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Fired Cigna employees fight forced arbitration

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In the spring of 2017, Glenda Perez and her husband Peter were both employed by the insurance giant Cigna. They were living in a newly built home in Ruskin, Florida, happily raising their three kids.

Today, they are out of work, living on food stamps, and suing their former employer in a very public battle over a tactic thousands of corporations use to tilt the scales against workers: forced employee arbitration.

Their troubles began when Glenda was fired in 2017 after, she says, her manager falsely accused her of making costly errors. When Glenda, who is Latinx, decided to bring a wrongful termination and discrimination suit against Cigna, she learned that — like 60 million other Americans— she had signed an obscure provision in her onboarding documents that forced her out of court and into a private arbitration proceeding.

But instead of the simple and fair process that arbitration promises to be, Perez saw her claim dismissed without so much as a hearing, only to later learn that her purportedly independent arbitrator was so friendly with the attorney representing Cigna that the arbitrator invited him to his 50th birthday party. Shortly after that, Cigna fired Peter as well. (He’s suing the insurance giant now, too.)

It’s a shocking story of how arbitration clauses can leave people without access to a court of law should things at their job go wrong.

There’s even a GoFundMe for the couple, complete with a video describing their plight, created by some Google employees involved in the activist group “Googlers for Ending Forced Arbitration.”

“It’s really ridiculous to say, ‘You have the right not to sign the contract.’ Usually that would mean you don’t get hired,” said Orna Artal, the co-founder Ramos & Artal LLC, an arbitration firm. “There’s something coercive in that.”

While advocates of arbitration cite advantages over litigation like faster resolutions and lower costs, Artal says that when it comes to employment disputes, the process can make justice elusive. “It’s a mixed bag,” she says. “It’s essential that anyone signing onto one of these contracts knows what they are getting themselves into.”

Employers are favored to win

Arbitration is a system in which employers are overwhelmingly favored to win the disputes they don’t choose to settle in advance.

Peter and Glenda Perez
Peter and Glenda Perez

Out of 27,000 employment arbitration cases administered in the last decade by the American Arbitration Association — one of the biggest arbitration agencies in the US — employees initiated the legal action 96 percent of the time, according to an analysis conducted for Business Insider by Level Playing Field, a non-profit organization that seeks to shed light on a the arbitration process.

Two thirds of the cases were settled from the outset, which often involves a company making a payment, even if it doesn’t admit to wrongdoing.

But of the claims that weren’t settled, and went all the way to a hearing and an award, employers won a whopping 73 percent of the time (1,064 cases out of 1,455), Level Playing Field found.

These statistics suggest why employers, who nearly always foot the bill for arbitration, prefer it to hashing out disputes in courtrooms.

What many employees don’t learn until it’s too late is that arbitrators wield immense power, and the people hired to arbitrate sometimes have deep connections to the industries that hire them. While many arbitrators are retired judges or specially trained lawyers, others are former executives in the sectors they cover or corporate attorneys who have specialized in defending employers, as the Perezes discovered. Whatever the merits of their case are, they never got a fair hearing to begin with, they say.

“When it’s behind the scenes and no one knows what the case is about, with arbitration, employers can kind of get away with murder,” Peter Perez told Business Insider.

“You get what you pay for,” Artal says. “The idea is to get a quick resolution to your dispute.”

That means that, for the most part, both parties are stuck with whatever an arbitrator decides.

There’s one big exception: If one party can show that the arbitrator may have been biased, such as by having an undisclosed relationship with the other party, the rulings can be overturned.

Which brings us back to Glenda and Peter Perez and their fight with Cigna.

Shayanne Gal/Business Insider

From ‘solid performer’ to fired

Glenda Perez was fired from Cigna in the summer of 2017, according to court documents.

She had worked for Cigna for three years as an Implementation Setup Representative, someone who helps implement insurance plans. For most of that time, Perez had been praised as a solid performer, “if not above average,” on her employee reviews, Cigna acknowledged in its arbitration documents. She had been promoted to a senior position working with big clients.

But in the spring of 2017, Glenda was blamed for making an expensive mistake. Her team was assigned a new manager who put Glenda on a “Performance Corrective Action Plan.”

Glenda’s husband Peter also worked for Cigna as a business analyst, on a team that investigated when things went wrong. He had access to reports that analyzed mistakes — and he said they showed that Glenda wasn’t to blame.

“It was a gut wrenching feeling,” Peter said. “The reports just showed something completely different.”

Beyond the mistakes, Glenda’s boss found fault with Glenda’s work ethic, complaining that Glenda was being “careless” and had an “inability to take responsibility or accountability in her job duties,” according to Cigna’s filings.

