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Former WeWork employee asks Governor to ban startups from denying employees right to sue

By Paul Bradley Carr , written on September 16, 2016

From The From the Trenches Desk

Back in March of this year, former WeWork employee Tara Zoumer filed suit against her former bosses for wrongful termination after she was fired for refusing to sign a restrictive new employment contract.

The contract denies WeWork-ers the right to sue the company for any ill-treatment suffered at work, and instead forces them into arbitration. According to Zoumer, most of her colleagues signed the new contract under duress. Those who signed, she says, fell into one of three categories:

Those who didn’t know the implications of what they were signing, those who felt they had no choice, and those who financially couldn’t afford to make any other decision.

Shortly after Zoumer filed her suit, WeWork filed a Petition to Compel Arbitration in New York. That petition was granted by a New York Judge, forcing Zoumer into the exact arbitration process she had been fired over. 

As Zoumer puts it:

Although I avoided being forced into a new abusive agreement, forbidding class actions, the single overlooked sentence put me in the same (if not worse) position: arguing my case before a private arbitrator in a far away private forum, by myself.

My experience taught me a sobering lesson about our democracy. We have forgotten a fundamental purpose of government: To protect the rights of the people.

That quote is taken from a blistering letter sent by Zoumer to California Governor Jerry Brown, urging Brown to sign State Bill 1241, which would bar companies like WeWork from forcing employees into arbitration. The deadline for the Governor to sign the bill is Spetember 30th.

According to the California Peculiarities Employment Law Blog:

SB 1241 would allow an employee to void a contract provision that requires the employee to adjudicate a claim outside of California, or require the employee to waive their protections under California law. Specifically, this bill prohibits an employer from requiring an employee, who resides and works in California, as a condition of employment, to agree to a provision that would either require the employee to adjudicate outside of California a claim arising in California or deprive the employee of the protection of California law with respect to a controversy arising in California.

Writes Zoumer:

SB1241 will prohibit corporations from cherry picking venues for their own corporate convenience and transferring employment cases to states with unfriendly laws. This bill, while not preventing my termination, would at least prevent companies from forcing take it or leave it forum selection clauses on employees.

 The full letter is embedded below.

Dear Governor Brown:

I never knew companies had the power to strip citizens of their rights until I experienced it.

In March 2015, I was hired by WeWork , an office leasing startup with a $17billion valuation on Wall Street. I was paid a salary of $42,000. Though the job title was vague, I was excited to have a job and be part of a growing startup. Unbeknownst to me, buried at the end of my offer letter was a single sentence binding me to mandatory arbitration in New York if I had any dispute with the company. At the time, I didn’t realize the significance of this clause and no one pointed it out to me.

It was apparent early on that we were expected to “play hard, hustle harder.” I soon noticed that most of us were spending the majority of our time on menial tasks like retrieving mail and changing beer kegs, which were kept on each floor as a perk to the youthful clientele.

We worked long hours and were under tremendous stress. When I reported concerns to managers, I was met with a common excuse: “We are a startup, be patient.” I did some research and learned that the duties we were performing were not standard “exempt” duties and we may be owed overtime. I then began trying to organize with my coworkers to improve our working conditions and pay.

When my manager discovered this, she told me to stop talking to other employees about their rights. “Their path is their path,” I was told. My discussions about wages were “negative” to the workplace and I was asked if I wanted to resign because “I might not fit the culture of WeWork.”

I stuck in there, but a few weeks later managers surprised all employees with new contracts. A conference room was set up with managers, a mountain of papers, one empty chair, and a pen.

Workers were called in one at a time to sign on the spot. Employees fell into several categories:

Those who didn’t know the implications of what they were signing, those who felt they had no choice, and those who financially couldn’t afford to make any other decision.

As I feared, the new documents included an arbitration agreement that waived our rights to a trial by jury, and a waiver of any class or collective action. I refused to sign and was fired.

I filed a wage and hour and wrongful termination claim in California. WeWork filed a Petition to Compel Arbitration in New York shortly thereafter, which was granted by a New York Judge.

Although I avoided being forced into a new abusive agreement, forbidding class actions, the single overlooked sentence put me in the same (if not worse) position: arguing my case before a private arbitrator in a far away private forum, by myself.

My experience taught me a sobering lesson about our democracy. We have forgotten a fundamental purpose of government: To protect the rights of the people. With increasing frequency, corporations are usurping government control of our courts and the legal system through the use of “forced arbitration,” leaving citizens across the nation virtually powerless to protect themselves.

Even worse, agreements like my original offer letter force low wage workers like me across the country to try to enforce their rights. I am not a sports celebrity or highly compensated executive.

I don’t have agents or attorneys to look over employment contracts and negotiate its terms. I am given a stack of papers that I can either sign or walk away from. Those are my choices.

Generally, arbitration as it currently stands is an unregulated, unmonitored, and private for profit alternative to courtroom proceedings. The 1925 Federal Arbitration Act was originally intended as a means to resolve disputes privately, leveling the playing field between businesses. It was never intended to be forced upon citizens in employment contracts or to allow companies to circumvent accountability in our judicial system.

Cases in arbitration are settled behind closed doors, with no public disclosure, no right of appeal, and none of the strict procedural rules that courts follow. The inherent risk of unfair and unethical proceedings is blatant. At a recent HR conference in Long Beach, labor attorney Greg

Labate told a session , “I use the same arbitrators over and over, and they get paid when I pick them. They know where their bread and butter comes from.” The New York Times analysis on arbitration found that companies were able to thwart class actions and push cases into private arbitration four out of five times.

The argument frequently made is that arbitration is cheaper and a more cost effective “alternative” to the judicial system. While a fair and just arbitration proceeding is entirely possible, the cases of abuse are being unmonitored and unheard. We would never let a private security company solve a serious crime instead of police, yet we are permitting a private justice system at the exclusion of our courts.

The stakes for our democracy become particularly great when a dispute involves racism, gender, age or parental discrimination, sexual harassment or violence. As it stands, arbitration is like being taken to the back shed instead of having your case heard by a judge and jury where you live.

It is my humble hope that with SB 1241 we will begin to regain some of the basic rights we have lost. SB1241 will prohibit corporations from cherry picking venues for their own corporate convenience and transferring employment cases to states with unfriendly laws. This bill, while not preventing my termination, would at least prevent companies from forcing take it or leave it forum selection clauses on employees.

The public’s right to collective action is the foundation on which this nation was formed. It is up to our government to protect that right. Without it, we the people are fighting with bows and arrows against corporations armed with howitzers.

There are inequities in our country that should not be permitted through the justification of capital gain. Abraham Lincoln knew this and so I will let him remind us all: “Capital is only the fruit of labor, and could never have existed, if labor had not existed first. Labor is the superior of capital and deserves much the higher consideration.”

Governor Brown, we the citizens who labor, deserve your higher consideration. I urge you to sign SB 1241.

Respectfully submitted,

Tara Zoumer