The Nation: How Consumers Are Getting Screwed by Court-Enforced Arbitration

Yes, unfortunately, this applies to you:

"For more than forty years, the Supreme Court’s conservatives have been engaged in a campaign to shut the courthouse door to consumers, working people, small businesses and others seeking redress for corporate wrongdoing. 
In recent years, and especially since Chief Justice John Roberts and Associate Justice Samuel Alito joined the Court, a major weapon in this campaign has been the Federal Arbitration Act (FAA) of 1925. The conservatives have used the act to prevent victims of such abuses from seeking redress in the courts, forcing them into pre-dispute arbitration instead. In doing so, they lose a public trial, a jury and a neutral judge, as well as an appeal to a higher court; in many cases they may also have to give up discovery rights. It is not uncommon for them to wind up before an arbitrator who is dependent upon the defendant’s business community for work and fees, and who may not even be legally trained. Not surprisingly, those forced into arbitration almost always fare much worse than they would in court.
* * *
Two reports issued at the end of last year show how effective the Court’s arbitration rulings have been. Last December, the Consumer Financial Protection Bureau (CFPB) issued a preliminary report, which found that contract clauses mandating pre-dispute arbitration are a “common feature of consumer financial contracts”; a final report is due by year’s end. The agency found such clauses in over 50 percent of credit card loans, 81 percent of prepaid charge cards and in checking accounts covering 44 percent of all insured deposits."  (emphasis added). (continue reading)

When I first started to understand the scope of this issue and began taking a hard look at my various consumer contracts it was truly startling.  Even almost a decade ago, I found that the vast majority of my consumer contracts were subject to mandatory arbitration agreements.

For example, that huge bill AT&T sent you that was incorrect - perhaps because they charged you based on your previous plan even though you upgraded - if you can't get a decent customer relations person on the phone (a real risk) you can't challenge the charge in court.

That's something to really give some thought to as a consumer.  

Do you really want to have a contract with a company that is not willing to stand by the quality of its product and services in court?  If the answer to that is no - then there's a real problem -  some consumer industries do not offer a viable company you can use that does not use mandatory arbitration agreements.

If this is all a bit disturbing you may have good reason to get behind the stalled Arbitration Fairness Act. Take a look:

THE ARBITRATION FAIRNESS ACT OF 2013
Senator Al Franken
The ability of ordinary Americans to seek justice in our courts, even when up against the most powerful corporate interests, has become a fundamental element of our civil justice system. However, the growing use of forced arbitration provisions in consumer and employment contracts has eroded this essential function. Forced arbitration provisions thwart the ability of workers and consumers to hold corporations accountable for wrongdoing, even in the most egregious cases. (continue reading)

 

New York Students Join Constitutional Challenge to Teacher Tenure Rules

As previously covered here, last month a California court ruled that California teacher tenure rules were unconstitutional under the state constitution.

New York students have followed with a similar suit regarding teacher tenure in New York:

Eleven New York Public School students filed a class action lawsuit in the Supreme Court of the State Thursday, claiming teacher tenure laws violated their State constitutional rights to a "sound basic education."
. . .
The lawsuit declares New York Education law, Section 3020a and its implementation as unconstitutional. Plaintiffs claim that employment as an educator in New York State is an earned privilege and cannot be a life-long right for incompetent teachers; the process for due process protections are onerous and create disparate costs for lower-income and non-white populations; and if a teacher's performance is below minimum standard guaranteed by the New York State constitution, they should not able to retain their employment during a downsizing period based on their seniority. (link)

A press release announcing the suit notes the abysmal status of student performance in New York schools:

"Across New York State, about 70 percent of students do not read, write and do math at grade level.  This is a crisis of epic proportions. New York City schools in mostly Black and Latino neighborhoods are staffed with the highest concentration of Unsatisfactory-Rated teachers.  Yet, every attempt to hold teachers accountable for educating our children is blocked.  Bad laws need to go. It is time to reform the law and put our children's interests.  Every child must receive equal access to a high-quality education." (link)

It looks like for the near future this is the battle ground on which teacher tenure will be preserved or dismantled across the country.


