The musical instrument retail giant Guitar Center told their employees to sign a new arbitration agreement by the end of the month, otherwise they will be immediately terminated.
An arbitration agreement is a contract in which you agree to bring any legal claims you may have against your employer to arbitration, rather than filing a lawsuit in court, recurring to an “impartial arbitrator” to settle the matter . Basically meaning that all their employees will be giving away their rights to file a class-action lawsuit against the corporation over wage violations, workplace discrimination and unjust firings, among other disputes.
This kind of labor disputes aren’t a new thing for the music store, as they already reached the headlines when they were accused of violating federal labor law by “discriminating” against employees in Chicago, Las Vegas and New York; or using
“intimidation tactics” or cut benefits to avoid contracts with their unionized employees.
The document states to be a “fair and impartial process,” and discloses that Guitar Center will pay for the cost of the arbitration, unless the employee decides to hire their own lawyer. The issue arises when you take a look at the precedent of previous arbitration agreements and their rulings. Of 1,179 class actions that companies sought to push into arbitration, judges ruled in their favor in four out of every five cases. In 2014 alone, judges upheld class-action bans in 134 out of 162 cases, as the New York Times discovered on their research a few months ago.
Guitar Center made clear to their employees that signing this document is mandatory.
As a condition of new or continued employment, all new and current associates are required to electronically acknowledge and agree to be bound by the Arbitration Program and related agreement.
The lawyers representing the union are questioning the legality of the new policy and are considering filing a new charge and pursuing a new round of action.