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Trump Organization employees forced to agree not to sue the company

Forced arbitration
Forced arbitration 00:40

Employees at Trump Organization properties have been told they must give up their right to sue their employer or else they will lose their jobs.  This arrangement is called a mutual arbitration agreement, and the document was obtained by CBS News.

Arbitration means that instead of going to court, employees must take any complaints to a third party arbitrator paid for by the Trump Organization to resolve disputes.  Matters before an arbitrator are secret.

Trump business empire detail 02:45

A Trump Organization spokesperson provided this statement via email to CBS News: "Because it is faster, more cost effective and tends to level the playing field, it is commonplace for large companies like The Trump Organization to use arbitration as the preferred method for resolving disputes."

The document was presented to all employees, including gardeners, housekeepers and manicurists.  The document was paired with a mandatory gag order obtained by CBS News that required all Trump employees to keep any information, pictures or opinions of the Trump family confidential.  Employees were also told that if they didn't sign the confidentiality agreement, they would lose their jobs.

The arbitration agreement states that "Arbitration is intended to provide a less time- consuming, less expensive, and less complicated means of settling disputes." Because arbitration takes place behind closed doors, the number and nature of employee complaints against the president's company will never become public.  The agreement also requires Trump employees to give up their rights to join a class action lawsuit.

"It is part of a major trend to privatize justice," said Deborah Soltis, a partner at the litigation firm Kiyonaga & Soltis who has been practicing for 25 years, "What employers have been doing for about the last 20 years is slowly taking away their employees' rights to level the playing field and go to court," Soltis told CBS News. 

Complaints that would now be secret include matters related to "unpaid compensation, missed meal or rest breaks, wrongful termination, unfair competition, discrimination, harassment, retaliation" according to the agreement.

The Trump Organization is using the arbitrator JAMS, which has arbitration centers around the country and, according to Lewis Maltby of the National Workrights Institute, JAMS is known as "reasonably fair".

It's estimated that up to 20 percent of all businesses nationwide require employees to give up the right to sue.  It's favored by some, as the Trump Organization indicated, because arbitration is cheaper for both parties, and it tends to be faster than the courts.  In recent years, decisions by the U.S. Supreme Court have supported the rights of corporations to force employees to sign arbitration agreements.

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