[Senate Hearing 111-396]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 111-396
 
 ``WORKPLACE FAIRNESS: HAS THE SUPREME COURT BEEN MISINTERPRETING LAWS 
      DESIGNED TO PROTECT AMERICAN WORKERS FROM DISCRIMINATION?''

=======================================================================



                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 7, 2009

                               __________

                          Serial No. J-111-55

                               __________

         Printed for the use of the Committee on the Judiciary




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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
HERB KOHL, Wisconsin                 JEFF SESSIONS, Alabama
DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
RUSSELL D. FEINGOLD, Wisconsin       CHARLES E. GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         JON KYL, Arizona
RICHARD J. DURBIN, Illinois          LINDSEY GRAHAM, South Carolina
BENJAMIN L. CARDIN, Maryland         JOHN CORNYN, Texas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
AMY KLOBUCHAR, Minnesota
EDWARD E. KAUFMAN, Delaware
ARLEN SPECTER, Pennsylvania
AL FRANKEN, Minnesota
            Bruce A. Cohen, Chief Counsel and Staff Director
                  Matt Miner, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
    prepared statement...........................................   185
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....     3

                               WITNESSES

de Bernardo, Mark A., Partner, Jackson Lewis, LLP, Washington, DC     8
Foreman, Michael, Professor & Director, Civil Rights Appellate 
  Clinic, Dickinson Section of Law, Pennsylvania State 
  University, University Park, Pennsylvania......................    12
Fox, Michael W., Shareholder, Ogletree, Deakins, Nash, Smoak & 
  Steward, P.C., Austin, Texas...................................    10
Gross, Jack, Des Moines, Iowa....................................     7
Jones, Jamie Leigh, Founder/Chief Executive Officer, The Jamie 
  Leigh Foundation, Spring, Texas................................     5

                         QUESTIONS AND ANSWERS

Responses of Mark A. de Bernardo to questions submitted by 
  Senator Sessions...............................................    28
Responses of Michael W. Fox to questions submitted by Senator 
  Sessions.......................................................    42

                       SUBMISSIONS FOR THE RECORD

Coleman, Francis T., Waffling Circuits, article..................    46
Davis, Daniel J., Gibson, Dunn & Crutcher, LLP, Washington, DC, 
  article........................................................    53
de Bernardo, Mark A., Partner, Jackson Lewis, LLP, Washington, DC    59
Foreman, Michael, Professor & Director, Civil Rights Appellate 
  Clinic, Dickinson Section of Law, Pennsylvania State 
  University, University Park, Pennsylvania......................    81
Fox, Michael W., Shareholder, Ogletree, Deakins, Nash, Smoak & 
  Steward, P.C., Austin, Texas...................................    95
Gross, Jack, Des Moines, Iowa....................................   136
Hill, Elizabeth, Dispute Resolution Journal, May/July 2003, 
  article........................................................   142
JAMS, Washington, DC:
June 26, 2009, article                                              150
August 2002, article                                                153
July 15, 2009, article                                              156
Jones, Jamie Leigh, Founder/Chief Executive Officer, The Jamie 
  Leigh Foundation, Spring, Texas................................   176
LexisNexis, New York University Law Review, Albany, New York:
    Estreicher, Samuel, December 1997, article...................   187
    Maltby, Lewis L., Fall 1998, article.........................   213
Mogilnicki, Eric J. and Kirk D. Jensen, Spring 2003, article.....   237
Townsend, John M., U.S. Chamber Institute for Legal Reform, 
  Washington, DC, October 2006, agreements.......................   257
U.S. District Court, Judicial Case load Profile, report..........   286
Westlaw, Dianne LaRocca, report..................................   287


 ``WORKPLACE FAIRNESS: HAS THE SUPREME COURT BEEN MISINTERPRETING LAWS 
      DESIGNED TO PROTECT AMERICAN WORKERS FROM DISCRIMINATION?''

                              ----------                              


                       WEDNESDAY, OCTOBER 7, 2009

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, Pursuant to notice, at 10 a.m., in room 
SD-226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, 
Chairman of the Committee, presiding.
    Present: Senators Specter, Franken, Sessions, and Grassley.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good morning. This week the U.S. Supreme 
Court met to officially begin its new term. While I talked 
about this yesterday at another Committee I thought we would 
have this hearing to highlight how decisions of the Supreme 
Court affect the everyday lives of Americans. And what we see 
on the headlines about a U.S. Supreme Court decision may look 
one way, but with the average Americans it can have quite an 
effect.
    Our hearing will focus on how a bare majority of the 
Supreme Court has overridden statutory protections to make it 
more difficult to prove age discrimination in the workplace. In 
two narrowly divided 5/4 decisions the conservative majority of 
the court threatens to eliminate more of America's civil rights 
in the workplace. Just as it eliminated Lilly Ledbetter's claim 
to equal pay, basically said a woman does not have to be paid 
the same as a man until Congress stepped in to set the law 
right.
    It is difficult that we have these laws on the books. For 
some time it worked very well to protect Americans and then 
time and time again, the very, very activist, Supreme Court, 
overturns them. Their recent decisions make it more difficult 
for victims of employment discrimination to seek relief in 
court, more difficult for those victims to get their day in 
court to vindicate their rights.
    For anyone that doubts that there is this activism in our 
courts and the effect it is having, they need to look no 
further than the decisions that are affecting two of our 
witnesses, Jamie Leigh Jones and Jack Gross.
    The Supreme Court's misinterpretation of the Federal 
Arbitration Act in the Circuit City case threatens to undermine 
the effective enforcement of our Civil Rights laws.
    When Congress passed the Arbitration Act, passed by a 
bipartisan majority, it intended to provide sophisticated 
businesses an alternative venue to resolve their disputes. That 
is what was intended.
    I know what was not intended. Congress never intended the 
law to become a hammer for corporations to use against their 
employees. But in Circuit City the Supreme Court allowed for 
just that.
    Now, after the Circuit City decision, employers are able to 
unilaterally strip their employees of their Civil Rights by 
including arbitration clauses in every employment contract they 
draft. Some have estimated that at least 30 million workers 
have unknowingly waived their constitutional and guaranteed 
right to have Civil Rights claims resolved by a jury by 
accepting employment which necessarily meant signing a contract 
that included such a clause in the fine print.
    There is no rule of law in arbitration. There are no 
juries, there are no independent judges in the arbitration 
industry. There is no appellate review. There is no 
transparency. And we are going to hear from Jamie Leigh Jones 
today, there is no justice.
    We will also hear from Mr. Gross. His case shows that for 
those employees who are able to preliminary open the courtroom 
doors, the Supreme Court then placed additional obstacles on 
the path to justice.
    Let me just tell you a little bit about it. After spending 
32 years working for an Iowa subsidiary of a major financial 
company, Jack Gross was demoted, and his job duties were 
reassigned to a younger worker who was significantly less 
qualified.
    In his lawsuit under the Age Discrimination Act, a jury 
concluded that age had been the motivating factor in his 
demotion and they awarded him nearly $50,000 in lost 
compensation. But a slim, activist, conservative majority of 
the Supreme Court overturned the jury verdict and decided to 
rewrite the law. The five justices adopted a standard that the 
Supreme Court itself had rejected in a prior case and the 
Congress had rejected when we enacted by bipartisan majority 
the Civil Rights Act of 1991.
    So I am concerned that the Gross decision will allow 
employers to discriminate on the basis of age with impunity as 
long as they ``get other reasons.'' I fear in the wake of 
Gross, few, if any, of these victims of age discrimination will 
achieve justice.
    The worst part about it, the lower courts have been 
applying the rationale endorsed in this case to weaken other 
anti-discrimination statutes as well.
    When President Obama signed the Lilly Ledbetter Fair Pay 
Restoration Act into law earlier this year, he reminded us of 
the real world impact of Supreme Court decisions on workplace 
rights. He said that economic justice isn't about some abstract 
legal theory or footnote in a casebook. It is about how our 
laws affect the daily reality of people's lives, their ability 
to make a living and care for their families, achieve their 
goals. He also reminded us of making our economy work. That 
means making sure it works for everyone. In that case he was 
saying that women should be paid the same as men, contrary to 
what the Supreme Court has said.
    Senator Sessions.

STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM THE STATE 
                           OF ALABAMA

    Senator Sessions. Thank you, Chairman Leahy. I look forward 
to this panel. We are talking about some important issues. 
Fairness in courts is essential for justice in America. It is 
what people expect. The small person, the individual, should 
have clear protections and rights that they can assert in an 
employment case. We all believe in that.
    But we do set up rules. And employers do, on occasion, have 
to reduce work forces, no matter how painful that might be. And 
it causes pain for people who lose their jobs and often they 
assert whatever rights they believe they have to maintain their 
employment.
    So I think those are things that are just inevitable in our 
business community today. Having clarity, having appropriate 
principles to guide employers and the courts in deciding these 
matters is important.
    So this kind of discussion, I believe, is worthwhile, Mr. 
Chairman. I just do not believe that we should see every 
decision on termination of employment or other business-related 
matters as somehow necessarily a discrimination. It's just a 
choice of how to go forward.
    I also would object to a view that arbitration is not a 
healthy way to handle many of these cases. One survey by the 
American Arbitration Association showed that employees won 63 
percent of the cases in arbitration and that same year only 14 
percent of the employees bringing claims in Federal court 
prevailed. The results of arbitration are similar to jury 
verdicts in terms of value to the employee and also can be less 
expensive for the employee and the legal fees can be less in 
sizeable than the employee.
    So I think the idea that is assumed that arbitration 
automatically is a disadvantage to an employee is not true. 
And, in fact, the opposite may well be the case. So the Supreme 
Court has affirmed arbitration and I hope that as we move 
forward we do not undevelop ideas and strategies and 
legislation that undermines something that is important.
    If every employment dispute, employee/employer dispute, 
ends up in Federal court, I would just note parenthetically, we 
are really going to have a problem with the case loads in 
Federal court. And that is really not what Federal courts are 
for, to settle every employment dispute that exists out there, 
and there are so many of them.
    So, Mr. Chairman, I look forward to this panel.
    Senator Grassley has got a meeting he has to go to in a few 
minutes and I believe he would like to introduce one of the 
panelists early on in this process if you could do that.
    I would note that I am going to have to slip out in a 
little bit because Alabama will be adding to the Statuary Hall 
a statue of Helen Keller, the person who has done more, I 
think, than any other person in history throughout her life to 
highlight the abilities of the disabled. So it is an exciting 
day for us today and we will do that at 11. I will need to get 
over there a few minutes early.
    So I thank you for that. And you know as we review her life 
and that great movie and all that developed out of her life 
story, you really do realize that persons who may not be able 
to do everything can do so many things exceedingly well. And, 
they can contribute so fabulously to our National productivity. 
The Disabilities Act that many of you worked on to pass has 
really given so many employees a right to full participation in 
the American economy.
    So, thank you, Mr. Chairman, I look forward to the hearing.
    Chairman Leahy. I appreciate that and you should be there. 
I walked through the Rotunda late last night and it is all set 
up for that statue.
    I would say, as a child I sometimes, as a child will, felt 
badly because I had been born blind in one eye. Then I saw the 
Helen Keller story and I realized how greatly advantaged I was, 
but also what she did for all the rest of us.
    Senator Grassley, you wanted to introduce the panel. 
Please, go ahead, sir.
    Senator Grassley. If I could. I will not take any time to 
discuss policy because we will have a chance to review the 
testimony of all the witnesses. But one of the witnesses is a 
constituent with a famous political name in Iowa, even though 
he is not politically inclined, maybe himself. But Mr. Gross is 
with us today. So I wanted to say a couple words because of him 
and show him the courtesy. I will also be meeting with him in 
my office this afternoon at my appointment schedule.
    Jack Gross now lives in Creston, Iowa, and he is here today 
to testify about his case before the Supreme Court last year. 
He is still living in the part of the state he was born in. He 
was born near the community of Material. Ayr, Iowa. Mr. Gross 
is a graduate of Drake University and was employed by the Iowa 
Farm Bureau for over 30 years.
    His great uncle happened to be Have. R. Gross. Your first 2 
years in the Senate would have been Mr. Gross' 25th and 26th 
year in the U.S. House of Representatives. Then he retired and 
I took his place in the House of Representatives.
    Mr. Gross is here today to testify about his experience in 
litigating the age discrimination employment case from Iowa 
Federal District Court to the Eighth Circuit Court and then to 
the U.S. Supreme Court just very recently. Unfortunately, 
because of Finance Committee work, I won't be able to be here 
beyond about 10:27. But I look forward to either hearing his 
testimony or else reading about it and visiting with him in the 
afternoon to find out first-hand how he has been impacted by 
his employer and by the courts.
    Chairman Leahy. Thank you.
    Senator Grassley. And thank you, Mr. Chairman.
    Chairman Leahy. I know I enjoyed meeting both Mr. and Mrs. 
Gross yesterday.
    Our first witness will be Jamie Leigh Jones, the founder 
and CEO of the Jamie Leigh Jones--is it Lee or Leigh?
    Ms. Jones. Leigh.
    Chairman Leahy. Leigh Jones--Jamie Leigh Jones Foundation. 
It is a nonprofit ``organization'' wanted dedicated to helping 
Americans who are victims of crime while working abroad for 
government contractors and subcontractors.
    Ms. Jones currently teaches math, science, and social 
studies to middle school children.
    My children are all grown up and now I have at least one 
grandchild and soon a second one in that. I know how important 
the middle school is.
    So, please, Ms. Jones, go ahead.

STATEMENT OF JAMIE LEIGH JONES FOUNDER/CHIEF EXECUTIVE OFFICER 
            THE JAMIE LEIGH FOUNDATION SPRING, TEXAS

    Ms. Jones. Chairman Leahy, Ranking Member Sessions, 
distinguished members of the committee, thank you for the 
opportunity to testify before you today. I am here today to 
share with you a personal tragedy. I do this to bring awareness 
to legislation--the Arbitration Fairness Act--introduced by 
Senator Feingold, which is designed to ensure that no American 
will be deprived of their constitutionally guaranteed right to 
the fair administration of justice.
    At an age barely old enough to vote I took a job in Iraq 
with Halliburton. When hired I signed an employment contract. 
Days later I was sent to Camp Hope in the Green Zone in 
Baghdad, Iraq to support Operation Iraqi Freedom. Before my 
deployment Haliburton showed me photographs of the trailer I 
would live in, a suite with one other woman and a shared 
bathroom.
    Upon arrival I was assigned to a barracks which was 
predominantly male. I found myself subject to repeated catcalls 
and partially dressed men while I was walking to the restroom. 
I complained to Halliburton managers about these living 
conditions and asked them to move me into the quarters that I 
had been promised. My requests were not only ignored, they were 
mocked.
    On the fourth day in Iraq I was socializing outside the 
barracks with several other contractors Halliburton had sent to 
the Green Zone. The men known only to me as Halliburton 
firefighters offered me an alcoholic drink which I took. I 
remember nothing after taking a couple of sips.
    When I awoke in my room, I was naked, sore, bruised, and 
bleeding. As the grogginess wore off, and I returned from the 
bathroom--where evidence that I had been raped was abundantly 
clear to me--I found a naked firefighter still laying in the 
bunk bed. I was shocked. How could he have raped me like that 
and not even bothered to leave.
    I know now that this is because he knew there would not 
likely be punishment for his crime. There had never been 
before.
    After reporting the rape to KBR operations coordinator I 
was taken to the Army CASH where a rape kit confirmed that I 
had been assaulted both vaginally and anally by multiple 
perpetrators. The Army doctor then handed my rape kit to KBR 
security personnel.
    I was then taken to a container where I was held captive by 
two armed guards. I requested a phone from KBR officials who 
denied me this request.
    Eventually one of the guards gave in to my pleading and 
allowed me to use his cell phone. I called my father who then 
contacted Congressman Ted Poe. Congressman Poe dispatched the 
State Department officials to ensure my release and safe return 
to the United States.
    Prior to my return to the U.S. Halliburton management told 
me that I could either stay and get over it or go home with no 
guarantee of a job in Houston or Iraq.
    The severity of my physical injuries necessitated my 
decision and I went home in the face of threats of termination, 
which later proved to be true.
    When I returned home the pains in my chest continued and I 
sought medical help. It was confirmed that my breasts were 
disfigured and my pectoral muscles had been turned. 
Reconstructive surgery was required.
    After I filed a complaint with the Equal Employment 
Opportunity Commission they conducted an investigation and 
concluded that I had been sexually assaulted, that the physical 
trauma was evident, that Halliburton's investigation and 
response had been inadequate.
    I turned to the civil court system for justice when the 
criminal justice system was slow to respond. When my lawyers 
filed the suit they were met with Halliburton's response that 
all of my claims were to be decided in arbitration because I 
had signed away my right to a trial by jury at such an early 
age. Halliburton said that my employment contract included a 
pre-dispute, binding arbitration clause that required me to 
submit all my claims in mandatory, secret arbitration. I didn't 
even know that I had signed such a clause. But even if I had 
known, I would never have guessed that it would cover claims of 
sexual assault and false imprisonment.
    Also, I had no choice but to sign this contract because I 
needed this job. I had no idea that the clause was part of the 
contract, what the clause actually meant, or that I would 
eventually end up in this horrible situation.
    I fought the forced arbitration clause and just last month 
after almost 4 years of litigation, the Fifth Circuit ruled 
that my--that four of my claims against Halliburton relating to 
the rape were not covered by the clause in my employment 
contract. The rest of my claims, including my discrimination 
claims under Title V--Title VII, sorry, had been forced into 
binding arbitration. Just yesterday Halliburton filed an appeal 
to this decision.
    The problem of forcing claims like mine into a secret 
system of binding arbitration goes well beyond me. Numerous 
other women who were assaulted or raped then retaliated against 
for reporting those attacks and forced into secret arbitration 
have contacted me for help through the Jamie Leigh Foundation. 
Even when victims pursue their claims in arbitration, the 
information is sealed and kept confidential. The system of 
arbitration keeps this evidence from ever coming to public 
light and allows companies like Halliburton to continue to 
allow the abuse of their employees without repercussion or 
public scrutiny.
    Distinguished members of the committee, you have the power 
to stop these abuses that hide behind the veil of arbitration. 
And I hope that you take this opportunity to protect employees 
and stop this practice from continuing.
    Thank you for your time.
    Chairman Leahy. Thank you. And we will go through each of 
the witnesses and then back to questions. And I will have some 
about obviously Halliburton acting as a government and law unto 
itself, something they did in a number of areas, as we have 
known, in Iraq.
    Mr. Gross, you have already been introduced by Senator 
Grassley. I had the opportunity of meeting you and your wife 
yesterday. Please, go ahead, sir.

