Job arbitration lowers costs, restores justice in workplace - why more companies are asking employees to sign arbitration contracts - Column

0 Comments | Insight on the News, August 15, 1994 | by Llewellyn Rockwell, H., Jr.

Every day in America, every employer faces the prospect of disaster through bias complaints and lawsuits. Legal expenses easily can run $60,000 each. And if liberal lawyers can turn a class-action suit, bankruptcy threatens.

That's why, if you ask businessmen off the record, they'll tell you civil rights is a job killer. It's not the quotas these rights imply so much as the charge of discrimination itself. Nearly everyone can hurl this accusation except straight, white, ablebodied men.

Civil rights make employers afraid to run job ads. Business has to hire all victimized comers or risk a visit from Janet Reno. Instead, employers reveal the existence of new positions only to friends and close associates. Liberals say they don't like the old-boy network, but antidiscrimination law makes the network the only safe way to shop for workers.

Even mental illness is covered by the Americans with Disabilities Act. An employer cannot legally refuse to hire and cannot fire a person who is "otherwise qualified," according to the largest insane asylum in the world -- Washington. More than 10 percent of ADA complaints filed with the Equal Employment Opportunity Commission charge discrimination on these grounds.

But what is mental illness? The EEOC suggests we consult the Diagnostic and Statistical Manual of Mental Disorders, which notes that employers cannot discriminate against someone whose "personality changes over time," who shows "confused thinking" or who exhibits "consistent tardiness or absences." Also protected is someone who shows a "lack of cooperation or inability to work with coworkers...reduced interest in one's work...problems concentrating, making decisions or remembering." Before the ADA, these were reasons for sacking someone (unless he or she worked for the government). Today, they're "symptoms" that bestow rights that sane people don't have.

Employees are most likely to file discrimination complaints when the boss lets them go. Termination is humiliating, and thanks to our flawed natures, we want to blame anyone but ourselves. Employees rarely walk away from a job saying, "I've learned a valuable lesson; I'll never goof off again."

In the old days, people picked themselves up, brushed themselves off and started combing the want ads. These days, they call the EEOC. Women charge sexism; blacks charge racism; and anyone with a limp charges able-bodied bias.

The private sector has responded brilliantly to this assault with arbitration contracts. In many companies, new employees have to sign a promise to settle all job disputes by arbitration. If a person is demoted, "harassed" or fired and wants to protest, he or she must file and settle complaints in the magnificent legal system outside the government courts.

Arbitration lowers costs and prevents the absurdities of class-action suits. No wonder 100 large companies and many more small ones, too, already have made the switch. By some estimates, in five years half of all employees will be bound by such contracts.

Leave it to the feds to try to put a stop to a good thing. Liberals hate the privatization of civil-rights enforcement precisely because it tends to balance, just slightly, the scales of justice. Liberals want a world where employers have no rights and where any plaintiff hollering "discrimination!" -- and his or her lawyer too -- can retire in luxury.

Thus Sen. Russell Feingold, a Democrat from Wisconsin, has introduced antiarbitration legislation in the Senate, and Rep. Patricia Schroeder, a Democrat from Colorado, has copied him in the House. They would forbid arbitration contracts altogether, coercing business back into the state system. Just as business has found a way to restore some of the meritocracy of the firm, Feingold and Schroeder want to reimpose quotas and intimidation.

Ideally, antidiscrimination laws would be repealed and a free market in labor restored. Until that day, arbitration can help keep labor markets from entirely gumming up. Restoring employers' rights is the cause of liberty, and if the Republican Party is really pro-business, this is how to show it.