Academic journal article Michigan Law Review

Improving Employeraccountability in a World of Privatedispute Resolution

Academic journal article Michigan Law Review

Improving Employeraccountability in a World of Privatedispute Resolution

Article excerpt

Introduction

Private litigation is the primary enforcement mechanism of Title VII of the Civil Rights Act of 1964, the nation's landmark employment discrimination law.1 Many other federal statutes designed to protect workers-such as the Americans with Disabilities Act (ADA),2 the Fair Labor Standards Act (FLSA),3 and the Family Medical Leave Act (FMLA)4-also share this enforcement scheme.5 But based in part on a changing litigation landscape over the last several decades, private litigation has become increasingly ineffective at holding employers accountable for violations of these types of laws.

Rather than resolving legal disputes through litigation, parties have increasingly relied on predispute arbitration agreements and prelitigation settlement agreements, two forms of extrajudicial dispute resolution.6 Most employees are now required to sign arbitration agreements as a condition of employment,7 a practice upheld by the Supreme Court.8 In these agreements, employees promise to resolve all future disputes with their employers in private arbitration instead of in court.9 These agreements hinder the effectiveness of the mechanism Congress created to enforce these protective laws. But even employees free from arbitration agreements are unlikely to ever file employment discrimination claims.10 Instead, aggrieved employees typically settle before ever filing a lawsuit, usually with both parties bound to confidentiality.11 Both arbitration and prelitigation settlement agreements shield facts surrounding the alleged misconduct from public view.

The Supreme Court's recent jurisprudence suggests that it does not view this pattern of increased out-of-court dispute resolution as problematic, particularly with respect to arbitration.12 In the Court's view, employees bound by arbitration agreements are still capable of vindicating all their statutory rights as employees; claim resolution simply takes place in a different, speedier forum.13 Empirical research, however, indicates the opposite. Employees who sign such agreements are less likely to make a claim against their employer in any forum.14

The confidential nature of extrajudicial dispute resolution makes public enforcement through private litigation difficult, frustrating the overall purpose of employment discrimination laws. Arbitration is a largely confidential process.15 Similarly, pre-suit settlement agreements resolve disputes outside formal court structures and nearly always include confidentiality provisions.16 Such confidentiality is not possible in the vast majority of lawsuits, in which complaints are public records. Although confidentiality may encourage settlement and thus reduce the economic strain on the courts,17 the secrecy makes it difficult to raise awareness of corporate misconduct or alert other aggrieved employees who might not know that they could make similar claims.18

In qui tam actions, private individuals sue for a penalty, part of which the individual receives as an incentive and part of which the government receives as the enforcement agency.19 In essence, the government "hires" private individuals (called relators) to enforce its own laws.20 This Note examines how states can use qui tam laws to address the enforcement challenges that extrajudicial dispute resolution creates for employment discrimination laws.21 Part I describes the interaction between employment discrimination laws and private dispute resolution mechanisms. Part II examines how states can potentially use qui tam laws to enforce employment discrimination laws against the backdrop of widespread private dispute resolution. In particular, it examines case law surrounding two existing qui tam statutes, the federal False Claims Act (FCA) and the California Private At torneys General Act (PAGA). Part III outlines a proposal for states that preserves enforcement of employment laws via private litigation while respecting the limits placed on states by the FAA and the right to make contracts. …

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