            STATEMENT OF JACK GROSS DES MOINES, IOWA

    Mr. Gross. Thank you, Senator or Chairman Leahy. I really 
appreciate the opportunity to be here. Thank you, Senator 
Grassley for your remarks. I join many Iowans in saying how 
proud we have been to have you as our Senator for a great many 
years.
    Mr. Franken, I appreciated your remarks about my case 
during the Sotomayor debate. I was very impressed with the 
detailed knowledge that you exhibited in such a short time 
about what had happened.
    Mr. Sessions, I appreciate your comments also. I kind of 
come from the white, corporate world and was asked a question 
during our trial if I didn't really think that corporate 
management should have the right to make decisions that 
affected the bottom line for their shareholders and their 
employees. And my answer was, absolutely, I believe that; as 
long as they stay within the confines of the law. And that was 
why we were there.
    I wanted to participate in the process. I feel like I'm a 
little bit of an unlikely candidate simply because mine is not 
the face that is normally associated with discrimination. But 
age is discrimination in its own right.
    I certainly never imagined that my case would end up here 
when it all started nearly 7 years ago. That's when my 
employer, Farm Bureau Insurance, or FBL merged with the Kansas 
Farm Bureau. Apparently not wanting to add any more older 
workers to their workforce, when Kansas came on board, they 
bought out all the Kansas employees, claims employees who were 
over 50 years of age. At the same time, in the Iowa Farm Bureau 
and the other original states they simply demoted every one of 
us who were over 50 and had a supervisory level or above. A 
pretty clear signal to all of us that if you are over 50 they 
would kind of like to get us out of there.
    I was 54 at the time and I was swept out with the whole 
thing. Even though I had 13 consecutive years of performance 
reviews in the top 5 percent of the company, and had dedicated 
my working life to making Farm Bureau a better company.
    My contributions were very well documented including I had 
just completed the development of taking all of our policies, 
combining them into one unique policy, a package policy. It's a 
policy that Farm Bureau is now using to base all of their 
future growth upon.
    My position was, as stated, given to a much younger and 
newer employee with far less experience and education. Age was 
the obvious reason that I filed a complaint and two years later 
a Federal jury spent an entire week listening to all the 
testimony, seeing all the evidence, being instructed on the 
law, the ADEA, and they were even admonished to rule against me 
and in favor of Farm Bureau if they could find any reason, 
other than age, for Farm Bureau's actions. Still the verdict 
came back in my favor and I thought in 2005 that my ordeal was 
over.
    Then it started getting lawyered to death. Eventually 
ending up in at the Supreme Court in March of this year over 
one single issue in the jury instruction. And that was whether 
direct evidence was required in a mixed motive context. That's 
what--that's the question that the Supreme Court accepted sui 
juris on, the one that we expected to get addressed.
    However, instead of addressing that one issue, the court 
broke with its own protocol and precedent to literally hijack 
my case and use it as a vehicle to water down the law written 
by the branch of government closest to the people, yourselves.
    We came here in March believing in the rule of law and its 
consistent application to all areas of discrimination. We were 
disappointed and I was personally disillusioned by a lot of 
what I observed at the court level.
    We believe that this issue does transcend partisan politics 
and presents an opportunity for both parties to come together 
to protect their aging constituents back home in the workforce.
    On a personal level, this has been a rough ride. But what 
is becoming even harder is watching the collateral damage being 
inflicted by older workers on the courts by this ruling. 
Because of their decision my legacy to working Americans will 
be having my name associated with pain and injustice inflicted 
on older workers because it will be nearly impossible to 
provide the level of proof now ascribed to this one type of 
employment discrimination.
    That is a heavy burden to place on one guy who simply 
sought to right one act of discrimination. I wasn't the one who 
changed the law, five justices did. I can only urge Congress to 
step up, like they did in the Ledbetter case and restore the 
ADEA to its original intent.
    Thank you very much.
    Chairman Leahy. Thank you very much, Mr. Gross.
    Mark de Benardo is a partner at Jackson Lewis here in 
Washington, am I correct on that?
    Mr. de Bernardo. That's right.
    Chairman Leahy. And he served as Director of Labor Law for 
the U.S. Chamber of Commerce. Please go ahead.

 STATEMENT OF MARK A. DE BERNARDO PARTNER, JACKSON LEWIS, LLP 
                         WASHINGTON, DC

    Mr. de Bernardo. Thank you, Mr. Chairman. Thank you, 
members of the committee, and Ranking Minority Sessions.
    I am pleased to be here today to testify in strong support 
of the use of mediation and arbitration as an adjunct to our 
jurisprudence system in America, in support of ADR in 
employment, in support of the Supreme Court's decision in 
Circuit City v. Adams, and in opposition to S. 931.
    The reason that we oppose S. 931 is that if this 
legislation were enacted, effectively arbitration in employment 
in America and in other contexts would end. That is the net 
effect.
    It is my firm and unequivocal belief that the use of ADR is 
both pro employer and pro employee. And when implemented 
appropriately, it's a tremendous asset to both employee 
relations and our system of justice.
    Jackson Lewis has a long and proud record of support for 
effective and equitable ADR programs as an alternative to 
costly, time-consuming, deleterious, and relationship 
destructive litigation.
    I want to underscore that the reality is, again, that S. 
931, if it were enacted, effectively would end arbitration in 
America, would abolish this practice in the non-union sector. 
Organized labor has long embraced binding arbitration as a 
foundation of union representation. And my law firm and the 
organization I represent agree in that context.
    The seminal question is, should employers and employees be 
able to engage in mediation and mandatory, binding arbitration 
for employment disputes as alternatives to litigation. The 
seminal answer is, absolutely. ADR in employment programs are 
flourishing. When implemented appropriately they are decisively 
in employees' best interests, and yes--and yet S. 931 would 
effectively deny this option to employers and employees.
    Given the costs, delays, and divisiveness of employment 
litigation the more sensible and conciliatory options 
preferable for employers and for their employees, the net 
result of the use of ADR is more employee complaints resolved 
and addressed.
    As many as 20 times, if you take a look at the experience 
in ADR programs, dispute resolution programs across the 
country, what you have is many more complaints that are raised 
by employees, grievances that are addressed, they are addressed 
in a much more civil fashion, they are addressed much more 
comprehensively, and are resolved on a much quicker basis. 
Thus, again, complaints addressed sooner with less tension, 
less turnover.
    What you have is that litigation is a job destroyer. 
Arbitration is a job preserver. In the typical situation as 
discussed in the testimony at length, arbitrations take 104 
days. Litigation in the Southern District of New York if you 
have an employment law case, typically takes 2.8 years for that 
case to be heard. The backlog in the Federal court system is 
huge. One-third of the backlog in the Federal court system are 
employment law cases.
    The old adage that ``justice delayed is justice denied'' 
certainly is true in this case. So you have many more employee 
grievances that are addressed, as many as 20 times as many 
addressed much sooner and addressed in a context which is much 
more amicable and more likely to resolve the situation and 
preserve the job.
    It improved morale; 83 percent of employees support ADR in 
the workplace. It is a popular concept for those employers who 
have adopted it and adopted it appropriately. It provides for 
more effective communication.
    Chairman Leahy. In your comments----
    Mr. de Bernardo. Sure.
    Chairman Leahy.--you also tell how arbitration would be 
helpful to somebody like Ms. Jones when her employer 
Halliburton, in effect, said that rape and sexual assault has 
to just be considered part of the job.
    Mr. de Bernardo. There are literally millions of employees 
that are covered by ADR programs in the United States. There 
are 160 million workers in the United States. I understand the 
situation alleged by Ms. Jones is awful, tragic. I agree with 
her that it was a tragedy that she alleged. This is a terrible 
situation. This is an assault. I think those that are engaged 
in rape or heinous crimes such as rape should be punished----
    And, in fact, there is recourse. I am not here representing 
anyone involved in that case, I am not involved in that case. 
Like Mr. Gross, Ms. Jones has had her day in court and maybe 
more than she wanted, it goes on and on and on, I understand 
that.
    What we are talking about is the concept of Alternate 
Dispute Resolution programs overall. In that regards what you 
have is a concept that is fully entrenched in the American 
workplace and is popular across the board with almost all 
constituencies; employers, employees, parties to arbitration. 
You know, more than 70 percent of those surveyed--as discussed 
in the testimony, Mr. Chairman--more than 70 percent of those 
who have engaged in employment arbitration favor the system and 
nearly two-thirds say that they would do it again.
    So, you know, it has a very positive role to play. The 
facts of one incident and one individual incident, as terrible 
as they may be, don't necessarily reflect on whether or not as 
a concept in America today we should embrace or withdraw from 
the concept of arbitration in employment.
    And this was my final point that I was saying in this one 
section is that ADR in employment results in better work 
places. It's an early warning system to employers on what may 
be bothersome in the workplace. Typically the types of 
complaints that come in, employees have a situation where they 
are concerned, you have informal mediation, formal mediation, 
if necessary, arbitration, those issues are resolved. Employers 
might end up being better employers and addressing and 
correcting situations that need to be addressed and corrected.
    Circuit City, I know we are going to talk about that. But 
Circuit City was a decision that was wholly consistent with 
past precedent. It was wholly consistent with all of the other 
Circuits except for the Ninth Circuit decision and 
appropriately decided.
    And I mentioned how litigation results in----
    Chairman Leahy. I know I interrupted your testimony. So 
I've given you two extra minutes.
    Mr. de Bernardo. OK. Thank you, Mr. Chairman.
    Chairman Leahy. Your whole statement will, of course, be 
made a part of the record.
    Mr. de Bernardo. I appreciate that.
    Chairman Leahy. Michael Fox is an attorney in the Austin 
Branch of the firm of Ogletree, Deakins, Nash, Smoak, and 
Stewart in Texas. Mr. Fox, it is good to have you here.

