Newspapers: PRESSED FOR TIME - Mandatory arbitration clauses raise "deadline" dread
by Thomas Goetz
By publishing standards, Jan Lajoie's rise was a rapid one. In the seven years she worked at Fidelity's Mutual Fund Guide, she moved up from part-time researcher, to managing editor, to editor-in-chief, and then, at 48, to publisher. Under her watch, circulation rose by 85 percent. She even helped superstar Fidelity fund manager Peter Lynch research his best seller, One Up on Wall Street.
"I had all the prestige," Lajoie remembers, "I just didn't have the money." After three years as publisher, increasingly frustrated at not making as much as her fellows, she lobbied for a raise. Instead, Lajoie says, Fidelity hired a younger woman, and fired her.
When Lajoie filed suit for age and sex discrimination, however, Fidelity noted she had signed an employment agreement stipulating that any disputes would be settled in arbitration, not before a jury. Two court hearings later, the case is now awaiting its day before an arbitration panel in Boston. A Fidelity spokesperson says her claim has no merit. According to Lajoie's attorney, arbitration puts the former editor at a gross disadvantage, and creates an unfortunate precedent for age-discrimination claims in the media.
Across the country, discrimination claims are soaring: Last year there were 23,000 age, sex and race lawsuits in the federal courts--more than twice the 11,000 filed in 1992, according to the U.S. Courts' administrative office. Faced with the onslaught, courts are increasingly looking for ways to lessen the burden on the judicial system via so-called "alternative dispute resolution." Making it easier has been the rise of mandatory arbitration clauses in employee contracts--clauses appearing with more and more frequency in the media industry.
Mandatory arbitration is but the most dramatic development in media-industry age discrimination in recent years. In the last decade, downsizing and corporate consolidations have transformed small papers and major dailies alike. No longer, critics say, is the most valued employee the grizzled, seen-it-all newspaperman with deep sources--nowadays the nod goes to the younger personnel who bring with them a younger audience or readership. As Fox News president Van Gordon Sauter said in 1993, "journalism tends to be a young person's game. It's not something where people tend to grow old gracefully."
The stories sound all too familiar: At age 63, Galveston Daily News reporter Joel Kirkpatrick was fired for "low productivity," despite his filing nearly 1,200 stories in his last year--more than any other writer, by Kirkpatrick's count.
At 55, Ron Rapoport, an award-winning sports columnist at the Los Angeles Daily News, whose column has been syndicated by the New York Times News Service and whose commentaries run on NPR, suddenly had his column killed and was transferred to the night copy desk. "The last time I was on the copy desk, it was with No. 2 pencils and half sheets," Rapoport says. "I must have been the highest-priced copy editor in America." After nine months working copy, his Newspaper Guild grievance was settled with a severance package.
But as Lajoie's case illustrates, in today's corporatized media world, the grounds for recourse when employees are fired are narrowing. Massive damage awards in employee discrimination claims have driven employers to a new strategy: inserting clauses into contracts that call for all disputes to go to arbitration, rather than court.
"What employers want to say is that when you walk in the door, you waive the rights that federal and state courts have carefully protected," says Ellen Zucker, Lajoie's attorney. "I find it quite frightening."
Mandatory arbitration agreements are the spawn of Wall Street. With the boom in hiring during the '80s, the securities industry standardized arbitration clauses in employee contracts. Typically, they said that "any dispute, claim or controversy" between employee and employer would go to arbitration rather than court. By and large, they were just wishful thinking until 1991, when one trader's age discrimination suit wound up in front of the Supreme Court. In contrast to its historic distaste for arbitration, the court recognized the clause and ruled that arbitration would prevail. Since that decision, arbitration clauses have crossed from Wall Street to other industries, as district judges have followed the Supreme Court's lead.