MLK - Economic Justice & Racial Justice Are Intertwined - The Need for a Living Wage

The current debate about the need, or lack thereof, to raise the federal minimum wage is slowly heating up.  Advocates stress human dignity and the economic stimulus this policy would advance.  Opponents point to the cost to businesses' bottom line  - often invoking the mom and pop store that is barely making ends meet. 

Although I think proponents very much have the upper hand in this argument - this is surely a place where reasonable minds can disagree.

Or can they?

As in most things, it's sometimes important to take a step back and re-frame modern debates in historical contexts.

Most people remember Martin Luther King, Jr. as one of the great leaders of the civil rights movement.  However, near the end of his life, he was increasingly focusing his message on the problems of poverty and economic justice.  Moreover, this shift in focus happened well before America had even begun to fully deal with racial equality - so why the shift?

If you are an advocate for a living wage take a moment to see what MLK had to say about it.

If you consider yourself a supporter of MLK, but are opposed to a living wage, you may have to do some soul searching on this issue if you take the time to listen.

Perhaps this should change how we talk about a living wage as a national issue.

Uploaded by UnionSolidarity on 2011-02-08.


NYC City Council Members: Use Eminent Domain to Buy Back Underwater Mortgages

An idea that makes a lot of sense, in a lot of different ways, for a lot of different reasons:

"New York City Council members and housing advocacy groups called on Mayor Bill de Blasio on Wednesday to join them and help homeowners at risk of foreclosure, proposing the use of eminent domain to buy back underwater mortgages.
At a news conference, council members Donovan Richards, Mark Levine and I. Daneek Miller said eminent domain could be used to buy back mortgages from homeowners who owe more than their houses are worth. (continue reading)."

Here is a full-throated defense of the idea from Robert Hockett, a Professor of Law at Cornell Law School, published in the Daily News:

"The last time the U.S. experienced economic calamity and slow-motion recovery — from 1929 into the 1930s — the policy responses it adopted were profoundly innovative yet quintessentially American. This was largely because the President who took office in 1933, Franklin Roosevelt, had led New York — the nation’s center of creative dynamism in business, the arts and governance alike.
New York City should take inspiration from FDR’s ingenuity today by employing a home-foreclosure prevention tool that he pioneered."
* * *

The plan is necessary because the state of the city’s housing market — especially for its African-American and Latino communities — remains dire.

Manhattan fares reasonably well, but the other four boroughs do not. And as a new report issued by the City Council and the Mutual Housing Association of New York demonstrates, some 60,000 New York City homeowner families, disproportionately families of color, are in crisis.

Only the city’s power of eminent domain will help . . ."

The ending is perfect:

"There is what I like to call poetic justice in this plan.  In the recent past, eminent domain has been used to remove communities of color from their homes and their neighborhoods.  By “taking the loans, not the homes,” New York will be flipping that sordid history on its head — and benefitting itself and investors as well in the bargain." (link)

EEOC Settles ADA Leave Suit for $1.35 Million With Princeton Healthcare

The EEOC has settled another ADA leave as a reasonable accommodation case.

Princeton HealthCare System, which operates the University Medical Center of Princeton at Plainsboro and several other medical facilities, will pay $1.35 million and will undertake significant remedial measures to settle a disability discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission, the agency announced today.
The EEOC’s suit alleged that the hospital’s fixed leave policy failed to consider leave as a reasonable accommodation, in violation of the Americans with Disabilities Act. According to the EEOC, Princeton HealthCare’s leave policy merely tracked the requirements of the federal Family Medical Leave Act and employee leaves were limited to a maximum of 12 weeks. The policy meant that employees who were not eligible for leave were fired after being absent for a short time, and many more were fired once they were out more than 12 weeks.
The EEOC filed suit in U.S. District Court for the District of New Jersey after attempting to reach a pre-litigation settlement through its conciliation process.
Under the consent decree settling the suit, approved by U.S. Magistrate Judge Douglas E. Arpert, the hospital is prohibited from having a blanket policy that limits the amount of leave time an employee covered by the Americans with Disabilities Act may take.
. . .
Princeton HealthCare also agreed that it will not subject employees to progressive discipline for ADA-related absences, and will provide training on the Americans with Disabilities Act to its workforce. (link)

