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What ‘Non-disparagement’ and ‘Arbitration’ Mean to Workers and Consumers

June 16, 2016
Plain English Version
Photographer: Christopher Dilts/Bloomberg via Getty Images

Photographer: Christopher Dilts/Bloomberg via Getty Images

American companies want to cut their labor costs. They also do not want customers to sue them.


When some companies lay off workers, they make them sign agreements about the company. The agreement is not to say anything bad about the company. If workers do not sign, they will not get severance pay. Most workers feel they have no choice but to sign. Companies call this a ‘non-disparagement’ agreement.

Some companies use their workers to train their replacements. Then they fire the worker. Sometimes the replacement is a foreigner who came on an H-1B visa. The visa is for foreign workers who have special skills. It is not for workers to come to America and learn new skills.

After training, the workers go back to their home countries taking the job with them. In this way, companies use outsourcing. The training is already done. This saves companies money in wages.

This is a clear misuse of H-1B visas. Companies are careful to observe the letter of the law. But the intent is to use domestic workers to train foreign workers. Fire the domestic workers and send the jobs overseas.

Some people in Congress are looking into the practice.


American companies also have a way of making sure their customers do not sue them.

When people take loans from banks or sign up for credit cards, they sign papers. In small print, the papers say the customer will not sue the company. The only recourse customers have is to go to arbitration.

Bank or credit card companies may have abusive collection or interest rate rules. In the old days, the customers could come together and file a “class action lawsuit. If the companies are in the wrong, they have to repay all the people they wronged.

Arbitration takes away this right. Cases are decided one person at a time.

Big companies and banks have all the lawyers they need. They write the rules for their benefit. Consumers and workers do not have much clout. This may be changing.

Source: The New York Times

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