Press Release: Federal Judge Halts Weaponized Arbitration Proceeding Involving Employer-Driver Debt – Towards Justice
News Abuses of Corporate Power
On Friday, a federal judge in the Federal District Court for the Eastern District of New York issued a preliminary injunction halting an arbitration proceeding brought by a healthcare staffing company called Advanced Care Staffing against its former nurse from the Philippines, Benzor Shem Vidal because he left his job before the end of a three-year commitment period. The pervasive use of employer-driven debt—including predatory stay-or-pay contracts, that require workers to pay large sums if they leave their jobs before the end of contractual commitment period—have received increased scrutiny from courts and regulators, including the Federal Trade Commission, which recently proposed a rule that would ban non-compete agreements and many forms of de facto non-compete agreements, including some stay-or-pay contracts. This appears to be the first recent case, however, to address the alleged weaponization of arbitration by employers to collect on a stay-or-pay contract.
Advanced Care Staffing employs migrant nurses and staffs them in nursing homes, including in New York City. When Mr. Vidal left his job working for the company due to what he alleges were dangerous and unsafe staffing ratios that threatened his nursing license—around one nurse for every forty patients—Advanced Care Staffing weaponized the arbitration requirement in its employment contract and attempted to coerce him to return to work or face an arbitration that could bury him in $20,000 or more in damages and potentially tens of thousands in fees and arbitration costs. When Mr. Vidal declined to return to work, the company filed an arbitration against him with the American Arbitration Association.
