National Labor RelationsBoard in Washington, D.C. Credit: Diego M. Radzinschi/ALM

Employees in low-wage workplaces, women and African-Americans are more likely tobe subject to mandatoryarbitration agreements in employment contracts thanother groups, potentially limiting their access to the courtsystem, a study released recently by the Economic PolicyInstitute found.

The survey authored by CornellUniversity professor Alexander Colvin found that 57.6 percent offemale workers, 59.1 percent ofAfrican-American workers and 53.5 percent of male workers are boundby mandatory arbitration agreements.

Nearly 65 percent of workplaces where the average wage is lessthan $13 an hour also require mandatory arbitration agreements fortheir employees.

Colvin's study also found that since 1991, the existence of suchagreements has risen from just over 2 percent to nearly a quarterin the early 2000s, to more than 55 percent of workers today, whichhe says lessens the access of employees to the courts for a varietyof civil rights and labor rights claims, representing a “dramaticand important shift in how the employment rights of Americanworkers are enforced,” according to the report.

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Mandatory arbitration agreements are most widespread inCalifornia, Texas and North Carolina. In all of the 12 largeststates by population, more than 40 percent of employers have thesepolicies, the survey found.

The issue draws significance as the U.S. Supreme Courtweighs a trio of cases thatchallenge whether class action waivers should be allowed inemployment contracts. Mandatory arbitration agreements have alsofound new scrutiny amid the #MeToo movement, as women speak out against pastworkplace abuses and the efforts of employers to keep those issuesout of court.

“Under such agreements, workers whose rights are violated—forexample, through employment discrimination or sexualharassment—can't pursue their claims in court but must submit toarbitration procedures that research shows overwhelmingly favoremployers,” Colvin writes in the report.

The findings build off a 2017 study from the worker-friendlypolicy group that found more than half of private sector nonunionjobs are subject to mandatory arbitration, a trend the report foundhas accelerated since the 1990s. Among private-sector nonunionworkers, 56.2 percent are subject to mandatory employmentarbitration, which would mean more than 60 million Americanemployees have no recourse to the courts in legal disputes and mustgo to arbitration, the survey found.

Larger employers were more likely to impose such agreements,which are different from the system used to resolve employmentdisputes between labor unions and management in organizedworkplaces. More than 65 percent of employers with 1,000 or moreworkers have mandatory employment arbitration, the study found.

Among the employers that require mandatory arbitration, 30percent include class-action waivers that prevent them from takingcollective legal action, according to the report.

The Supreme Court heard arguments inOctober, in a trio of cases—National LaborRelations Board v. Murphy Oil USA, Ernst & Young LLPv. Morris and Epic Systems v. Lewis—that considerwhether the class action waiver violates the federal law thatprotects workers' rights.

Colvin said a ruling in favor of the employers would encouragemore businesses to adopt mandatory employment arbitration and classaction waivers.

The U.S. Chamber of Commerce's amicus brief, filed by a teamfrom Mayer Brown, urged the SupremeCourt to uphold the lawfulness of mandatory arbitration.

“Most workplace grievances are individualized and thereforecould not be pursued as part of a class or collective action.Indeed, without individual arbitration, most of those claims couldnot be pursued at all,” Mayer Brown's Andrew Pincus, counsel ofrecord, wrote. “The best empirical data available show thatemployees fare at least as well in arbitration as in litigation, ifnot better; and that litigation in court is frequently tooexpensive to serve as a realistic option for employees seeking tovindicate their rights.”