| Sanctity of Contract
There's a reasonable argument to be made about the commercial need for situation-specific, agreed upon rules that transacting parties are held accountable for sticking to. Contracts hold an important place in the law for that reason.
Yet contracts have gone beyond that function, becoming a set of privately written laws fully binding only on the weaker of the two parties. If you can afford a good contract lawyer, you have a legislature for hire at will.
Let me repeat that another way: Powerful people who can afford it can get a whole class of law made that sharply advantages them and is honored by the courts every bit as much as laws made by elected representatives.
This does not apply the same way to all contract participants, however, with some being more equal than others.
Consider the pension contracts that so many unions negotiated in return for taking cuts in short-term pay or benefits, which companies can unilaterally void after the fact with no repercussions. There are the credit card companies that contract with consumers to charge one interest rate, but then raise the price of the loan sky high after you've already borrowed against it.
(And hey, how's that worked out for the credit card companies?)
Though the banking industry, like the rest of our large corporations, expects to get its own way in legal matters, mostly because years of experience with legislators and the courts have taught them they can have it. And their investor-class employees expect their f*ing bonuses, thank you, even if those bonuses far exceed their value to their employers. Indeed, flailing Wall Street businesses seemed almost unanimous on the sanctity of contractual obligations towards those investment banking executives and high-powered brokers. They have no such scruples towards rank-and-file bank employees.
It's not the sanctity of contracts they believe in, it's the sanctity of vast profits for the very few and the extreme inequality it engenders.
Binding Mandatory Arbitration
I've written before about the way ordinary people can get ground down under mandatory arbitration agreements. They're in 75 percent of consumer contracts, and many hiring contracts, but the American business establishment rejects using them in labor disputes, as the SEIU's Kate Thomas writes:
The "first contract arbitration" portion of the Employee Free Choice Act seeks to stop employers from using endless foot-dragging against workers who have voted for a union, but have yet to secure a contract. The legislation says that if employers and workers can't reach an agreement in a reasonable amount of time--120 days--either side can bring in a neutral, private-sector arbitrator to settle the dispute. ...
Arbitration is a process whereby you pick your own, private judge and stick with what you get. Corporations dealing with each other on an equal footing over continuous transactions, who might otherwise end up in regular court on an equally continuous basis, find this a useful way to reduce their costs and usually even out their losses over time.
Extreme deference is paid by the regular courts to arbitration decisions unless, and this is nearly impossible, corruption can be proved.
For businesses on a roughly equal footing dealing with arbitrators on a regular basis, this still works out fairly well. For consumers who may, maybe, deal with the arbitration system once in their lives and don't get to pick the judge, it's a different story.
A private arbitration firm is in a sense an employee of the disputants. Arbitrators who find against repeat corporate customers in favor of consumers may lose their jobs or even be blackballed in the industry - their corporate clients might not otherwise return, they might pick different judges.
This is different from the dynamics at play when corporations mutually agree to arbitration, where the arbitrators are the nominal employees of both firms.
If unions could call in arbitrators of their choice, that would start putting them on equal footing with the privileges corporate executives have had a lock on up until now. You can see how this would be a disaster for the investor class always getting its own way.
It's not about the objective merits of arbitration, it's about the merits of preserving vast profits for the very few and the extreme inequality it engenders.
Business Class Citizenship
The fight over the Employee Free Choice Act is about preserving a right to vast profits for the very few that's enshrined nowhere in the Constitution.
It's about selectively warping capitalism. It's about a public relations war over the concept of fairness. It's about concentrating market power into ever fewer hands with every round of the game.
They want all the stuff and they don't want to share.
They want all the legal privileges and they don't want to share. Which is why America's corporate interests, backed by the leadership of the Chamber of Commerce, don't want arbitration in the Employee Free Choice Act. |