 STATEMENT OF MICHAEL W. FOX, SHAREHOLDER, OGLETREE, DEAKINS, 
          NASH, SMOAK, & STEWART, P.C., AUSTIN, TEXAS

    Mr. Fox. Thank you, Chairman Leahy, Ranking Member 
Sessions, and members of the committee, I am pleased and 
honored to be here today.
    I am a trial lawyer from Texas.
    Chairman Leahy. Mr. Fox, is your microphone on?
    Mr. Fox. Sorry about that. Chairman Leahy, thanks for the 
invitation. I am honored to be here.
    I am a trial lawyer from Texas. For more than 30 years I 
have represented employers in labor and employment law matters. 
I have handled discrimination claims against employers in jury 
trials and non-jury proceedings. A distinction that I think is 
important and one reason I strongly believe that reversing the 
Gross v. FBL Services case would be a tragic mistake.
    I have had a ring-side seat to the changing American 
workplace. There is no question that it is not only changed, 
but is significantly better particularly for women and 
minorities than when I was licensed to practice law in 1975.
    There is also no question that the Civil Rights Act of 1964 
and the other Federal legislation that followed have been 
significant and positive factors in that change.
    More germane to today's discussion there should also be no 
question that the law which has provided the base for the 
improved workplace has developed and flourished under the 
interpretation and guidance of the Supreme Court.
    Turning to the Gross decision and the proposed legislative 
remedy, there has been much written about the Supreme Court's 
holding that age discrimination plaintiffs are not entitled to 
a mixed motive instruction. But almost all of the criticism 
fails to acknowledge the significance of the difference between 
the ADEA and Title VII and the spotty history of the mixed 
motive theory.
    More importantly, none makes the distinction between a 
theory that was developed for cases that were to be tried by 
judges and is now being applied to cases that are tried before 
juries.
    I have covered it more extensively in my written testimony, 
but briefly, the mixed motive analysis was first introduced in 
Price Waterhouse v. Hopkins, at a time when Title VII cases 
were non-jury.
    Two years later Congress codified it for Title VII, but did 
not include the Age Act in that section of the amendment. 
Congress also provided, for the first time ever, that Title VII 
cases would now be tried to juries, not to judges. The end 
result is, that when the Gross case came before the court this 
past summer, it had the advantage of seeing how a theory that 
was developed for cases to be tried by judges had worked in the 
real world of jury trials and adopted a more common-sense rule 
that actually does little to alter the real world of age 
discrimination litigation.
    One reason why I say the court adopted a common-sense rule 
is because of the difficulties the courts have had in trying to 
adjust the mixed motive analysis to jury trials. From my 
experience in the courtroom, the most important thing for the 
effective enforcement of anti-discrimination laws through jury 
trials is a method of instructing the jury which is simple, not 
complex; practical, not theoretical. The mixed motive 
instruction is the opposite. It focuses attention on legal 
theories, not the facts, and is both complex and theoretical. 
In short, it is the antithesis of what makes for an effective 
jury instruction.
    The net result is that the mixed motive analysis created 
for a non-jury system which is applicable to Title VII does not 
work for jury trials. In the real world the courts have had 
significant difficulty in applying it. It is not widely used by 
plaintiffs and may not really be needed.
    According to one plaintiff's lawyer who does still advocate 
the legislative overturning of Gross, as far as the loss of 
getting a mixed motive instruction in an age discrimination 
case, most plaintiffs' lawyers don't care. It's too confusing 
to the jury.
    In closing, before using Gross as a reason to expand the 
use of the mixed motive analysis, which the proposed 
legislation introduced yesterday, would do to the entirety of 
Federal employment laws, not just age discrimination, I would 
respectfully suggest that all those interested in the 
enforcement of the anti-discrimination laws, which includes 
people on both sides of the docket would be better served by a 
closer examination of how successful and necessary the concept 
of a mixed motive instruction created in a non-jury world has 
actually worked in the real world of jury trials, the one that 
we actually have, before taking any action to extend this 
concept to the entire body of Federal employment law.
    I would also say that having participated in arbitration I 
totally support the testimony of Mr. de Bernardo about its good 
impact on the workplace.
    Chairman Leahy. Thank you very much. And with everybody, 
the whole statement, of course, will be part of the record.
    Our last witness is Professor Michael Foreman who is the 
Director of the Civil Rights Clinic at Penn State's Dickinson 
Section of Law. I understand, Professor, you teach a course on 
employment discrimination there; is that correct?
    Mr. Foreman. Yes, I teach advanced employment 
discrimination law.
    Chairman Leahy. Thank you very, very much.
    Please go ahead, sir.

STATEMENT OF PROFESSOR MICHAEL FOREMAN, DIRECTOR, CIVIL RIGHTS 
 APPELLATE CLINIC, DICKINSON SCHOOL OF LAW, PENNSYLVANIA STATE 
           UNIVERSITY, UNIVERSITY PARK, PENNSYLVANIA

