By Michael Corkery and Jessica Silver-Greenberg
About the same time last year, Travis Lenkner, a lawyer in Chicago, had a similar realization. Arbitration clauses bar employees at many companies from joining together to mount class-action lawsuits. But what would happen, Mr.
Hit with about 2,250 claims in one day last summer, for example, the delivery company
Even as Supreme Court rulings over the last two decades have enshrined arbitration as the primary way that companies can hash out disputes, giving them enormous sway, consumer advocates and labor rights groups have criticized its inequities.
One of the biggest obstacles for consumers and workers is that payouts on individual arbitration judgments don’t justify the costs of mounting a complex case against a big company.
In the spring of 2018,
It was particularly notable because AT&T was at the center of a landmark 2011 Supreme Court ruling that anointed arbitration as a fair forum for legal disputes.
“From our perspective, the companies weren’t prepared to administratively handle that volume,” Mr.
A former lawyer at Boeing who clerked for Justice Anthony M. Kennedy on the Supreme Court, Mr.
“The conventional wisdom might say that arbitration is a bad development for plaintiffs and an automatic win for the companies,” he said. “We don’t see it that way.”
His firm’s first wave of cases
One of the firm’s latest showdowns is with
Among them was Victoria Diltz, a single mother in the Bay Area who works at a fast-food restaurant and as a housekeeper, and relies on making deliveries for
She said the company’s formula for paying workers was inconsistent, but as an independent contractor she had no way to challenge that.
“They know we are desperate for the cash, so we will do whatever,” said Ms. Diltz, 46, who lived out of her car for a period while working for
The company made other moves seeking to limit the damage from mass arbitration.
The International Institute for Conflict Prevention & Resolution, or C.P.R., was willing to allow
In a statement, C.P.R.
If they wanted to keep “dashing” for
But in a hearing, Judge Alsup questioned whether the company and its lawyers really believed that.
“Your law firm and all the defense law firms have tried for 30 years to keep plaintiffs out of court,” the judge told lawyers for Gibson Dunn late last year. “And so finally someone says, ‘OK, we’ll take you to arbitration,’ and suddenly it’s not in your interest anymore. Now you’re wiggling around, trying to find some way to squirm out of your agreement.”
“There is a lot of poetic justice here,” the judge added.