Posts Tagged ‘mandatory arbitration’

Supreme Court Deals Worker Rights Another Blow

The fight for worker rights took another blow today.  The Supreme Court ruled employees at a California company could not band together in an effort to get compensation from their employer for a breach of their data.  The 5-4 decision put yet another limitation on the ability to use class arbitration and class actions against bigger, more powerful opponents.

Attorney Dave Scher, head of the James Hoyer Employment Law Division, says the decision is disappointing but “really not surprising, given the conservative shift on the Court.”  Recent rulings have chipped away at employee rights and, unfortunately, this will make it even more difficult for employees to tackle joint grievances in the workplace.

“It impacts any issue where employees band together to fight unfair circumstances in their workplace—not paying overtime, underpaying tips, break times, not getting benefits they’re entitled to—things like that,” Scher explained.

Forcing Individual Arbitration

The ruling helps allow companies to ban class action lawsuits and class arbitration proceedings to address disputes; instead, forcing employees to bring their cases on an individual basis.  It essentially creates a divide and conquer scenario for companies to take away the “strength in numbers” individuals can get by working together.

Attorney Dave Scher

“It allows corporations to take advantage of low-income employees and prevents them from being held accountable for improper practices,” Scher said.  “They do what they want, because they know there’s really nothing these employees can do about it.”

It’s cost prohibitive in most cases for employees to bring individual cases for claims that don’t amount to large sums, even if the collective damage to all employees is large.  Class actions and class arbitrations are supposed to help even the playing field for employees and consumers by spreading out the costs, but that gets harder now with this ruling.

“Companies can afford to fight, but an individual with a $1,000 or $5,000 claim can’t afford it.  They can’t pay a lawyer to help them, and the way it’s now structured, many lawyers can’t afford to bring the case, because they won’t recoup their costs.”

According to the Economic Policy Institute, nearly 54-percent of non-union, private sector employers require mandatory arbitration clauses and 65-percent of large companies with more than 1,000 employees have them.  These arbitration agreements require workers to give up their rights to have disputes settled in a court of law. They are often a take-it-or-leave-it deal, where if you don’t sign, you don’t get the job. Unfortunately, many don’t even realize the rights they are giving up and that it puts them at a significant disadvantage should a dispute arise.

What can you do about it?

Some employment attorneys are developing a head-on approach to tackle “class” bans by filing large numbers of arbitration cases, one by one.

“Creative employment lawyers are saying—‘Fine, instead of having a class, I’ll find a thousand workers who fit into this category, and I’ll represent each of them. And I’ll bring a separate arbitration claim for each of them, and you’re going to have to pay for the cost of each of those arbitrations.’ And that is having some degree of effect,” Scher explained.

In other words, in the world of unintended consequences, class bans could end up backfiring on some employers.

“Essentially employers are coming back and saying, ‘Well, wait a minute, that’s completely inefficient. It’s all the same issue’—which is the whole point of having a class action,” Scher explained. “So ultimately, we can put them all together in a class or you can oppose class actions. Which do you want? You’re making me do this.”

If you find yourself facing an unfair workplace issue, click here to contact attorney Dave Scher for an evaluation.


Class Members Get Checks in Long Awaited Payday Lending Settlement

Payday lending class action settlement profiled in report on WFLA channel 8 in Tampa. Watch the video to see the story.  James Hoyer Partner Jesse Hoyer is interviewed.

Long-awaited Settlement:

$4.3 million payday lending class action settlement

After a nearly two decade long battle, a $4.3 million class action settlement is returning thousands of dollars to Florida consumers who took out pay day loans in the late 90’s.  More than 3-thousand Floridians are receiving checks in the mail this week to compensate them for exorbitant fees they paid for their loans. National Cash Advance and/or Advance America charged customers interest rates of nearly 400%, which left many trapped in a cycle of debt.

“This is long-awaited and well-deserved compensation for these class members,” said James Hoyer Partner Sean Estes, one of the attorneys representing the class.

Payday lending class member Stephanie Marshall

WFLA channel 8 in Tampa interviewed class member Stephanie Marshall about the settlement. She received a check in the mail for $1521.90 as compensation for $570 in fees she paid for loans she took out 20 years ago to make ends meet.

“I remember it like it was yesterday,” Marshall said.  “Every other Saturday I went from one place to the next, writing a check, paying the fees, rolling it over.”

Marshall says she is grateful to receive the check today, but advised others thinking about taking out payday loans not to do it.

“Don’t do it! I was like a rat chasing my tail.  I had to stop cold turkey to get control back,” she said.

More than 3000 class members receive checks

Payments to consumers range anywhere from a couple hundred dollars to more than $3,000 dollars, and include people in Tampa, Orlando, Miami, Jacksonville, and dozens of other cities in Florida and around the country. The class claims are for violations of the: Florida Lending Practices Act; Florida Consumer Finance Act; Florida Deceptive and Unfair Trade Practices Act; and Civil Remedies for Criminal Practices Act.

James Hoyer Partner Jesse Hoyer interviewed by WFLA

The victory is somewhat bittersweet.  While several thousand class members will receive long awaited and well deserved compensation, more than 100-thousand others who signed a mandatory, arbitration clause with the check cashing companies will not receive restitution, because the clause includes a class action waiver.  It’s important for consumers to understand the dangers of mandatory arbitration, as well as predatory payday loans, which continue in Florida and across the country, under some new restrictions.

“Mandatory arbitration is dangerous for consumers, because it takes away a lot of your rights. ,” said James Hoyer Partner Jesse Hoyer.  “You’ve got to be careful what you’re signing up for. Make sure you read and understand the terms.”

Click here to read the detailed class settlement notice.


James Hoyer Partner Interviewed about Mandatory Arbitration Pitfalls for Consumers

Jesse Pic3- ABC Arbitration storyJames Hoyer Partner Jesse Hoyer is a strong advocate for consumers and taxpayers. She’s seen how mandatory arbitration agreements can hurt consumers and shared her concerns with ABC Action News I-team reporter Adam Walser.

Walser recently took an eye-opening look into the arbitration clauses that many home builders put into their agreements with homeowners. He profiled two families dealing with significant structural issues in their new homes.  They’ve been unable to get the companies to fix the problems properly and provide them relief, in part because of mandatory arbitration agreements.

Attorney Jesse Hoyer explained in the story that arbitration agreements are often lop-sided giving businesses the edge over consumers.

“Corporations can wait them out, they can bleed them financially. They can draw everything out over time,” said Hoyer.

That’s exactly what happened to the families in ABC’s report. Both are struggling to find a resolution with companies that built their homes.

Click here to watch the report and learn more about this story from ABC Action News.

Hoyer says, because these clauses most often favor corporations, avoid them if you can. Unfortunately, consumers are often stuck, because companies make these clauses a take-it or leave-it proposition, knowing they will have the upper hand.  If you want the service provided, whether it’s a home builder, doctor’s visit, or employment agreement, often times you must sign. If you feel you have no choice, ask lots of questions and understand what you’re getting into.  Try to at least make sure you retain your right to pursue a lawsuit, if the dispute cannot be resolved by arbitration.