See You In ... Arbitration?

Companies are increasingly forcing employees who wish to sue over contract and workplace disputes to submit to mandatory arbitration instead of going to trial. A pending Supreme Court decision may determine whether workers have a right to bring their cases to court.

In arbitration, the parties mutually select an individual or panel with expertise in the subject of dispute. There is often no opportunity to appeal.

Legal experts say employers like arbitration not only because it is cheaper and more efficient, but because they can use their superior experience to manipulate the system. The U.S. Equal Employment Opportunity Commission has questioned whether employees should be able to consent in advance to arbitrate all workplace claims before any particular dispute has arisen.

In Circuit City v. Adams, a case taken to the Supreme Court in November, the court is expected to determine if the 1925 Federal Arbitration Act allows employers to force employees to engage in arbitration or whether the act was intended for commercial disputes only.

Attorneys for the worker in the case, St. Clair Adams, are urging the Supreme Court to invalidate a job agreement signed by Adams when he began to work at a Circuit City in California in October 1995.

The case could affect millions of U.S. workers. An estimated 10 to 20 percent of the nonunion workforce is now subject to mandatory arbitration. The American Arbitration Association (AAA) says that 14,129 out of over 140,000 cases submitted to the AAA for arbitration in 1999 came from labor disputes.

No Break Today

Workers attempting to unionize the McDonald's food-processing plant on the outskirts of Moscow - known as the "McComplex" - say they have come under intense pressure from management to cease their organizing drive.

The tiny Russian trade union, which represents just 17 people of the 450-person workforce, was first organized in 1998, when the Russian economy crashed and workers' real wages, paid in rubles, dropped by up to 70 percent. Until then, observers say, McDonald's jobs were considered prestigious and difficult to come by.

The Independent reports that the McComplex services 58 McDonald's outlets in Russia, none of which are organized. Although the tiny union represents a potential threat by example, the union's members admit there exist significant barriers to expanding the union into the company's restaurants, citing a young workforce with a high turnover, and the lack of collective bargaining experience.

Despite the obstacles, the Independent reports that union members claim company officials have illegally obstructed their attempts to expand the union by singling out individuals for harassment, including putting up extra security cameras and wrongfully suing them for broken equipment. The workers are demanding pay raises and more rest periods.

Meanwhile, the Duma - the Russian parliament - has taken notice of the struggle, threatening the company with an audit of all its enterprises.

While asserting that the company follows all labor laws, McDonald's management refused to attend a Duma hearing, prompting further Andre Issaev, deputy head of the Duma's labor and social policy commission, to call for an investigation by the state prosecutor.

Feeling the heat, in early November company managers flipped for the third time, promising to bargain in good faith.

Big Oil on the Offensive

The small watchdog group that saved taxpayers millions of dollars by exposing oil industry underpayments is being rewarded with a rare Contempt of Congress resolution by oil state lawmakers.

Lawsuits filed under the False Claims Act by the Project on Government Oversight (POGO) along with two government whistleblowers forced Arco, Mobil and other oil companies to pay the federal government more than $438 million to settle royalty underpayment claims relating to drilling on federal property.

In addition, new Department of Interior regulations issued in response to the discovery of underpayments will take away the oil companies' ability to determine the royalty payment formula, instead basing it upon market value. The change is expected to increase royalty payments by an estimated $66 million per year.

After winning a $1.2 million settlement from Mobil, POGO divided the money with two federal employees who were among the first to object to the way the oil companies calculated how much they owed.

Representative Don Young, R- Alaska, says such payments are illegal, and has convinced the U.S. Justice Department to conduct its own investigation.

"We reported it to the Justice Department and IRS" says Beth Daley, POGO's director of public affairs, "but they [Young and other members of congress] continue to maliciously portray it as a secret deal."

Not surprisingly, Young is the House's number one recipient of contributions from oil and gas political action committees, according to the Center for Public Integrity.

"These attacks by Big Oil against a small watchdog group that saved the taxpayers millions of dollars are a small sign of what we can expect if George Bush, Dick Cheney and the slippery oil industry take over the White House," says Carolyn Maloney, D-New York, who held hearings on oil royalty cheating before a Government Reform Subcommittee in 1996.

- Charlie Cray