Marc J. Lane

Article Summary:

Employee legal rights can unwittingly be signed away when you agree to arbitration prior to employment.

Employee Legal Rights Should Not be Signed Away

The U.S. Supreme Court decided that a company may lawfully require its worker to submit any future employment-discrimination claims to an arbitrator -- and forfeit his right to a trial. By so ruling, the high court may have resurrected a them-against-us mentality better left dead.

The case involves a guy named Saint Clair Adams, who signed a take-it-or-leave-it arbitration "agreement" before Circuit City Stores, Inc. would hire him as a computer salesman. The agreement didn't promise him any specific wages or benefits or any job security. All it did was lock him into his employer's private justice system.

You need to understand that Adams would no sooner have consulted a lawyer to tell him what signing such an agreement might mean than he would retain Johnnie Cochran to defend his speeding ticket. And had Adams raised any concerns about being barred from going to court, he probably wouldn't have been hired.

Adams unwittingly signed his rights away and went on to suffer the consequences. He claims Circuit City discriminated against him because he's gay, and he sued the company, demanding a jury trial. The Supreme Court held that Adam agreed to settle any dispute with Circuit City through arbitration and denied him a trial.

Resolving workplace disputes through arbitration makes perfect sense. The judgment of an expert arbitrator may be more informed and better reasoned than most jurors'. And, while a suit might take five years to work its way through the courts, arbitrations are often resolved in months. The high costs of litigation are saved. And both the company and its employee can avoid public scrutiny.

BUT... coercing employees to surrender their civil rights is bad business. And fair play demands fair rules.

Marc J. Lane is a business and tax attorney, a Master Registered Financial Planner, a Registered Financial Consultant, and a Certified Investment Specialist. Marc is the author of 30 books on business organization, taxation, and personal finance. His practice areas include Individual Taxation, Corporate Tax Planning, Business Tax Planning, Estate Planning, Investments, Retirement Planning, Elder Law, International Trade, Business Law, and Wills, Trusts and Estates. Additional articles, case studies, and a free email newsletter are available at

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