Glenda felt that her manager, who was white, was discriminating against her because she is Latinx, and filed a formal complaint with Cigna’s human resources department. The company investigated and concluded that no discrimination took place, according to arbitration records.

On July 19, 2017, Glenda left work an hour early on a Friday afternoon to attend to a family emergency and her supervisor fired her. Cigna said in the arbitration filings that the Friday time-off occurred without notice, and described it as the last straw after working with Glenda on her performance for months, including providing her with a coach.

Glenda responded with a wrongful termination lawsuit, alleging racial discrimination.

And then things got worse.

Who is this arbitrator?

The Perezes had trouble finding a lawyer to take their case because of the binding arbitration agreement, Peter said. Because arbitrators tend to hand down lower awards than juries or judges, lawyers have less incentive to take cases on contingency.

“The moment we said, ‘We have this arbitration agreement,’ they went stone cold, saying ‘We can probably get you three to six months of pay and negotiate some settlement but I don’t see much there to pursue.’ And they wanted a $3,000 retainer,” Peter said.

For a family of five that was just cut down to one income, $3,000 was a lot of money.

So they decided that Peter would represent his wife. He had studied to be a paralegal for two years, and “learned enough to know how the language of law should apply,” he said.

Going it alone turned out to be a big, rookie mistake.

There are two major institutions that provide accredited arbitrators: JAMS (formerly known as Judicial Arbitration and Mediation Services, which tends to accredit former judges and well-known attorneys) and the American Arbitration Association (which includes judges, attorneys and also accredits others, like business owners). Each of them have different fees and slightly different operational rules. There are also private practice arbitrators who don’t belong to any institution.

Cigna used the AAA and about three months after Glenda filed the claim, the organization sent Glenda a list of about 30 arbitrators to choose from, Peter said. The arbitration clause she signed gave her the option of choosing a panel of up to three arbitrators — but Cigna would only pay for one.

The arbitrators on the list charged $350-$450 an hour and other fees, including $200 an hour for travel, according to documents seen by Business Insider. The Perezes couldn’t afford to pay for two more arbitrators.

Because most arbitration cases are private, it’s not easy to research an arbitrator’s history. That’s why AAA makes potential arbitrators fill out an “oath” form where they must disclose if they’ve had prior relationships to any of the parties involved in the case.

One of the arbitrators on the list, for instance, disclosed that she was serving as an arbitrator on several cases involving Cigna’s law firm Littler Mendelson, according to documents seen by Business Insider.

“Usually at the beginning of the arbitration, the institution or the arbitrator is obligated to disclose if there’s any potential conflicts of interest,” Artal explained. “And theoretically, a party would have the right to demand to know, How many times did corporation X appear before you and how many times did you rule in favor of X? But a lot of times if an employee is coming into one of these arbitrators without legal counsel and representing themselves, you wouldn’t know that you have the right to ask those things.”

As the Perezes researched the list of 30, there was only one candidate that seemed like a viable choice: an employment attorney named Carlos Burruezo.

Carlos Burruezo
YouTube/Burruezo & Burruezo, PLLC

The Perezes didn’t fully trust some of the others because, Peter said, “They would work for employers, like they would be an HR consultant for employers.”

But Burruezo’s original disclosure form came back clean. He said he had no relationship with any of the parties involved in the case. They researched his public cases and found he had won a number of discrimination cases for employees.

“He appears to be someone who is there for community, for minorities, women’s rights,” Peter said. “As an attorney, he’s done a lot of great work.”

An amended disclosure

The Perezes chose Burruezo. And a few days later Burruezo amended his disclosure form to tell them that he did have a relationship with one of the parties. He had actually been employed by Littler Mendelson, Cigna’s law firm, for six years. Not only did he work there, he actually managed the firm’s Orlando office, the one handling Cigna’s case. Littler Mendelson is an international firm well-known for representing employers. (Business Insider is a client of Littler’s New York office for employment matters, and its standard employment contract includes an arbitration clause, though harassment, discrimination, and retaliation claims are exempted.)

Burruezo didn’t disclose this relationship on the original oath form because he wasn’t aware that Littler was involved in the case, he told Business Insider. As soon as he became aware, he disclosed it on an amended form and in follow-up emails. He also promised that his work history would not hinder his ability to be objective.

“I do not feel that my previous experience with Littler Mendelson, P.C. in any way causes me to feel any bias toward any particular party,” he wrote in his amended disclosure firm.

If Burruezo were a judge, his relationship with Littler could have been grounds for voluntary recusal from the Perezes’ case, says Stephen Gillers, a professor at NYU School of Law.

“A judge who once worked at a firm need not recuse unless the case was at the firm when the judge was there (even if the judge was unaware of it),” Gillers told Business Insider. “Many judges, however, choose not to hear cases from their former firms, even if they can, for a period of years after they take the bench.”

