Glenda Perez: ‘No one should have to go through what I went through’ with discriminatory forced arbitration
By Paul Bland and Karen Ocamb
Glenda Perez was calm, intent on conveying every syllable of her story to the November 4 House Education and Labor subcommittee hearing “Closing the Courthouse Doors: The Injustice of Forced Arbitration Agreements.” A survivor of the secretive, commonly incomprehensible clause in employee contracts known as forced arbitration, Perez testified in support of the Restoring Justice for Workers Act (H.R. 4841) so that no other worker would have to face the same discrimination, retaliation and humiliation and no other family would have their lives ruined to mollify Big Business.
From October 2013 to July of 2017, Perez worked for global healthcare and insurance giant Cigna,. She quickly became a Subject Matter Expert, training new hires, winning the “Cigna Champion” award two years in a row, and was lauded on the company’s Twitter page for her volunteer work. But everything changed in April of 2017 when Perez was singled out by her manager as “a risk to the team,” blaming her for errors related to pharmacy benefits; she was inexplicably put on a performance corrective action plan.
“When I asked to see evidence of the errors, my manager refused and insisted that I just accept responsibility and take ownership of the problem,” Perez testified.
She asked her husband, who also worked at Cigna as a Root Cause Analyst, to pull up the report with the alleged errors. “My husband found reports of other individuals, specifically white women, one of whom was a Subject Matter Expert as well, who were making those same errors I was accused of making. They were not partaking in the new work process that I was made to do,” she said.
Perez filed an internal complaint with Human Resources the next month, charging her manager with discrimination. The next day HR informed her that they had completed their investigation — which usually takes 60 days — and exonerated the manager. She was then subjected to a far more onerous plan “that was belittling, demoralizing and embarrassing,” she testified. Two months later, she was fired.
But this was only the beginning of Perez’s four-year journey through corporate hell.
“When I wanted to file a complaint for racial discrimination and retaliation, Human Resources told me my complaint would have to be handled by their ‘arbitration process.’ I didn’t really understand what ‘arbitration’ meant, and in my mind, I thought it was simply another department in Human Resources that manages this level of complaint. Apparently, I had e-signed an arbitration document that was in the onboarding employee packet, a month prior to my first day at Cigna. After reviewing Cigna’s forced arbitration policy, I quickly learned that it wasn’t an informal internal process, but instead a complicated, formal and binding process that was nothing like going to court,” Perez testified.
No attorneys would represent her.
“I don’t have any legal background whatsoever and it took a lot of time for me to understand the process. We couldn’t afford internet at home, so we would use the Wi-Fi of a local dentist in the parking lot, and we drove to a law library, which was far away and the gas to get there was expensive, to do research to try and understand the process. This was all while I was caring for my three children and looking for a new job. It was completely overwhelming,” Perez said.
She filed a complaint in forced arbitration for claims of racial discrimination and retaliation under Title VII of the Civil Rights Act of 1964, the Florida Civil Rights Act of 1992, and 42 U.S.C.A. § 1981. “We went through a lengthy discovery process in which I was trying to get information from Cigna to prove my case,” Perez testified. “At one point Cigna’s attorneys said my discovery request would cost over $1 million — even though I was only requesting my employee personal profile. And from my research, I found that requesting your personal profile was a common request, but I was denied it by the arbitrator.”
After more back and forth, the arbitrator ruled in Cigna’s favor and canceled the hearing. “I was never even given a chance to participate in a hearing,” Perez testified. “I was devastated, I couldn’t understand what had happened. The arbitrator’s ruling didn’t make sense to me. He kept ensuring me that I would have my hearing, but that never happened. I never had a chance to tell my side of the story.”
That night Perez’s husband found a photo on the Internet of the arbitrator and Cigna’s counsel celebrating the arbitrator’s 50th birthday. More research revealed a personal and professional relationship. But after Perez filed a motion to vacate the award over the arbitrator’s “evident partiality” in the U.S. District Court for the Middle District of Florida and her husband hired a process server to deliver the motion, Cigna fired him, too. Two years later, the court dismissed the motion. She appealed to the Eleventh Circuit Court of Appeals, which ruled in Cigna’s favor a year later.
