National Consumers League applauds the U.S. Department of Labor’s recent lawsuit against employers that require mandatory arbitration
April 5, 2023
Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442
Washington, D.C. – The National Consumers League (NCL) welcomes a lawsuit filed in federal court last month by the Department of Labor (DOL) challenging mandatory arbitration clauses that illegally require employees to repay earned wages if the employee does not work for the employers for specific periods of time. The defendant in the suit is Advanced Care Staffing (ACS), a Brooklyn, New York healthcare staffing provider that required their employees to repay earned wages if they did not complete three years of employment. If employees tried to leave before the three years were up, ACS mandated employees enter private arbitration and compelled employees to pay for arbitration costs, attorney fees, and future ACS profits—in addition to repaying the wages they had earned. This policy resulted in employees earning below the minimum wage.
“This situation is just one example of the harm caused by the rise of mandatory arbitration clauses. Many employers now insert—or rather, bury –these clauses in the paperwork that employees must accept if they want a job. They prohibit employees from bringing claims before a judge or jury for wage theft, discrimination and other violations of federal law,” said Seema Nanda, DOL’s Solicitor of Labor.
“For many years, NCL has condemned the rise of forced arbitration clauses to rob consumers and workers of access to justice. This is among the most egregious violations of employee rights we have ever seen. Workers’ right to seek alternative employment must not be compromised,” said Sally Greenberg, NCL’s executive director. “Consumers and workers are often forced into an arbitration system where corporations write the rules, and those rules are not understood by consumers and employees. There is no meaningful judicial review and no ability to appeal bad decisions by arbitrators who get things wrong. We can never permit consumers and workers to be stripped of their right to go to court, which is guaranteed by the U.S. Constitution.”
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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit nclnet.org.