In gray areas, the standard is to disclose the relationship and give “the parties the opportunity to object.”

But the Perezes didn’t object. They believed Burruezo’s promises to be impartial, and they didn’t want to delay their case by going back to the drawing board and searching for a new arbitrator.

Google employees staged walkouts and other protests that eventually caused Google to end forced employee arbitration.
Troy Wolverton/Business Insider

Summary judgment

Burruezo had scheduled a hearing for the both Cigna and the Perezes to present their cases in mid-July 2018.

But just a few weeks before, on June 22, 2018, Cigna filed a motion for summary judgment, asking the arbitrator to rule in the company’s favor immediately, according to documents seen by Business Insider.

Just days before the hearing was to take place, Burruezo sided with Cigna. He didn’t believe there was enough evidence to support a claim of racial discrimination, the crux of their allegation, he wrote in the order.

The Perezes never got a hearing. They were stunned.

“We didn’t get the chance to meet him. It was all done through email and a few phone calls,” Peter said. “We read it in the kitchen. We were devastated. My wife was crying.”

Peter stayed up late that night, angry and confused. “I kept looking through the paperwork wondering, Where did we go wrong? I read thousands of cases out there. And I had this bizarre feeling — something’s not fitting well.”

He began to Google everything he could on Burruezo, clicking through page after page.

And then he found pictures of Burruezo’s 50th birthday party, taken a couple of years ago. Among them were photos of Burruezo and Jeffrey B. Jones, Cigna’s lead attorney in the Perez’s case. The men were standing arm in arm, laughing.

To Peter, the photos meant the arbitrator wasn’t just a long-ago employee of the law firm Cigna hired, but a personal friend of Cigna’s lead attorney — a social relationship he didn’t feel the arbitrator adequately disclosed.

Burruezo told Business Insider that the photo means nothing professionally.

“I have been a lawyer for more than 30 years. I have many great relationships with scores of professional colleagues and other individuals. Indeed, more than 150 individuals attended my birthday party. Mr. Jones was one of them. Our historical connection did not (nor would it) translate into bias,” Burruezo said. Jones did not respond to a request for comment.

Even so, an arbitrator with a conflict-of-interest is one of the few reasons why an arbitration case might wind up in court vacated by a judge.

So the Perezes filed the legal paperwork on those grounds, with Peter still acting as their attorney, and he hired a processor to serve those papers to Cigna.

Peter’s name was on those legal papers. About a week later, Cigna fired him “for insubordination and misconduct,” Peter said.

Apontestudios.com

Going public

Now Peter has filed his own wrongful termination lawsuit against Cigna, claiming retaliation.

“I thought I was protected from retaliation. But their attitude is, we don’t care. They know they have arbitration,” he said.

A judge has agreed to a hearing on Glenda’s case. Meanwhile, Cigna is standing firm.

“While it is our policy not to comment on an individual personnel matter publicly, we can assure you that we intend to continue to defend Cigna’s interests and have full confidence in the legal process. Ms. Perez has a copy of the arbitrator’s decision, as well as the papers Cigna filed in support of our motion for summary judgment,” a spokesperson said. “Cigna’s success is based on the talents and contributions of its 74,000 employees worldwide; when occasional differences arise, we strive to address them through fair and equitable treatment.”

Since being fired, with this lawsuit in process, Peter says he has applied for hundreds of jobs, but hasn’t been hired. But that hasn’t stopped him and Glenda from going public with their fight against forced employee arbitration.

Peter and Glenda Perez went to Washington this summer to talk to lawmakers about their experience with forced arbitration.
Peter and Glenda Perez

They aren’t alone.

In February, after multiple employee uprisings over Google’s use of arbitration to keep allegations of sexual harassment and discrimination secret, the company announced it would end all forced employee arbitration.

In May, employees at LA game maker Riot Games staged a walk out to pressure its management to end forced arbitration. They partially won that battle, with Riot agreeing to allow new employees to opt out of arbitration clauses, but not current employees.

Also in May, the US Judiciary Committee held hearings on ending forced arbitration in support of the FairAct bill.

“By burying a forced arbitration clause deep in the fine print of take-it-or-leave-it consumer and employment contracts, companies can evade the court system, where plaintiffs have far greater legal protections, and hide behind a one-sided process that is tilted in their favor,” Chairman Jerrold Nadler (D-NY) said in his opening remarks.

In July, the Perezes were invited to Washington to speak with congress people about their arbitration experiences, along with other advocates, trying to end forced arbitration.

Although the couple is still broke and fighting their case, there is a silver lining. The experience has given Peter a new career dream. He’s now determined to go to law school and become a lawyer.

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