Cisco Systems, the California-based technology company, recently received a blow when a San Francisco judge ruled that a former employee with an age discrimination suit is allowed to pursue action against the company through the courts. Upon hiring, Cisco required employees to complete a large amount of standard paperwork, including an agreement they called a Proprietary Information & Invention Agreement. The document detailed how employees should handle all proprietary information, with a statement embedded in the fifth page that says any labor disputes will be forced into binding arbitration. Upon being hired, the employee signed the agreement, along with a stack of others, assuming the document stated the obvious. After being forced to file suit against the company for age discrimination, Cisco attempted to force the woman into arbitration. Her attorney took the matter to court and a judge ruled that Cisco’s bizarre placement of the binding arbitration requirement was an attempt to conceal a controversial policy.
Obama & the Courts vs. Arbitration Clauses
In 2014, former President Obama ordered that all companies with $1 million plus in federal contracts eliminate arbitration clauses that require agreement before any conflict has happened. In other words, having an arbitration clause in new hire paperwork was deemed by the President to be illegal.
In January’s Cisco ruling, Judge Harold Kahn pointed out that Cisco’s deception was not only in hiding the clause in a document with a misleading title, but also in burying it in a wordy document.
Are Nursing Home Arbitration Agreements on the Way Out?
With Obama’s 2014 order and the most recent ruling against Cisco, the tide seems to be turning in favor of the individual. Corporations requiring arbitration as a condition of employment are taking away the constitutional right to a fair trial. Americans are being forced to sign away their rights in order to be gainfully employed, while allowing businesses to maintain their ability to sue should a dispute arise. You, the party with less financial resources and considerably less power, must agree to solve differences out of court and away from the eyes and ears of a judge and jury, but corporations requiring arbitration are allowed to take you to court. It hardly seems fair.
Many of America’s elderly are also waiving their rights by signing documents with arbitration agreements upon admittance to nursing homes. After making the life-changing decision to reside in a nursing home, many facilities are dropping loads of paperwork into the laps of residents and their loved ones, asking them to agree to hash out differences with a 3rd party, picked by the nursing home themselves.
The Cisco ruling and Obama’s block of employment agreement arbitration clauses are not the only two pieces of good news. Late last fall, the Centers for Medicare & Medicaid Services recently released updated nursing home standards that include a ban on binding arbitration clauses in nursing home contracts. While this ban was overturned by a Mississippi judge in December, the hope is that the decision will be appealed and that the ban can move forward. This would mean a victory for all nursing home residents by giving them back their constitutional right to a jury trial.
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