    Mr. Foreman. Chairman Leahy, Ranking Member Sessions, and 
members of the committee, I welcome this opportunity to address 
these important issues and particularly the Gross decision and 
the Pyett decision and that line of cases that deal with pre-
dispute binding arbitration. And particularly with an eye to 
has the court been misinterpreting Congressional intent and the 
meaning of these statutes? In my view that's a resounding yes 
in these cases they misinterpreted Congressional intent and 
they distort the purposes of these laws.
    I want to turn first to Gross. And I would be remiss if I 
don't point out that in Gross the majority of the Supreme Court 
took on an issue that was not before them. It was not in the 
petition for cert. It was not briefed. It was not briefed by 
either side. And, indeed, it was exactly opposite of what the 
Federal Government and the Solicitors Office recommended that 
they do.
    Despite all that, they chose to take on this case. And they 
sent, I think, a very important message to the Senate that if 
you want specific protections against discrimination in the 
workplace you, Congress, have to be very, very specific.
    And many of us believe you have been specific. But for this 
majority they say, no, not specific enough. It is very clear 
that Congress did not intend age discrimination to be treated 
differently from any of the other types of discrimination. But 
despite that, the majority concluded, in Gross, that you could 
no longer prove that age was a motivating factor. That is not 
enough any more in an age context.
    And in Mr. Gross' case he proved this was not 
discrimination in the area--in the air. He proved that this was 
a motivating factor and the jury made that conclusion. So 
contrary to my colleague's belief, the jury can deal with these 
issues and they deal with them every day. They had dealt with 
them.
    This is a standard that the Supreme Court rejected in Price 
Waterhouse, that Congress rejected in the Civil Rights Act of 
1991 and indeed they rejected almost 45 years ago when the 
Title VII and they rejected it solely because of language.
    Now, Chairman, you indicated one of the things we are 
trying to sort through is how do we sort the difference between 
what the headlines say and the reality. Well, the headlines 
were very clear, ``Gross makes it much more difficult for 
Plaintiffs to prevail in age discrimination cases.'' Another, 
``Supreme Court majority makes it harder to prove 
discrimination.'' Another quote, ``The plaintiffs' job in court 
will be much more difficult.''
    Now, how do these headlines match reality? Well, the court 
cases following that match perfectly. A case out of the Sixth 
Circuit which I have cited in my materials, ``In the Wake of 
Gross'' and this is a quote, ``it is not enough to show that 
age was a motivating factor.'' Another court quote, ``This 
court interprets Gross as elevating the quantum of causation 
required under the ADA.''
    So it is very clear that what we heard about raising the 
burden of proof is in fact what happened. And it is leading to 
very strange, nonsensical results. I will cite just two quick 
cases. Because many courts are taking what the Supreme Court 
said and now saying, it must be the sole factor.
    In the Culver case where a person alleged discrimination 
because they were over 40 years old and race, the court says, 
well, you cannot win your age claim because you've pled another 
claim over here. You were out of court at the get-go. There is 
another line of cases that follow that line of cases.
    The third thing it does is it calls into question the 
jurisprudence under hundreds of discrimination statutes in 
Federal law and state law that used the term ``because of''. 
They had been interpreted consistently to mean, if the 
protected classification infecting the decision was a 
motivating factor, that is a violation of law, we will fight 
about damages. After Gross that is no longer the case.
    Turning quickly to the pre-dispute binding arbitration 
issue, this Congress worked for decades to come up with 
discrimination laws that provided open-forum, jury trials 
damages. You've also recognized that pre-dispute--that 
arbitration may have a role when you passed the Civil Rights 
Act. But I don't believe Congress ever envisioned that role to 
be pre-dispute, binding arbitration agreements placed in 
employee handbooks, in applications for employment, and 
basically shoved down employees' throats with no--no--and I 
stress that--consent.
    I want to address, very quickly, some of the statistics 
that I know my colleagues laid out about the importance of 
binding arbitration and how it is good for employees. Those 
studies deal with situations where a dispute has arisen and the 
person voluntarily enters into the agreement. And in those 
cases it is usually senior managers that have done this. They 
find arbitration to be good, but they have a dispute and they 
have volunteered to do it. That is not the case for most blue-
collar workers. They have no choice. They have to give up a 
paycheck. In today's economy, they may have to choose between 
having a job and not having health care because they won't get 
the job if they refuse to sign a binding arbitration agreement.
    In this area, also, the court has sent a message to 
Congress that we are going to force people into employment 
binding arbitration unless you, Congress, tell us differently. 
They said that explicitly in the Pyett case. And to paraphrase 
Justice Ginsberg from the Ledbetter case, when you get that 
challenge thrown down, ``the ball is in Congress' court.''
    I stand here ready to answer any questions on either the 
binding arbitration or on the Gross decision. And I thank you 
for the opportunity to address the committee.
    Chairman Leahy. Thank you very much, Professor. You echoed 
a point I had made earlier and actually made yesterday and 
actually made a number of times on the Gross case that the 
Supreme Court seemed to be looking for an ability to come out 
with law that they wanted to make. I'm not trying to put words 
in your mouth, but, don't you find it unusual that a CERT was 
granted on a different reason, the sides did not argue this 
issue, it was not part of the debate, the Solicitor General did 
not, and yet they reached the decision they did. Is that a 
typical thing in the Supreme Court?
    Mr. Foreman. That is extremely atypical to the extent that 
the majority dropped a footnote to try to explain why they were 
talking away from this and they were called to task 
appropriately by the dissent in that case. That the Supreme 
Court grants CERT on a very specific issue. The issue was--I 
don't want to say, ``a no brainer'' but the issue that they 
granted CERT on was this whole issue on the age context. You 
need direct evidence in order to get a mixed motive instruction 
to the jury. That was what they granted CERT on. That's what--
there were probably 40 briefs filed. That's what everyone 
briefed. No one saw this decision coming. And a five-person 
majority walked out of their way to take this on and change the 
burden of proof in all age cases and change possibly the burden 
of proof on all employment discrimination cases where you have 
not specifically said there is a motivating factor standard of 
proof.
    Chairman Leahy. I know at the time I was pretty surprised 
with such an activist court. And it acting as a legislative 
body and a judicial body all at once.
    And I guess maybe as a Vermonter I am somewhat old 
fashioned. I think of the judiciary acting as a judiciary, the 
legislative body acting as a legislative body, the executive is 
the executive body and not have the judiciary become the 
legislative body too. It makes it--having argued an awful lot 
of appellate cases in the Second Circuit in the Vermont Supreme 
Court, I would find myself at somewhat of a disadvantage if 
court decided that, gosh you have a nice case. We know what you 
are supposed to talk about, but we've decided to do something 
entirely different. It puts both sides pretty much at a 
disadvantage unless they have already made up their mind to 
rule for one side.
    Mr. Foreman. And, if I may, it raises this other issue 
that--and I need to be delicate because I'm talking to the 
Senate, but by the same token, that the court, the majority 
specifically says, you did not say in 1991 that this would be 
the causation standard in the age context. Therefore we are not 
going to adopt what virtually every court had said the standard 
was. We are going to ignore what the meaning of the 1991 law 
is.
    Chairman Leahy. Of course that--don't worry about being 
delicate with the Senate.
    [Laughter.]
    Chairman Leahy. The hundred of us certainly aren't with 
each other at all.
    [Laughter.]
    Chairman Leahy. You should sit in on some of our private 
meetings.
    Mr. Foreman. Well, they took you to task and said, go ahead 
and move forward and change the law if you don't like what 
we've done.
    Chairman Leahy. But they also overruled the precedent of 
every other court including some of their own decisions. I had 
never had any problem with the law as written. I mean, this 
came out of the blue. It overturned a whole lot of cases. 
Everybody else seemed to understand what the--as did four of 
the nine members of the Supreme Court what the law was. Am I 
correct?
    Mr. Foreman. Yes, you are correct in a point. But I don't 
want us to lose sight of the tentacles of the Gross decision 
because they reach very deep. And I don't want to get bogged 
down on legalese but there is a case----
    Chairman Leahy. I just have a----
    [Simultaneous conversation.]
    Mr. Fox. Mr. Chairman----
    Chairman Leahy. If I wasn't worried about the tentacles of 
the case, we wouldn't be holding this hearing today.
    Mr. Fox. Mr. Chairman.
    Mr. Foreman. There's a case called McDonnell Douglas v. 
Greene that has been cited thousands, tens of thousands, it is 
a standard way to prove discrimination cases, age, race, sex, 
we teach it in law school every day. The Supreme Court dropped 
a footnote and said, we don't acknowledge whether the McDonnell 
Douglas standard even applies to these age cases. And the lower 
courts are now taking that and running with it and putting a 
different burden on age discrimination cases and ignoring the 
McDonnell Douglas. It is so deep that the Congress really must 
act to fix it.
    Chairman Leahy. Mr. Fox, you wanted to say something?
    Mr. Fox. Yes. It is not really my role to defend the 
Supreme Court. I think they can do it capably themselves. But I 
would point out that if they had answered the question that 
they granted CERT on, that would have presumed the answer to 
the question that they ultimately answered in the reverse. 
Since they decided that it was not a proper instruction for age 
cases, it made no sense to decide under what standard you would 
give that instruction. So their really only choice was to 
either rule as they did or to say that writ was improvidently--
