual decisions from similar positions of bargaining power and sophistication.  There is also textual and historical evidence that Congress did not intend to include within this “pro-arbitration” policy employment contracts like the one involved in this case.

Perhaps more important, the FAA is not the only relevant statute for the Court to consider when it takes up this case on Monday.  Jackson’s underlying claim—the merits of which are not yet at issue—arises under Section 1981.  The Civil Rights Act of 1866, which includes Section 1981, was enacted to enforce the promises of freedom and equality in the Reconstruction Amendments—the 13th, 14th, and 15th Amendments—and, in particular, the fair administration of justice.

The Civil Rights Act of 1866 was decidedly pro-federal courts.  Noting the virtual impossibility of an emancipated slave or Unionist obtaining a fair trial in former slave-holding states, Senator Sherman spoke in support of the Civil Rights Act, observing, “To say that a man is a freeman and yet is not able to assert and maintain his right in a court of justice is a negation of terms.”  Cong. Globe, 39th Cong., 1st Sess. 41 (1866).  Senator Trumbull stated plainly: “It is a court bill; it is to be executed through the courts, and in no other way.”  Id. at 605.

The Supreme Court is unlikely, based on recent pro-arbitration precedent, to invoke Trumbull or Sherman during questioning on Monday.  But we do hope that the Court is mindful of the context in which Antonio Jackson’s arbitration dispute arises.  As argued in the brief filed in this case by CAC and a coalition of civil rights organizations—the Lawyers’ Committee for Civil Rights Under Law, the Alliance for Justice, the Asian American Justice Center, the National Partnership for Women and Families, and the National Women’s Law Center—the Supreme Court must ensure that civil rights claimants have access to federal courts unless they have meaningfully agreed to have their claims heard by a private arbitrator.  Individuals should not be unfairly forced to give up their right to seek justice in the court system, particularly when their claims, like Jackson’s, arise under a statute like Section 1981, which was expressly crafted by our Reconstruction framers to guarantee fair tribunals for victims of discrimination.

 

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