New York City Mayor Bill DeBlasio, in office for just over 100 days, continues to make some noteworthy moves. His police chief announced yesterday that NYC would stop a controversial and secretive surveillance program “that dispatched plainclothes detectives into Muslim neighborhoods to eavesdrop on conversations and built detailed files on where people ate, prayed and shopped." While generating a number of lawsuits, this program never produced a single lead.
And another interesting move from the new mayor yesterday. He signed into law,
… a measure intended to ensure that unpaid interns in the city will have the right to sue if they are harassed or discriminated against by an employer — a right, it turns out, that was not reflected in the city’s civil rights code.
The legislation, which passed unanimously in the City Council and takes effect in June, was prompted by a sexual harassment suit brought last year by an unpaid intern in the New York office of a Chinese news agency, Phoenix Satellite Television, who said she was harassed and groped by her supervisor.
The harassment claim was thrown out by a federal judge, who found that the intern did not qualify as an employee because she was not being paid, and thus did not have the standing to sue under New York State and City human rights laws, which prohibit discrimination against workers.
So this raises an interesting question. As the saying goes (in our world, at least), if you don’t sign a contract, you can’t relinquish your rights. Unpaid interns usually don’t sign contracts, am I right? But paid employees often do. These days, those employment contracts often have forced arbitration/class action waiver clauses. That mean when they are sexually harassed, they can’t sue in court.
Take the recent case filed against Sterling Jewelers. As the New York Times wrote last month, a class action has been filed “against Sterling Jewelers, parent of 12 chains in the United States, including Jared the Galleria of Jewelry and Kay Jewelers” for “gender discrimination in its pay and promotion practices since 2003” including "sexual harassment and vulgar behavior.” However, “[e]ven if the women are certified as a class, they must pursue their case against Sterling privately. According to company policies, employees must deal with cases through arbitration, not the courts.”
The Times reporter who wrote that story, Susan Antilla, followed up with this disturbing blog post about the Sterling Jewelers case:
I asked to attend the late February hearings on this sex discrimination case that could wind up including 44,000 women in 50 states, but the arbitrator declined my request. More important is that the Equal Employment Opportunity Commission – the agency in charge of enforcing federal civil rights laws – also asked, and also was declined.…
When civil rights cases are adjudicated behind closed doors, it reduces the incentive for companies to change. It used to be that only Wall Street had a lock on forced arbitration of disputes, which in my opinion fueled much of the egregious behavior in the financial world that I wrote about 12 years ago in my book [“Tales From the Boom-Boom Room: The Landmark Legal Battles That Exposed Wall Street’s Shocking Culture of Sexual Harassment.”]
These days, though, Wall Street has a lot of company in the privatization of civil rights claims.
At Sterling, a so-called mandatory arbitration policy has been in effect since 1998. The company has a dispute resolution program called Resolve that employees are required to use. It’s a three-step program, the third of which is arbitration. Only two of the 474 Resolve complaints filed between 1998 and 2010 wound up moving all the way to a decision by an arbitrator.…
The Sterling women are handicapped by their lack of access to the courts, but it could be worse. They at least managed to get an arbitrator to consider certifying them as a class – a decision that is probably months off. But more and more companies are writing clauses into employment contracts that prohibit class actions even in arbitration, said Cliff Palefsky, a San Francisco employment lawyer. And without a large group to share legal expenses, wage discrimination cases like the one against Sterling are all but impossible to pursue.
So let’s hear it for unpaid interns in NYC, who likely now have more legal rights than many of the paid employees overseeing them!