writ was improvidently granted and that would have then just 
delayed the inevitable.
    Also, the issue was raised in the respondent's brief when 
they asked that Price Waterhouse be overruled, if necessary. 
And with respect to the McDonnell Douglas test, although that 
is in the footnote, I don't think there is any question that 
the McDonnell Douglas standard remains the same. And, in fact, 
that is what I would say 99 percent of all cases including age 
cases are tried under.
    The mixed motive analysis is not used in the real world. 
And when it is used, it causes complexity and complication and 
ends up with situations like happened to Mr. Gross. If he had 
gone in with a straightforward instruction I have no doubt he 
would have won the trial, just as he did. But what would have 
been avoided were two appeals and now the possibility of having 
to retry it again.
    Chairman Leahy. We could differ on that. We'll get back to 
that later. But I want to go to--and I will--and I appreciate 
you stepping forward. But I will let you and Mr. Foreman speak 
to this again.
    Ms. Jones, the Fifth Circuit recently ruled that you 
actually could pursue some of your claims before a jury. Those 
are the claims related to sexual assault.
    I was a prosecutor and proud to be. The people involved in 
that I couldn't help but think I would be charging them with 
numerous kinds of assault. And I have to feel that if convicted 
our courts in Vermont would send them to prison for a long 
time. But your former employer KBR or Halliburton argued the 
brutal sexual assault was somehow related to your employment 
and therefore had to be handled in arbitration tends to defy 
common sense. That's the argument they took, you had to appeal 
to the Fifth Circuit. And now they are actually moving to 
rehear. What kind of a signal does this send to women in the 
workplace?
    Ms. Jones. Well, first of all, corporations do this by----
    Chairman Leahy. Is your----
    Ms. Jones. It is very apparent to me through working with 
the Foundation and working with other women and my past 
experience, that corporations can adopt arbitration as a way to 
wipe clean the record of all disputes that have arisen. And if 
women before me that had been sexually assaulted working 
overseas in Iraq or Afghanistan or anyplace that we were 
deployed, if they were able to go and sit in front of a trial 
by jury, that would have been public record. I would have known 
before going to Iraq what I was getting into and likely this 
would have never occurred.
    I feel like this sends a clear message that the 
corporations are able to have more power than the individual. 
And I don't think it's right. And I think that it's important 
for people to be aware of such practices that arbitration has 
cast upon the workers.
    Chairman Leahy. Considering the position that Halliburton 
has taken on this, is it safe to say you would much rather the 
decision of how you might be treated would be done by an 
impartial court and jury rather than an arbitration system they 
might have helped set up?
    Ms. Jones. Well, Halliburton would hire my arbitrator. And 
they are taking the position that a sexual assault is part of 
employment. Why would I ever want to walk into an arbitration 
knowing that they hired the arbitrator and knowing that that's 
how they feel about sexual assault? Do you think I'm going to 
win? And if I win, do you think I'll win much? Or do you think 
I will win just to be quiet?
    Chairman Leahy. We are agreeing with each other, Ms. Jones.
    Ms. Jones. Exactly.
    [Laughter.]
    Chairman Leahy. And if we weren't, I wouldn't be holding 
this hearing.
    [Laughter.]
    Chairman Leahy. And Mr. Gross, Senator Franken has had to 
go vote another Committee and I was going to ask you one more 
question and then I'm going to have to step out for a moment, 
myself and turn the gavel over to Senator Franken, but I'll be 
right back.
    Do you think it's fair to ask victims of discrimination to 
prove that age was the decisive factor for discrimination; 
especially when they often lack access to necessary records 
that employers possess that might help them prove their case?
    Mr. Gross. Senator Leahy, I don't think there is anything 
particularly complicated about the jury instruction. My fellow 
Iowans who served on the jury, I believe, understood the rule 
of law perfectly and came to the sound understanding, 
especially with the final thing they heard was that if you can 
find any reason other than age for their actions, you have to 
find in favor of Farm Bureau.
    Now, that's pretty clear. To me that just eliminates 
everything else. I had made the prima facie case. There was age 
discrimination, they could find no other reason after a week of 
testimony evidence. They boiled it down to this, there is one 
sole cause for what happened here. And as Justice Souter said 
during the hearings, a lot of times, juries are just smarter 
than judges. And I tend to believe that was the case.
    They knew that age was not only a motivating factor, they 
knew that--actually, I think if we had to go back and try this, 
and it's been 7 years already, 10 percent of my life is 
invested in this. I really don't want to start over. But if we 
had to start over, even under this new one, I'm confident that 
we would win. However, that does not mean that it was a good 
decision.
    I was terribly disillusioned about how they broke with 
their own protocol to come to their conclusion. As has already 
been mentioned, they almost ignored the issue that the CERT was 
granted on. They allowed new evidence--a new argument to be 
introduced right at the last minute. I don't think that--well, 
there's just a number of things that I think broke with 
protocol.
    As the claims guy, I taught a lot of adjusters over the 
years, and the first thing I taught them and the most important 
thing was to never do anything that could create any appearance 
of impropriety or self-conflict. And I expected no less than 
that from the highest court in the land. And I thought I saw a 
lot of things that just plain disillusioned me about how our 
Supreme Court system functioned in my case.
    Chairman Leahy. I am glad of the comment by my fellow New 
Englander, Justice Souter.
    But let's go back to the Midwest, Senator Franken.
    Senator Franken. Thank you, Mr. Chairman. Thank you, for 
calling this hearing. Thank you to all the witnesses.
    I am sorry I had to make a vote on another Committee so I 
missed Mr. Fox and Mr. Foreman.
    First, I just want to say something to Ms. Jones.
    Yesterday we had an amendment to the Department of Defense 
Appropriations and we passed the bill, quite handily, saying 
that we are not going to hire contractors who do mandatory,
    binding arbitration on things like sexual assault.
    Ms. Jones. Uh-huh.
    Senator Franken. We had a little press thing afterwards and 
I talked about your courage and your persistence. One thing I 
left out is your strength, and I want to thank you for that.
    Ms. Jones. Thanks.
    Senator Franken. You are an amazing young woman.
    Ms. Jones. Thank you.
    Senator Franken. Mr. de Bernardo said that you have had 
your day in court.
    Ms. Jones. He did say that.
    Senator Franken. Isn't it true that what you have been in 
court doing is trying to get your day in court?
    Ms. Jones. Exactly. I wanted to quote him, actually, 
justice denied is--wait, ``justice delayed is justice denied.''
    Senator Franken. He did say that in his testimony.
    Ms. Jones. I totally agree with that. I have been fighting 
arbitration for 4 years. I have been wanting my day in front of 
a trial by jury for 4 years. I don't believe that claims like 
this should ever be in front an arbitrator. They need to be 
public knowledge. They don't need to be private, discrete, and 
binding.
    So I feel that what Bernardo said was accurate about 
justice delayed is justice denied. But those of us that need 
this as public knowledge need to not go in front of a secret 
arbitrator.
    I was also curious if Bernardo represents individuals or 
corporations. And also if the polled employees represented 
likely include people who have gone through the process or have 
not gone through the process.
    Senator Franken. Well----
    Ms. Jones. So I was kind of curious about that.
    Senator Franken.--I'll ask the questions here, Ms. Jones.
    [Laughter.]
    Senator Franken. And I do have a question for Mr. Bernardo.
    [Laughter.]
    Senator Franken. You put in your written--
    Mr. de Bernardo. It's de Bernardo.
    Senator Franken. Oh, I'm sorry, Mr. de Bernardo. Excuse me.
    You said in your written testimony--you write in your 
written testimony you cite something which, by the way in the 
footnotes I can't--you cite essentially page 30 of a 10-page 
report. That employees have a 63 percent chance of prevailing 
in arbitration and a 43 percent chance of prevailing in 
employment litigation, forgetting the fact that the Committee 
couldn't actually look that up.
    Would you consider if Jamie Leigh had gotten a settlement 
of $50 that she would have prevailed under this definition?
    Mr. de Bernardo. Senator Franken----
    Senator Franken. Please answer yes or no, sir.
    Mr. de Bernardo. Not yes or no, let me just say----
    Senator Franken. Please answer yes or no, sir. Are you 
saying no?
    Mr. de Bernardo. I say no.
    Senator Franken. So, in other words, if the statistics on 
who prevailed and who didn't prevail, what would she have 
needed to have gotten? $100? Would she have prevailed if she 
had gotten $100?
    Mr. de Bernardo. You know, I think this is a distinction 
without a difference. What we are talking about----
    Senator Franken. Answer yes or no, please, sir.
    Mr. de Bernardo. The question is, what is the number that 
counts as prevailing?
    Senator Franken. I think that is sort of the question; 
isn't it?
    Mr. de Bernardo. You know, what I am looking at is the 
research that's been done, the studies that have been done on 
who prevails in----
    Senator Franken. Yeah. And I'm saying, what's prevailing?
    Mr. de Bernardo. I don't know what their definition is 
going to be.
    Senator Franken. So you don't know what their definition 
is. So when you said, ``no'' you didn't know whether that was 
true or not, did you?
    Mr. de Bernardo. Well----
    Senator Franken. Did you?
    Mr. de Bernardo.--Senator, if we are talking about an 
assault or a sexual assault or assault and battery or false 
imprisonment, that is not what I am here to address. What I am 
here to address----
    Senator Franken. That's what this case was about, sir.
    [Simultaneous conversation.]
    Senator Franken. And the company--sir, please.
    The company asserted that it had the right to arbitrate. In 
fact, she's been in court 4 years because this--and, by the 
way, they are appealing again.
    So you write something that you didn't know about, that 63 
percent of the time the employees prevail. So, presumably if 
