Maine’s lawmakers are revisiting a bill introduced in 2019 that would restore the legal rights of workers trapped in a rigged system that prevents them from having their day in court, even when their employer violates their rights.
The bill, LD 1693, sponsored by Senate President Troy Jackson, will make it easier for whistleblowers to expose employers for breaking the law, and will ensure those bad employers are held accountable in the judicial system.
Mandatory arbitration stacks the deck against workers
The ability for people whose rights are violated to take their case to court is a pillar of our legal system. But when workers’ rights are violated — through discrimination, sexual harassment, wage theft, or union-busting, for example — they are increasingly prevented from seeking real justice.
Businesses increasingly require prospective workers to sign agreements waiving their right to sue their employers. These agreements require workers to agree to use third-party, private arbitrators to resolve disputes with their employers. They also are often a condition of employment, providing unemployed workers with a choice that isn’t really a choice at all: Sign the agreement and earn a paycheck, or don’t sign and keep scouring job postings.
Studies show that workers whose rights are violated — through wage theft, sexual harassment, discrimination, or union-busting activities, for example — fare much worse in arbitration than they do in court. Research by the Economic Policy Institute1 in 2015 found that mandatory arbitration tilts the system against workers:
“Employees are much less likely to win in mandatory arbitration than in federal court: employees in mandatory arbitration win only about a fifth of the time (21.4 percent), whereas they win over one-third (36.4 percent) of the time in federal courts.
“Differences in damages awarded are even greater. The typical award in mandatory arbitration ($36,500) is only 21 percent of the median award in the federal courts ($176,426).”
Given that arbitration is far more favorable to employers, it’s little wonder that so many businesses are requiring workers to sign mandatory arbitration agreements. Extrapolating from a later round of research,2 EPI estimates that more than half of Maine employers subject their workers to mandatory arbitration.
LD 1693 will give workers more pathways to justice
Workers under mandatory arbitration agreements do have one other avenue through which to hold their employers accountable for violating their rights: They can request the Maine Department of Labor sue on their behalf. Unfortunately, the Labor Department’s capacity is constrained by limited resources and years of under-funding and understaffing.
That’s where LD 1693, the law under consideration by lawmakers this year, comes in. The bill would allow the AG to deputize private attorneys to act on its behalf to enforce labor laws. Because state attorneys are not bound by agreements between employers and employees, they can file suit on behalf of workers who are trapped under mandatory arbitration.
By increasing the pool of attorneys available to sue bad employers, LD 1693 would restore workers’ basic legal rights by giving them a pathway out of the rigged system of mandatory arbitration.
Prevalence of wage theft and discrimination show workers need real justice
- Discrimination: Discrimination — on the basis of gender, age, race, interaction with the criminal justice system, pregnancy, parenthood, disability, or sexual orientation — appears to be far more common than official complaints suggest. Seven percent of respondents said they had suffered at least one form of discrimination at work in the past year. If this is a representative sample of Maine workers, that’s the equivalent of roughly 35,000 workers. The Maine Human Rights Commission handled just under 500 complaints in 2018 —less than 0.1 percent of the private-sector workforce.
- Minimum wage violations: Five percent of hourly or piece rate workers reported they had been paid less than the minimum wage, including their tips, in at least one pay period in the year. That percentage represents roughly 15,000 workers who lost wages in 2019.
- Unpaid overtime: Nearly all hourly workers should be eligible for overtime pay under Maine law, yet 7 percent of hourly workers in MECEP’s survey said they had worked more than 40 hours at least once in the past year without getting overtime pay. Despite common assumptions, many salaried workers should also be paid overtime when they work over 40 hours. The survey reveals that its likely at least some of those workers are being denied overtime they are owed.
Labor laws exist to ensure that workers are paid what they’re owed and are treated fairly at the workplace. But those laws aren’t effective unless they can be enforced, and without action to increase enforcement of these laws, unscrupulous employers will continue to break the rules and gain an unfair advantage.
The economy can’t work for everyone if some employers aren’t playing by the rules. LD 1693 offers a way for Maine to enforce its laws and restore fairness to the workplace.
1 Stone, Katharine V.W. and Alexander J.S. Colvin. “The Arbitration Epidemic.” Economic Policy Institute. December 7, 2015. https://www.epi.org/files/2015/arbitration-epidemic.pdf
3 Survey conducted by ALG Research, which surveyed 450 workers who were currently employed in the private sector or had been employed in the private sector within in the past year. The survey was conducted from September 12 to 22, 2019, and includes a margin of error of +/- 4.9% at the 95% confidence level. The survey included responses via landline and mobile phones. For full methodology and toplines, see Appendix A in State of Working Maine 2019.