Perez had “no real opportunity to have my voice heard — and it left me broken,” she testified. “I once had faith in the judicial system and a person’s ability to hold a corporation accountable when they violated the law. Now I know that we, as individuals, are being stripped of our access to the judicial system because of forced arbitration, and thus the system has failed me.”
The Labor subcommittee also heard testimony from empirical researcher Professor Alex Colvin of Cornell University and Kalpana Kotagal of Cohen Milstein Sellers & Toll, P.L.L.C. that put in context the lie that mandatory arbitration is good for workers because the arbitral forum is always faster and more informal. Colvin noted the dramatically lower success rates that employees have in arbitration compared to state and federal court, especially when an employee in the arbitral forum for the first time is pitted against an employer who is a repeat player in the arbitration business.
Kotagal, who is also a board member of Public Justice who represents workers in both court and arbitration, explained that Perez’s situation is not unusual — that the deck is stacked against an individual employee trying to get access to information in arbitration about an employer’s systemic discriminatory practices. That’s because most forced arbitration provisions are accompanied by joint action bans that make it impossible for similar claims to be heard together and require that they be adjudicated separately. Moreover, because arbitrators’ decisions, unlike court rulings, aren’t precedential, serial arbitrations can lead to inconsistent results, making the system less fair and causing the law to atrophy as disputes get decided behind closed doors without written, reasoned opinions available to public view.
“[T]he Supreme Court has expanded the [Federal Arbitration Act’s] reach far beyond its original purpose, into state courts and cases where statutory rights are at issue, resulting in arbitration’s metastasis — to use Professor Colvin’s term,” Kotagal testified. “Today, more than half of all private-sector non-union employees are subject to forced arbitration provisions. And these provisions reach every corner of the American workforce: traditional employees and gig workers, commonly classified as ‘independent contractors,’ alike.”
“The number of employment disputes resolved in arbitration climbed by roughly 66% between 2018 and 2020,” Bloomberg Law reported after the bipartisan FAIR Act passed the House Judiciary Committee Oct. 27. “Companies closed just over 5,000 workplace arbitration cases in 2020, up from more than 3,000 cases in 2018,” according to a new American Association for Justice report. AAJ also reported: “Despite roughly 60 million workers being subject to forced arbitration provisions at their place of employment, just 82 employees won a monetary award in forced arbitration in 2020.”
Perhaps workers and consumers sign or click “Accept” because of a faint knowledge that arbitration is a long-standing practice used by unions to achieve a fair resolution through a collective bargaining agreement. As Karla Gilbride, Co-Director of Public Justice’s Access to Justice Project, noted in a blog for the Economic Policy Institute, “’Forced’ is never fair.”
“[T]he union experience shows that arbitration can be a fair process for resolving disputes — when it is actually agreed to, and engaged in, by two parties with relatively equal bargaining power. But when the only choice an employee is given is to agree to arbitrate on the employer’s terms (with no ability to join forces with other affected workers) or find another job, for most workers that is the equivalent of no choice at all,” Gilbride wrote. A “report from EPI and the Center for Popular Democracy projects that by 2024, over 80 percent of private-sector, nonunionized workers will be subject to forced arbitration regimes that ban class or collective actions.”
“Little by little, the things we worked so hard for — were taken from us,” Perez recounted at the hearing. “Our newly bought house is in foreclosure, our car was repossessed, we had to empty our 401ks, sell all my jewelry including my wedding ring, we were on food stamps, and relied on family members to help pay our electricity and water bills and things our kids needed. My kids were robbed of their mom and dad for four years. Finally, I was robbed of my dignity,” she testified.
“I’m in this fight to end forced arbitration because no one should have to go through what I went through,” Perez said. “My family’s lives were destroyed — only because I made the decision to speak up and believed the judicial system would be there to help me seek justice. Forced arbitration cannot be the ‘reset’ button for companies to escape responsibility for a wrong they have committed. It is important for workers to be able to protect their rights and have access to the civil justice system.”
Perez urged passage of the Restoring Justice for Workers Act and the Forced Arbitration Injustice Repeal Act (H.R. 1423) in order to ensure others never again endure her nightmare.