they, as far as you know, if she had gotten $50, that would 
have counted under your 63 percent.
    And would she also have prevailed if she got $50 and that 
the price of that was her silence?
    Mr. de Bernardo. You know, Senator, I would like to 
respond, not in yes or no, but a little bit more broadly.
    Senator Franken. Go ahead.
    Mr. de Bernardo. And the answer is we go to the research 
that is out there. We go to the statistics that are available. 
They're reliable statistics from credible, neutral sources. As 
for prevailing, this is an awful set of facts that Ms. Jones 
alleges----
    Senator Franken. I just asked you a question, would that be 
considered onerous to say that she prevailed? Because that 
seems to be part of your case that this is better for 
employees. That's your case. So I am asking, what do those 
statistics mean? And you don't seem to know what they mean.
    Mr. de Bernardo. Well, I do know what they mean----
    Senator Franken. OK. For example----
    Mr. de Bernardo.--because the overwhelming majority of 
times, 99.9999 percent of the time the facts aren't going to be 
anything near what we are talking about here. It's not going 
to----
    Senator Franken. But here they are the facts here and she's 
been in court for 4 years, sir.
    Mr. de Bernardo. There's a criminal situation, there's a 
civil action that----
    Senator Franken. She had no criminal--this took place in 
Iraq. So at that time she had no recourse, sir.
    Mr. de Bernardo. All right.
    Senator Franken. She has not had her day in court, sir. She 
has litigated to have her day in court, sir, Mr. de Bernardo.
    Mr. de Bernardo. I would like to address that issue.
    I would like to address that issue in terms----
    Senator Franken. No. No, please answer my question, sir.
    Mr. de Bernardo. OK.
    Senator Franken. I read some of your testimony to Ms. 
Jones. You said, ``the net result of the use of arbitration is 
better work places.''
    Mr. de Bernardo. Correct.
    Senator Franken. Better work places.
    Mr. de Bernardo. Correct.
    Senator Franken. She was housed with 400 men. She told KBR 
twice that she was being sexually harassed. She was drugged by 
men that the KBR employment people knew did this kind of thing. 
She was raped, gang raped. She had to have reconstructive 
surgery, sir.
    They had this arbitration. Now, if that created a better 
work place. And then she was locked in a shipping container 
with an armed guard.
    Now, my question to you is, if that's a better work place, 
what was the work place like before? That's a rhetorical 
question. I am not really asking that question.
    They had binding arbitration at KBR. And because of that, 
and they asserted it on cases like this.
    Ms. Jones, in your foundation, you have heard from other 
women who were raped; is that not true?
    Ms. Jones. Yes, sir, I have.
    Senator Franken. And women who under arbitration----
    Ms. Jones. Yes, sir.
    Senator Franken.--were told to keep silent; is that right?
    Ms. Jones. Exactly.
    Senator Franken. And because of that silence you didn't 
know about anything like this, did you?
    Ms. Jones. Exactly. I didn't know. It was not public 
knowledge, unfortunately. I think it was a very big injustice 
for it not to be public knowledge. It was an injustice for me 
and all future mothers, wives, daughters, sisters, who want to 
go to Iraq that don't know about all of the crimes that have 
occurred overseas. Because it's been in secret arbitration, 
it's a big injustice.
    Senator Franken. And when Mr. de Bernardo said that you had 
your day in court, what was your reaction?
    Ms. Jones. I was livid, sir. Four years to fight to get in 
court is not a day in court.
    Senator Franken. I was livid too.
    This is the result of your binding, mandatory arbitration, 
Mr. de Bernardo.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Mr. de Bernardo, you wanted to say more and I don't want to 
cut you off. Obviously I'll give you a chance to do that. But 
let me ask you this question.
    Mr. de Bernardo. I do want to say more when we have a 
chance.
    Chairman Leahy. I'll give you that. But when you do it 
could you also answer this. If arbitration is cheaper for both 
sides, it's fair for both sides, it's easier for both sides, 
then why not have voluntary arbitration?
    Mr. de Bernardo. OK. Should I make my comment or respond to 
that first?
    Chairman Leahy. Do both. Whatever you----
    Mr. de Bernardo. I guess I'll start with your question, Mr. 
Chairman, which is, this is the issue of pre-dispute versus 
post-dispute. And there is the option of doing post-dispute 
now, but it is not used. Because as a practical matter, once 
you've gone through the process by which an individual 
approaches a plaintiff's lawyer, secures a plaintiff's lawyer, 
and they accept less than 5 percent of the people who go in who 
wish for representation, they're convinced--that plaintiff's 
lawyer is convinced that this case has a significant enough 
chance of receiving either a settlement or damages that would 
entice them to carry it forward and work on this case. We all 
have limited time and resources, I understand that.
    A complaint has been filed and either the lawsuit or the 
charge has been filed. And, in effect, the individual has 
reconciled to this point that they're--mentally that they're 
going to do battle with their employer. You know, it's too late 
at that point post-dispute arbitration as a practical matter 
doesn't occur. It's very, very rare in the United States now 
when there is the option for that.
    Chairman Leahy. But, it would be----
    Mr. de Bernardo. Of course it would be rare later----
    Chairman Leahy. If there's no option it's a moot point. 
That's my question. I mean, why not give the alternative? 
You've testified, if I understand your testimony correctly, in 
favor of these arbitrary arbitration clauses----
    Mr. de Bernardo. Correct.
    Chairman Leahy.--like the one that Ms. Jones faced. And I 
would be one of the first to agree that there are many, many 
times arbitration makes a great deal of sense.
    In private practice, I was involved at different times in 
arbitration and it made a lot of sense. But, shouldn't that be 
something where each of the parties has that option? Not that 
requirement, but that option?
    Mr. de Bernardo. Well, if it is a post-dispute vis-a-vis 
pre-dispute, it hasn't been used and it's not going to be used. 
So, you know, should it be an option? As a practical matter it 
wouldn't be an option that would be in use. That's the bottom 
line. That's why I say that this legislation, the Arbitration 
Fairness Act, if it were enacted, would end arbitration 
employment in the United States. Effectively it would abolish 
it because the overwhelming majority of arbitrations which 
occur are based on pre-dispute agreements.
    Chairman Leahy. Now, you wanted to say something further 
to----
    Mr. de Bernardo. Well, yeah, you know----
    Chairman Leahy.--Senator Franken----
    Mr. de Bernardo.--we're not a court of law. We are not here 
to--I am not familiar with many, most, the entire record in 
terms of the situation involving Ms. Jones. I have said how I 
thought that this is a terrible situation with terrible facts.
    What I do want to say is, if we're talking about justice in 
the United States and who has access to justice, arbitration 
provides a means by which employees, most specifically 
employees, have tremendous access that they otherwise would not 
have. If S. 931 were enacted, those 95 percent plus of 
employees who now have their issues addressed and resolved 
would not have that option. Because, you know, the first 
threshold that I talk about is the fact that the plaintiffs' 
bar is only going to accept less than 5 percent of the cases 
that are brought to them.
    The second thing is, the motions practice, there was some 
reference to that earlier, and as cited in the testimony a 
study by the National Work Rights Institute, 3,400 cases, 60 
percent of those were decided by pre-trial motions, motions for 
summary judgment, motions for dismissal. And in 98 percent of 
the time the employers prevailed. So you can't get that 
threshold to get to court. If you get to court it's likely you 
are going to have it dismissed. Even if it goes to--you know, 
1.3 percent of the cases in the Federal court system go to 
trial. The vast majority of those are not jury trials. So, you 
know, this idea that everybody has their day----
    Chairman Leahy. Of course, a great number of them are 
settled too.
    Mr. de Bernardo. What's that?
    Chairman Leahy. A great number of them are settled.
    Mr. de Bernardo. Correct.
    Chairman Leahy. OK.
    Senator Franken.
    Senator Franken. I just want to----
    Chairman Leahy. We can be a little more flexible on the 
time because there is only the two of us here because there are 
so many other committees meeting.
    Senator Franken. So does this 5 percent include the ones 
that have been settled or not?
    Here's my--I guess then I have a bigger--larger question.
    Mr. de Bernardo. OK.
    Senator Franken. In the statistics you cite in your written 
testimony and in your present testimony, are these things that 
you are actually familiar with?
    Mr. de Bernardo. Yes, I would say----
    Senator Franken. Well, you weren't familiar with the other 
statistic and what 67 percent prevailing meant.
    Mr. de Bernardo. Sixty-three percent.
    Senator Franken. Now, I'm asking you another question and 
you seem stymied.
    Does the 5 percent include those that have been settled?
    Mr. de Bernardo. You know, I have many, many statistics 
that are cited in many footnotes. And I will say, if that's 
from the National Work Rights Institute instant survey, many of 
these statistics are from the National Work Rights Institute. 
That is headed up by the former head of----
    Senator Franken. I just want to know what the statistic----
    [Simultaneous conversation.]
    Mr. de Bernardo.--the employee rights----
    Senator Franken.--means.
    [Simultaneous conversation.]
    Senator Franken. I want to know if----
    Mr. de Bernardo.--reliable statistic, Senator, yes, I do.
    Senator Franken. That's not what I asked. I didn't ask if 
it was a reliable statistic. Reliable about what? That's what 
I'm asking, what is it reliable about? You're talking about--
you're saying that employees don't have access to hearing their 
case because only 5 percent get heard. And I'm asking what that 
means? What that 5 percent means and you don't seem to know.
    Mr. de Bernardo. No, what it means is that plaintiffs' 
attorneys are not going to take every case that comes into 
their offices----
    Senator Franken. I want to know what the 5 percent 
statistic means, sir. If you don't know, just say you don't 
know. Could you do that, at least?
    Mr. de Bernardo. Well, I do know. There's a survey that 
says that less than 5 percent of the time plaintiffs' attorneys 
are going to accept the cases that come to them. The 
