The unfairness of forced arbitration clauses is well-known by trial attorneys and the people they represent. Whether it’s a dispute with a credit card company or a nursing home corporation, these businesses often force arbitration on their customers or employees. And if there’s a dispute, a mandatory binding arbitration clause often means getting justice is impossible.
Last evening on National Public Radio’s "All Things Considered," they spoke with Jamie Leigh Jones, who had a harrowing experience as a private contractor in Iraq when she was raped and beaten by her coworkers. When criminal charges could not be filed, she sought to hold her employer, KBR / Halliburton, accountable for their misconduct. But a forced arbitration clause buried in her employment agreement meant she could not have a jury trial. Instead, she would have to go to arbitration, on the corporation’s own terms, for a secret, one-sided tribunal. Jamie’s appellate counsel is John Vail of the Center for Constitutional Litigation, who is challenging the forced arbitration clause.
NPR makes the case for why Congress must act on this issue. Americans every day are unknowingly signing away their legal rights just by getting a job or signing up for what appears to be a standard consumer service.
Two bills in Congress will help fix this problem. The Arbitration Fairness Act will ban pre-dispute forced arbitration clauses, so arbitration is voluntary and not mandatory. The Fairness in Nursing Home Arbitration Act specifically addresses these clauses in nursing home contracts, which too often allow neglectful or abusive facilities to escape accountability.
And Americans overwhelmingly approve of these bills and are against the use of forced arbitration. Six in 10 likely voters support the Arbitration Fairness Act – including majorities of Democrats, Republicans and Independents. And 59 percent of likely voters oppose the use of mandatory binding arbitration clauses in employment and consumer contracts. Hopefully we’ll see Congressional action on these bills in the very near future.
4 Comments
Wayne Parsons
The situations involving real people highlight the reality of forced arbitration. I hope some readers will add their stories because mandatory arbitration is a major threat to consumer rights and civil justice. An article that you and others may find interesting is "Fact Sheet For Arbitration Fairness Act" at http://honolulu.injuryboard.com/medical-malpractice/fact-sheet-for-arbitration-fairness-act.aspx?googleid=262040
Cindy
There is a lot of information on the site of Homeowners Against Deficient Dwellings (hadd.com)about arbitration in real estate related contracts including home warranties. Also on www.fairarbitrationnow.org read Public Citizen's report, "Home Court Advantage." Thanks for this article and for keeping this issue in the forefront.
Mike Bryant
The clauses deny justice to people all the time. These bills are very important to all consumers. Thanks for the information.
Alec
My former employer - a small division of the now infamous GE Capital - makes people sign up for their own mandatory arbitration program (they call it "Resolve") as a condition of employment. After trying to use the Resolve process to bring some issues to light in early 2008, I had experienced so much delay and unwillingness of management to even follow their own process, I gave up.
Needless to say, after having been quite critical of the process and management's approach to it, I was persona non grata. Although my performance had been exemplary for several years, and the Resolve documentation guarantees that employees will never be retaliated against in any way for using it, the company found a way to terminate me without severance and smear my character in the process.
I believe I have since proven (through documentation and a hearing conducted on 4/30/09) to the New York State Division of Human Rights that the company's reasons for my termination were based on their faulty set of assumptions that they did not even bother to investigate, and that it was most likely motivated by their disdain for my critcisms of them. I beleive also that the company has tried, ironically, to get the Division of Human Rights to direct me to use the company's Resolve process to contest my termination instead of using the Div of HR process, but I don't think their buying it.
I have not yet heard back from the Division of Human Rights, but it is my hope that they are taking this opportunity to investigate the methods by which companies are currently able to take away the rights of individuals in the workplace without any responsibility to answer to a governing body of any kind.
I do find it quite surprising that this legal loop hole has resulted in the breach of civil and human rights for so long, but I hope it's now coming to an end.
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