The Counsellor's Corner


Are you tired of having to sign away your legal rights and agree to arbitration in numerous instances in life such as dealing with your HMO or other health insurance carrier?  Do you feel that an arbitrator will treat you as fairly as would a court?  How about when agreeing to arbitration becomes a condition of employment?

            In early February 1998, two law firms became the defendants in what is believed to be the first law suit of its kind in which a legal secretary sued his former employers for requiring him to sign agreements which would have forced him to accept binding arbitration if there were any disagreements between his employers and him.  Donald Lagatree is the plaintiff in both cases; the first stemming from his hiring by the Long Beach law firm of Keesel and Young in March of 1994.  More than three years later, in June of 1997, he was asked by his employer to sign a standard arbitration agreement agreeing to give up all of his rights to take his law firm to court and forcing him to take his complaints to an arbitrator.  Mr. Lagatree refused to sign the agreement and he was then fired on June 30, 1997.  You might think this is the end of the story, but it is only the beginning.

            In September of 1997, Mr. Lagatree began working at the law firm of Luce Forward in San Diego.  On his first day of work he was handed another standard arbitration agreement to sign and, sure enough, he refused.  (Wouldn't you think the San Diego firm would have asked him what caused his last job to come to an end?)  He was then fired two days later.  Mr. Lagatree has now filed a law suit against each firm and is seeking both compensatory and punitive damages for wrongful discharge.  Mr. Lagatree does not have to hire an attorney as the ACLU has taken up his cause.  It is thought that this will be a landmark case in determining whether or not these forced arbitration situations are a violation of public policy and one's constitutional rights.  David Schwartz, an attorney for the ACLU opines that "You can't force somebody to sign a contract with an exculpatory clause that says 'we are not going to be liable for our own violations of law'. . . an arbitration is inherently a back-door limitation of liability because an employer knows they're going to do better in arbitration than in court."

            What makes these cases unusual is that arbitration agreements are generally challenged after employees have signed away their legal rights and later find themselves in a situation where they are being forced into arbitration.  This case is different in that the individual, Mr. Lagatree, attempted to nip things in the bud on both occasions by refusing to sign away his legal rights and he has now been terminated twice for so doing.

            How do you feel about this?  Shouldn't an individual if they are wronged, be able to take the matter to court and have a jury of his peers decide whether it is the employer or the employee who is acting unlawfully?  Why should employers be able to force these arbitration agreements down the throat of their employees when the arbitrators being selected are not going to give the employee the same consideration as they are to the employer?  In general, the arbitrator knows where his bread is buttered and there is often an inherent conflict in having an arbitrator make the decision.

            I will follow these cases and keep you informed.  I think this is an extremely important piece of litigation from a public policy standpoint.  I believe that arbitration should be a step in the process but not the final resting place.  A more equitable system would have non-binding arbitration as a starting point, and if either side does not agree with the arbitrator's ruling, that side can then choose a jury trial.  Let's give the employees a fair shake.

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            Charlie Unger is a criminal defense attorney in the Glendale law firm of Flanagan, Booth & Unger.  Mr.Unger has obtained his doctorate in psychology and writes a bi-monthly column on legal and psychological issues.