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Tuesday, January 19, 2016

Guitar Center: "Sign This Or You're Fired!"

Guitar Center o,ageGuitar Center is at it again, bullying employees into signing an agreement that would strip them of the right to sue the company in class action lawsuits over wage violations, workplace discrimination and unjust firings, among other disputes, according to the Huffington Post.

Employees at the Las Vegas store were told that they had to sign the agreement by the end of Friday or their jobs would be terminated.

Arbitration is a tactic used my many big companies today to keep down the legal costs that a court case may involve during a dispute. Instead the case is referred to a third party arbitrator for settlement.

While on the surface that might seem fair, many times the arbitrator maintains a cozy relationship with the company, resulting in favorable rulings, as outlined by an article in the New York Times. The big difference here is that GC is requiring employees to sign the agreement after they've been hired, while usually the agreement is signed when they're first hired.

Keep in mind that GC is still involved in a labor dispute with the Retail, Wholesale and Department Store Union regarding 3 GC stores electing to unionize, but the company failing to reach a contract agreement with any of them. A decision hasn't been issued by the arbitrator in that case yet.

While its unclear whether Guitar Center's current actions violate a law since the court has ruled multiple ways in the past, the union is considering additional legal actions.

Things just get worse for GC employees, which means that it won't get any better for customers either.

7 comments:

Ziplocbaggies said...

nothing new Bobby alot of companies around the nation are rolling out the "arbitrator" papers for the employees. especially private companies. hmmm...

Rob Carty said...

Guys, this is nothing new. Companies have been using arbitration for decades in employment and consumer situations. Decades. And there's nothing inherently wrong with it. If you want to do business with me, either as a customer or an employee, I have the right to ask you to resolve any disputes one on one, rather than in BS class actions that do almost nothing for the little guy, but line the pockets of plaintiffs' lawyers. I've known many such lawyers in my day, and it would make you ill to see how greedy they can be.

The Supreme Court has repeatedly made clear that class-action waivers in arbitration agreements are completely legitimate, enforceable, and constitute good public policy.

As for cozy relationships with arbitrators, I suppose it's possible -- but it's highly unlikely. To ensure enforceability, most arbitration agreements require the use of a recognized alternative-dispute-resolution provider such as the American Arbitration Association or JAMS. These organizations are well-reputed and provide fair mechanisms that allow the parties to select neutral arbitrators.

At-will employment is valuable not only for employers who have the right to dictate the terms of employment, but also for employees who need the freedom to leave their employment at any time for any reason (or no reason at all).

Bottom line: Much ado about nothing.

Bobby Owsinski said...

This has nothing to do with arbitration, it's the ultimatum that you're fired if you don't sign away your right to sue.

This is illegal if you're part of a union, which these stores voted in last year.

Also, don't forget that it's the employer who hires the arbitrator.

Rob Carty said...

Actually, Bobby, it's not illegal. The unions claim it is, and the NLRB claims it is. But every appellate court to address the issue has said otherwise. The vast majority of district courts have held the same. And it's their opinions that count -- neither the unions nor the NLRB get to dictate the law.

And while the employer almost always pays for the arbitration (how unfair!), they don't select who the arbitrator is. That is done jointly by the parties. They usually receive a list of at least seven proposed arbitrators and then each party strikes the ones they don't want. If the whole list gets scrapped, they start again.

Rob Carty said...

Also, just so we're not talking past one another ...

If you're part of a duly established bargaining unit, then it's true that any conditions of employment must be negotiated with the union. For non-union folks -- which is anyone else who's outside the confines of the defined bargaining unit -- they deal with the employer directly. This can include people within the same store who have different titles. For most employment-related disputes, the bargaining-unit employees usually have to go through a grievance process, and then an arbitration.

The non-bargaining-unit employees, meanwhile, can sue unless they've agreed to arbitrate. This is what arbitration is: an agreement to resolve all disputes out of court. And as the Supreme Court has repeatedly held, the public policy of the United States is to encourage and enforce such agreements.

Often, these agreements contain a class-action waiver -- that is, you agree that any arbitration will be one-versus-one, not one-versus-a-class. Unions, the NLRB, and plaintiffs' lawyers have a history of trying to overturn class-action waivers, and why not -- they provide lots of leverage for the employees and can generate massive awards of legal fees for plaintiffs' lawyers that cannot be appealed. Employers and their lawyers almost never have this luxury. Predictably, this has led to abuses by the plaintiffs' bar. And arbitrators, who get paid by the hour, were all too happy to overlook the class-action waivers and allow class arbitrations to proceed. (See, I told you they're really not in the employer's pocket.) Courts have roundly criticized this practice, and the NLRB et al. now find themselves being bench-slapped around the country.

Anyway, the bottom line is that there's nothing evil about an employer dictating the terms of employment -- that's the way it should be. Employment policies change all the time, and employees who don't like it are free to go elsewhere. Employers who treat their employees poorly will eventually fold, but the same is true for employers who fail to protect themselves from rampant litigation.

And there's nothing wrong with protecting one's business from rampant litigation!

Pronounced George said...

Bobby, you trash trash trash, but I saw one of your books being sold in GC...... So you are making money off GC sales but just love to trash them? hmmm

Bobby Owsinski said...

Not trashing, George. Just reporting. GC makes more money off of me that I make from them, for what it's worth.

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