Haunted by The (Standing) Dead?: Zombie Homes Plaugue NYC

Is your neighborhood haunted by the (standing) dead?:

Brooklyn and Queens are plagued with “zombie” properties — homes abandoned by their owners and banks that fail to complete the foreclosure process.
New York currently has 807 of the deserted homes, which can waste away for years as lenders fail to maintain them.
. . . .

State Attorney General Eric Schneiderman pushed a bill that would force mortgage holders to care for the properties. It failed to pass this legislative session.

'Zombie homes are a drain on families and communities and place undue burden on thinly stretched municipal resources,' said Melissa Grace, an AG spokeswoman. 'We look forward to working with the legislature . . . next session.' (link)



Minimum Wage Hikes Gaining Steam

Great news regarding increasing the minimum wage with an increase from $8 to $11 an hour in Massachusetts signed into law by Governor Deval Patrick (fully effective by 2017) and, in the corporate sphere, with IKEA planning to raise it's average hourly wages to $10.76 an hour.

The Massachusetts law will give that state the highest minimum wage in the country.

From Governor Patrick - who appears to see this increase as just a first step:

"This minimum wage is great progress, but it's not a livable wage," Patrick said to applause from members of Raise Up Massachusetts, a coalition that had gathered more than 350,000 signatures in favor of a minimum wage hike.
"Keep looking ahead and above all, keep in mind that people for whom the American dream is still just a dream . . . deserve the chance for themselves and their families to dream along with the rest of us . . . ." (link)

President Obama, who recently signed an executive order increasing the wages of employees of federal contractors to $10.10 on future contracts (effective 2015) and has supported increasing the federal minimum wage (currently a measly $7.25 an hour) to $10.10, strongly praised Massachusetts lawmakers for the new law.

Long-Term Unemployed More Likely to be Highly Educated, Older, and Black

After all of that hard work getting a degree(s) - a report finds that the long-term unemployed are more likely than the short-term unemployed to be older, non-Hispanic black, and wait for it .... have higher levels of education than the short-term unemployed.

"The long-term unemployed are more likely than short-term unemployed to be older, have higher levels of education, and be non-Hispanic black." (link)

This report might give those considering entering higher education in the face of mounting student loan debt a moment of pause.

Of course, older unemployed black people will also probably find the report disheartening.

Foreclosure Poses Staggering Economic Risk to NYC Communities of Color

Is the foreclosure crisis a racial justice crisis?

A report from the office of State Senator Klein indicates that 80% of homeowners at risk of foreclosure are in communities of color:

"Of the 29,729 homeowners who have missed multiple mortgage payments as of last month, 10,308 are from Brooklyn, the report says.
New York State Senate Of the 29,729 homeowners who have missed multiple mortgage payments as of last month, 10,308 are from Brooklyn, the report says.
Another 10,060 live in Queens, 4,408 in the Bronx, 4,110 on Staten Island and 843 in Manhattan.
Klein’s report also finds that 80%, or almost 24,000, of those in preforeclosure are from minority communities across the city."  (link)

The report also notes the high cost of a foreclosure to surrounding homes nationally:

"This is an average rate of $23,157.89 in home equity lost for each surrounding property. An even higher rate was seen for [m]inority neighborhoods who lose an average of $40,297 of their property’s value." (link)

The report finds the potential lost tax revenue and home equity in NYC communities of color is staggering:

"Should the properties foreclose minority neighborhoods would experience losses of $64 million in property taxes and $13 billion in home equity." (link)

Below is an overview broken down by borough:

While the report somewhat overstates the numbers because its calculations assume that all those at risk of foreclosure will go into foreclosure, at a minimum, it underscores the urgent need to support (i.e. fund) counseling and legal representation for those at risk of foreclosure.

The full report can be found here.