plaintiffs' bar, the plaintiffs' attorneys that I deal with 
would readily admit that. There are many, many cases that come 
in and they're going to say no unless they're convinced that--
--
    Senator Franken. What if you went to 20 attorneys, would 
that mean 100 percent of the cases are taken?
    Mr. de Bernardo. You know----
    Senator Franken. Let me--let me----
    Mr. de Bernardo.--100 percent of the grievances--Senator, 
if I could respond? One hundred percent of the grievances that 
are filed in arbitration programs and dispute resolution 
programs are addressed.
    Senator Franken. Yeah, and you told me that----
    Mr. de Bernardo. Less than 5 percent of litigation----
    [Simultaneous conversation.]
    Senator Franken.--that you don't know if $50 to Ms. Jones 
would be considered in your statistic of whether that would be 
her prevailing. So you don't really know too much about your 
statistics.
    Mr. de Bernardo. There are two studies----
    Senator Franken. Here's another statistic, sir, from the 
National Work Rights Institute.
    Mr. de Bernardo. Senator, could I respond?
    Senator Franken. No, give me a second here.
    Mr. de Bernardo. OK.
    Senator Franken. Found that the mean damages awarded by 
arbitrations was 49,000, the mean damages awarded by district 
courts is $530,000. That seems to be more beneficial to the 
employee; doesn't it?
    Mr. de Bernardo. Sure. Those numbers would be more 
beneficial to the employee.
    Senator Franken. Thank you, sir.
    Chairman Leahy. Thank you.
    Senator Franken. Thank you, Mr. Chairman.
    Mr. de Bernardo. I would respond, if I can?
    Chairman Leahy. Go ahead.
    Mr. de Bernardo. That there are two surveys that I am 
familiar with. I am not familiar with that survey. The two 
surveys that are detailed and discussed and cited in my 
testimony both found that the median or the mean or the average 
awards given in arbitration in fact either exceed or are just 
slightly less than what happens in litigation.
    And, in fact, in the vast majority of times, if you are 
talking about arbitration, you also don't have the 33 to 40 
percent that has to go to the plaintiffs' attorney plus 
expenses as well. So in fact the net----
    Chairman Leahy. Mr. de Bernardo----
    Mr. de Bernardo.--I'm talking about for the average 
employee.
    Chairman Leahy. Those studies----
    Mr. de Bernardo. The average situation, the average 
employee, they are more likely to get their issue addressed. 
They are more likely to prevail and they are more likely to 
receive a larger return if they go to arbitration than if they 
go to litigation.
    Chairman Leahy. And those statistics are in your testimony?
    Mr. de Bernardo. They are, Senator.
    Chairman Leahy. Thank you. So they will be before the 
Committee. Appreciate that.
    Mr. de Bernardo. Thank you, Senator.
    Chairman Leahy. Professor Foreman, Circuit City and Gross, 
do these make it more difficult for victims of employment 
discrimination to seek relief in the court and does it--and if 
you do get into court, does it put further obstacles in your 
path in going before a jury?
    Mr. Foreman. I mean, without a doubt. And I think there is 
a consensus opinion that Gross makes it harder for people to 
prove age discrimination. The courts have all said that, the 
media have said that, the academic literature said that. There 
is no debate. It is harder if you are a victim of age 
discrimination after Gross to prove your burden.
    And on the binding arbitration, Circuit City opened the 
doors for arbitration of employment discrimination claims and 
what happened is employers en mass adopted these. Almost 30 
percent of employers now have some type of pre-dispute binding 
arbitration. And I really want the Committee to focus on what 
we heard from the employment community today. And what this 
Committee was told was, well, you couldn't give the employee a 
choice because they would choose not to go into binding 
arbitration. When arbitration works is when we put it in 
employee applications and handbooks where they don't really see 
it, they don't have any ability to react.
    But the comment was made once they know their rights, once 
they get an attorney, then maybe they will choose not to go 
into binding arbitration because they know there is not as much 
discovery, they don't have as many appeal rights, and sort of 
combining the two issues there's limited discovery in 
arbitration.
    Under the Gross decision the plaintiff has the burden of 
proof and they have the burden of proving by some courts that 
age was the sole motive. Well, with limited discovery and a 
higher burden, how does a plaintiff ever win in these claim 
cases?
    And a bit on the statistics and Senator Franken, I think 
you covered the prevailing party issue. I am not going to touch 
on that at all.
    Senator Franken. Please.
    [Laughter.]
    Mr. Foreman. But the statistics that the employment 
community relies on are those bargained-for exchanges. They are 
not pre-dispute binding arbitration by blue-collar workers. If 
you want statistics that have done that analysis, they're cited 
in footnote 50 of my materials. They are not my statistics, 
they are not a think tank's statistics, they are an analysis 
and it comes out two ways.
    One, plaintiffs win less in arbitrations, and they win less 
money in arbitrations across the board. And I think that's what 
this Senate needs to deal with is how do you do this balance to 
allow employees to have a free choice. After a dispute has 
arisen is a different category than in pre-dispute binding 
arbitration where there is no agreement.
    And I think, Senator Franken, you raise a very good point 
in the bill that you've introduced. Is it a time to revisit 
Circuit City and determine whether when Congresses passes these 
very meaningful statutes, freedom from discrimination based on 
race and sex, they should be subject to binding arbitration at 
all.
    Chairman Leahy. Well, I'm going to have to be leaving, but 
Senator Specter is here. I am going over to him to ask 
questions. So that nobody will feel that they have been in any 
way cutoff, any one of you, I will keep the record open for 1 
week for you to add to any statement you have made or wish to 
add to this so the record will be complete. I have found this 
to be a very good and very worthwhile hearing.
    Senator Specter, I will yield to you.
    Senator Specter. Thank you, Mr. Chairman. I came to meet 
with you and I will stay around for that. I am going to ask 
just one question. I came in late, but I have been very deeply 
involved in this issue as it's been percolating for a long 
time.
    As you professionals know, there has been a lot of talk 
about the arbitration provision in the Employee Free Choice 
Act. And my question is for you, Mr. de Bernardo. I heard your 
last response to Senator Franken's question. The business 
interests have been very much opposed to any kind of 
arbitration in the Employee Free Choice Act even last best 
offer, which very sharply restricts the arbitrator's choice. Of 
the arguments which you have made, I heard the tail end, of the 
advantages of arbitration and how much you are pushing it, 
obviously in the context as an alternative to litigation. But 
in the context of all of the virtues you extol as to 
arbitration, doesn't that pretty much cut out the efficacy or 
weight of business' opposition to arbitration in the context in 
the Employee Free Choice Act proposals?
    Mr. de Bernardo. Senator, I think we are talking about 
apples and oranges. I would say no as my response.
    One is arbitration----
    Senator Specter. I am not surprised at your response. Now 
tell me why?
    Mr. de Bernardo. One is arbitration in lieu of litigation 
the other is arbitration in lieu of collective bargaining. They 
are totally different situations.
    What is analogous in a union sector to what happens in the 
non-union sector in terms of employment arbitration is the 
arbitrations that occur when there is a collective bargaining 
agreement for employee disputes which are common, and is 
sacrosanct to the labor movement. When the labor movement, has 
tried to--when they've tried to export unionization to Mexico, 
Central America, and South America, they call for arbitration 
of employment disputes. So in an organized labor setting, 
arbitration of employment disputes is in fact as entrenched as 
it is in our jurisprudence system in the non-union sector.
    In EFCA, the Employee Free Choice Act, what we are talking 
about there is arbitration in lieu of collective bargaining, a 
totally different situation whereby you would have very, very 
little incentive or no incentive for the union representative 
to reach agreement with the employer because they would rather 
go to an arbitrator on a very expedited, quicky basis and have 
a third party make a decision in terms of what the terms and 
conditions of employment are long term including wages, 
benefits, and a whole host of other terms and conditions of 
employment. They are really not analogous situations.
    Senator Specter. Just a concluding comment, I am aware of 
that distinction. I am aware of that argument.
    Mr. de Bernardo. I am sure you are, Senator. Appreciate 
that.
    Senator Specter. The consequence of collective bargaining 
has been unsuccessful about half of the cases where there is no 
first contract and a year passes and then a move is made for 
decertification and sometimes better resourced employers are 
able to outweigh the union. So what the Congress has to decide 
is whether you need a little push on collective bargaining. And 
if there is arbitration even limited to the last best offer, 
which restricts the arbitrator's discretion, that isn't an 
appropriate conclusion to implement collective bargaining with 
the thought that if there is that end product that people will 
be a lot more anxious to come to agreements without even having 
the limited last best offer.
    But these are weighty issues and I compliment the Chairman 
and the Committee for taking it up and we will be spending a 
lot of attention.
    Mr. de Bernardo. Sir, if I could respond just briefly, I 
would say that EFCA doesn't represent a little push, it's a 
huge push, it's a knock-down, drag-out push. So, you know, if 
there are problems that need to be addressed that is an over 
response, frankly, analogous to what I think is with S. 931, 
which is an over response to--you know, are there reforms that 
are necessary? Certainly that's a possibility. Are there 
reforms that I would support? Yes, there are. But it is not to 
completely abolish arbitration in employment in America today.
    Senator Specter. I will use the prerogative of the chair to 
have the last word. You say there are possibly reforms. I look 
at Mr. Gross and Ms. Jones I'd say that's a good possibility. 
Thank you. We stand in recess.
    [Whereupon, at 11:38 a.m., the Committee was adjourned.]
    [Questions and answers and submissions for the record 
follow.]
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