Civil and Human Rights

CAC And Allies File Supreme Court Brief Challenging Unfair Arbitration Agreements

In a brief filed yesterday in Rent-A-Center v. Jackson, 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—urged the Supreme Court to 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 Antonio 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.

Antonio Jackson signed an agreement when he was offered a job at Rent-A-Center 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.  Jackson did not have a real choice about whether to sign this agreement; he was given no opportunity to negotiate its terms, and the failure to sign would have meant he would not get the job.  The terms of the agreement were lop-sided in favor of Rent-A-Center, particularly with respect to fees and discovery procedures.  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.

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 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.

While unfair arbitration agreements are a widespread and growing problem—pretty much every person who has a credit card or cell phone contract has unwittingly signed away his or her right to access the courts, just like Antonio Jackson did—they are particularly troubling in cases arising under civil rights statutes that were enacted to enforce the promises of freedom and equality in the Reconstruction Amendments.  The Civil Rights Act of 1866, which includes Section 1981, was specifically intended to ensure the fair administration of justice.

The framers of the Act knew that they could not achieve their goal of rooting out discrimination without an effective enforcement mechanism in a fair tribunal.  See, e.g., Cong. Globe, 39th Cong., 1st Sess. 1758 (1866) (statement of Sen. Trumbull) (arguing that the civil rights statute would only have force if it also created a clear mechanism of judicial enforcement).

Accordingly, the Reconstruction Congress took the then-extraordinary step of creating federal court jurisdiction for discrimination claims.  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).  See generally Report of the Joint Committee on Reconstruction Pt. II, 240 (1866) (noting that former slave owners were inserting into contracts “tyrannical provisions” that prevented freedmen from exercising their fundamental rights).

In our brief in Rent-A-Center, CAC and our allies explained that, to the extent employment discrimination claims are subject to arbitration, the Court must balance the national policy favoring voluntary arbitration with the national policy to eliminate discrimination in the workplace and the long-standing commitment to access to courts.  In order to effectively balance these public interests, the courts must ensure that employees’ federally-protected civil rights are subject to arbitration only when a valid arbitration agreement exists.  When the validity of the arbitration agreement is in question, courts should determine whether the agreement should be enforced in the face of a claim of unconscionability.

Regardless of what the Supreme Court does in Rent-A-Center, there is a larger question, of course, of whether it is appropriate under any circumstances to require victims of discrimination to sign away their right to access the courts in a pre-dispute arbitration agreement.  The Supreme Court has been notoriously pro-arbitration for the past several decades, but fortunately there has been interest in Congress in passing legislation to prohibit pre-dispute arbitration agreements in employment and consumer contracts.  We will continue to provide updates and important context on mandatory arbitration and the struggle to preserve access to justice.  As a first step, it will be informative to see how the Supreme Court handles argument on April 26 in Rent-A-Center.  Please check back with Text & History later this month for our argument preview and analysis.

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