The boom in arbitration comes at the same time as an explosion in employment discrimination claims. According to Walter Olson, author of The Excuse Factory: How Employment Law Is Paralyzing the American Workplace, federal age-discrimination complaints have doubled since the late '80s (some judges say one out of five cases now pending in federal court is age discrimination(Eth)related). Faced with this onslaught, business "will search desperately for an exit" such as mandatory arbitration, Olson says. "If allowed one, they'll take it in droves."
But while business may see only benefits, employment attorneys are quick to point at the risks of arbitration for workers. Employees pressing claims traditionally fare better when they can appeal to a jury's empathies rather than an arbitrator's logic. Furthermore, court procedures such as discovery are limited, Zucker argues. "How can the playing field be level?"
And while arbitration is often touted as a quick and expeditious alternative to the rigors of litigation, that's hardly the case in practice. Since the Lajoie case was ordered into arbitration 11 months ago, for instance, "we still haven't chosen the panel," says Zucker. "One of the people they suggested, it turned out, was defending his firm against its own discrimination claim at the time. Hardly an objective choice."
Meanwhile, Lajoie, now 53, has gotten out of the publishing world and taken a job as a finance manager for a Boston firm.
With their power of numbers, unions have been traditionally one of the few defenses against arbitration agreements. In the last few years the Newspaper Guild's New York office, for instance, has fought off several attempts to implement arbitration clauses into union contracts.
"There's been a growing tendency on the part of publishers to try to limit disputes to arbitration," says Guild president Barry Lipton, who counts among his members the New York Times, Newsweek, Reuters and Time Inc.
But unions have never been able to fend off corporate takeovers and layoffs, both of which have steamrolled the media industry in recent years. Indeed, with the rise of corporate media chains and ensuing staff cutbacks, the industry is better acquainted than most with age discrimination claims. "Downsizing was just a phrase to me before this," says Rapoport, now writing for the Chicago Sun-Times. "To me, age discrimination is salary discrimination: It's often a function of getting rid of people making more money. I was a victim of my own success, getting top raises regularly. They just didn't want to spend that kind of money any more."
"It makes good business sense to get rid of longtime people and get fresh blood in there," says noted employment attorney Leonard Flamm, who has taken on all three TV networks, as well as dozens of newspapers and magazines, in age-discrimination claims. "It's good business to get rid of dead wood, and there's an association between dead wood and older people. Unfortunately, while it may be good business, the law is to the contrary."
Such is Flamm's argument in a class-action suit he's now pressing against the New York Daily News. After Mort Zuckerman took over the paper in January 1993, he fired 182 Guild members--disproportionately, the union says, letting go of minorities and older employees. While Flamm has brought an age-discrimination claim against the paper, others are pressing a race-discrimination suit. Both are pending. Mark Kramer, the Daily News attorney, says the discrimination claims are groundless and the paper will "be exonerated if the case comes to trial...We hire people based upon merit. That's how the company is run."
Zuckerman, as it happens, has been at the center of another class-action age-discrimination claim: After he acquired U.S. News & World Report in 1988, he fired most of the advertising staff, claiming the magazine needed to target a younger audience. Though the case was settled out of court in 1989, it stands as a milestone because it illustrated for print journalism what had long been a tacit standard of TV journalism: looking the part.
"Can you automatically say a 45-year-old can't market to an under-30 audience?" asks Judith Vladeck, of Vladeck, Waldman, Elias & Englehard P.C., which handled the employees' case. "It's all about whether you need a young person to attract a young audience. That thinking is half-baked, in my opinion."
While Vladeck and Flamm both point to the clash between business and the law, there are ways to avoid discrimination suits other than having employees sign away their rights to sue. Most employment experts suggest businesses conduct pre(Eth)layoff studies of their needs and avoid targeting certain age groups disproportionately. Pre(Eth)layoff performance evaluations to rate employees can also provide protection against discrimination suits.
Such measures can help a media company avoid giving their competitors something to write about. But they come as little consolation to employees who feel they lost their job because time caught up with them. As Vladeck says, "If there weren't ways around age discrimination, there wouldn't be so many 45-year-olds out of work."