Non-Union Workers Deserve Binding Arbitration Laws

The conservative-dominated California Supreme Court last week sustained a critical part of a 9-year-old ruling on “wrongful discharges” that was handed down when the court was headed by the liberal Chief Justice Rose Elizabeth Bird.

The latest decision reaffirmed that employers do not have the unfettered right to devastate the lives of competent non-union workers by firing them arbitrarily on a moment’s notice.

That victory for workers was more than offset by another part of the latest court decision, however.


The majority held that workers who are fired without “good cause” cannot collect punitive damages or money for pain and suffering from employers. Such awards, usually to management-level employees, have amounted to millions of dollars.

Now such damages can be won only if the workers are fired in violation of “public policy” for such things as refusing to commit an illegal act.

The latest ruling may have finally struck a death blow to the ancient, unconscionable “fire at will” doctrine that employers had enjoyed for centuries: the legal right to boot workers from their jobs with or without a reason, regardless of the workers’ ability or experience.

But clever management lawyers think they have devised a simple gimmick to get around the court ruling: Just require workers to sign a paper agreeing that management does have the unlimited right to fire them at any time.

That legal trick is being tested in the court, and it ought be outlawed quickly. Management should not be allowed to require workers to sign away their legal protection against wrongful discharge to get or keep their jobs.

The latest Supreme Court ruling putting limits on how much money an abused worker can collect for being unfairly discharged makes some sense, since often the awards they get are unjustifiably inflated by their lawyers, who receive up to 40% of the amount they collect for their clients from sympathetic juries.

Now, however, the court has set the stage for state legislatures or Congress to enact much needed laws dealing with the complex issue.

New laws must protect non-union workers from being badly hurt by capricious, authoritarian bosses, some of whom even seem to get sadistic, ego-boosting pleasure in telling a loyal worker they dislike personally, “Get out, you’re fired!”

And unfortunately, the court’s finding that such workers can continue to go to court for justice means little for the average unfairly discharged worker. The procedure is far too costly and time-consuming for most of them.

A far better alternative is one proposed by Stanford law professor William Gould, the California Labor Federation, Paul Schrade of the American Civil Liberties Union and others who want mandated binding arbitration to help non-union workers get justice. Union workers can be protected against unjust dismissals by their contracts.

Like unionized workers, non-union employees should have the right to go before a neutral expert arbitrator who would decide whether the dismissal was justified.

Arbitration can be quick and relatively inexpensive. The arbitrator should be paid out of a specially created state arbitration fund. Workers who are found to have filed a malicious or capricious claim should pay the costs; the company should pay if it is found guilty of wrongful discharge.

Arbitration cannot be voluntary, as most management lawyers demand. If they have a choice, companies will just tell fired workers, “sue me,” knowing that most workers won’t go to court because of the time and money involved.

Of course, not all workers who are fired have legitimate complaints. Many are deservedly fired, and they know it. But quick arbitration would sharply reduce the cost of sorting out such cases.

The court’s latest ruling specifically invites legislation to deal with an issue that affects the lives of so many workers. An estimated 3 million workers are fired nationally each year for non-economic reasons.

Laws are needed not only to require arbitration for workers who contend that they have been unjustifiably fired and want their lost wages restored but also to allow arbitrators to award punitive damages to workers if they have suffered severe economic and emotional strain because of an egregiously unfair dismissal.

When Gov. George Deukmejian replaced most of the Bird court with conservatives, employers confidently waited for the new court under Chief Justice Malcolm M. Lucas to come to their rescue.

It took two long years for the Lucas court to make up its mind, but almost all lawyers for both management and workers predicted that management’s beloved right to fire workers “at will” would be restored.

It didn’t work out that way.

Management can rejoice that those hefty punitive damages sometimes awarded by the courts have been blocked. But the “fire at will” doctrine is surely gone unless the conservatives on the court allow management to get away with the legal maneuver requiring workers to sign away their right to a fair hearing after being discharged.

The court’s ruling taking away punitive damages as a deterrent to wrongful discharges makes it more urgent than ever for Congress or state legislatures to enact laws mandating arbitration as a relatively low-cost way to protect non-union workers, who make up over 80% of the U.S. work force.