The Times writes:
“Over the last 10 years, thousands of businesses across the country — from big corporations to storefront shops — have used arbitration to create an alternate system of justice. There, rules tend to favor businesses, and judges and juries have been replaced by arbitrators who commonly consider the companies their clients, The Times found.”
Wall Street On Parade decided to take a look at who is currently on the Board of Directors of the American Arbitration Association. According to Bloomberg Business, the AAA Board includes lawyers from some of the most prominent go-to law firms for Wall Street and corporate America: Michael Mukasey of Debevoise & Plimpton LLP; Daniel Price of Sidley Austin; Guillermo Aguilar-Alvarez of King and Spalding; Albert Bates Jr. of Duane Morris LLP; and John Fellas of Hughes Hubbard & Reed LLP, among others.
The major problem with The Times investigation is that it makes only a few fleeting references to Wall Street – the longest purveyor of a private justice system dating back decades and the only industry in America that shuttles allclaims by both customers and employees into mandatory arbitration hearings. (Under the Dodd-Frank financial reform legislation passed in 2010, whistleblower claims are now exempted from mandatory arbitration agreements.)
The Times has been on notice of the systemic abuses in the securities industry’s mandatory arbitration hearings since at least June 9, 1994 when Margaret Jacobs, writing for the Wall Street Journal, penned an in-depth seminal piece on the kangaroo courts routinely masquerading as justice on Wall Street. Jacobs wrote:
“Helen L. Walters says her boss called her a ‘hooker,’ a ‘bitch’ and a ‘streetwalker.’ Sometimes he brandished a riding crop in front of her and once he left condoms on her desk.
“Ms. Walters, then a trading-room secretary at a California brokerage firm, filed a complaint against him alleging sexual harassment. In a formal hearing, he readily admitted to the whip and the condoms, and to using all of those epithets. Her case, legal scholars agree, seems a textbook example of illegal harassment as defined by the Supreme Court: a situation in which a ‘reasonable person’ would find the work environment ‘hostile or abusive.’ ”
Walters lost her case because arbitrators in security industry proceedings are not required to follow legal precedent or case law, or write reasoned decisions. It is almost impossible to succeed in a court appeal of a mandatory arbitration decision – no matter how egregious the ruling is.