Many employers demand their employees sign arbitration agreements. Among other things, this means that if the employee is unlawfully terminated and then seeks to bring a claim for employment discrimination, the case must be heard by a private arbitrator rather than a judge. Employers favor arbitration because it is usually quicker than traditional litigation, and more importantly, because federal law makes it extremely difficult to appeal an arbitrator's final decision.
NYC Ad Agency Objects to $40 Million Arbitration Award
Of course, when an arbitrator does rule in favor of the employee, the same employer who insisted on arbitration in the first place may suddenly complain that the whole process is unfair. Consider this recent story involving a New York City-based advertising agency and one of its former managers. The plaintiff in this case, a gay woman, alleged that she was the victim of gender discrimination. More specifically, she was demoted because she acted in a manner similar to male managers, and was effectively forced to leave the company.
The plaintiff was subject to an employment agreement that required arbitration of disputes under New York law, even though the plaintiff worked primarily in the Midwest. At one point, according to Adweek, the plaintiff “was the agency’s highest paid employee and managed approximately 30 employees.” But the defendant claimed it received complaints about her “unprofessional behavior” and “inconsistent approach to management,” which ultimately led to her demotion and termination.
After hearing evidence from both sides, the arbitrator found the defendant was simply “manufacturing reasons” to justify firing the plaintiff. Indeed, the arbitrator said the evidence showed the defendant “labored under a double standard, treating [the plaintiff] differently from its male managers, who were never written up, reprimanded, or disciplined in any way for similar or worse behaviors it used to discredit her.” In short, the arbitrator said the defendant's “executive team is a boy's club” and that “a woman is not permitted to act like a man.”
Based on the defendant's illegal discrimination under New York law, the arbitrator issued a final award to the plaintiff of more than $40 million. The majority of the award–approximately $27.5 million–was “liquidated damages” for the plaintiff's unpaid commissions and unvested stock options, which the arbitrator tripled pursuant to New York State law. The remainder of the award included damages for back pay, retaliation, emotional distress, as well as $300,000 in punitive damages due to the “significant evidence of unlawful complicity motivated by malice” on the part of the defendant's senior executives.
The defendant has since asked a federal judge in Manhattan to vacate the arbitration award, alleging the proceeding was “fundamentally unfair” and that the arbitrator “manifestly disregarded settled New York and federal law.” In a statement to the press, the plaintiff's attorneys said the defendant's motion was “shameful” and that the company had “doubled down on its double standards.”
Have You Been a Victim of Illegal Job Discrimination?
If you have been the victim of a double standard in your workplace–whether based on sex, gender orientation, or race–you may have the right to take legal action. A qualified New York employment law attorney can advise you of your rights under New York and federal anti-discrimination laws. Contact the Law Offices of Mahir S. Nisar today if you need to speak with an attorney right away.