Forced Arbitration

Hidden in contract boilerplate, forced arbitration agreements sign away the right to your day in court. We are becoming the arbitration nation - and giving up constitutional rights.

Forced arbitration denies your constitutional right to a trial by jury. It’s like a virus in the U.S. marketplace – hard to spot, but spreading fast. Clauses requiring consumers to take their disputes to arbitration instead of the civil justice system can be found in just about every contract a consumer signs these days – tucked stealthily into online software agreements, hidden in boilerplate cell phone and credit card deals, indecipherable in the blizzard of paperwork you sign to start a job.

Quietly, such forced arbitration clauses have put rank-and-file consumers at a disadvantage, making them surrender the right to bring their case before a judge and jury. Instead, these provisions require disputes be settled by arbitrators, who are often beholden to the wrongdoing company that hires them. Often, the arbitrator’s decision is not subject to any established rules of court or existing law and cannot be appealed for legal or factual errors.

These clauses are presented in “take-it-or- leave-it” fashion with no chance to opt out. And to actually bring their case to an arbitrator, consumers who have been harmed often have to pay fees that are  higher than the amount in dispute. Consumers are not entitled to the same discovery as they would in a courtroom. Arbitration proceedings are held behind closed doors and in secret. Bad practices are shielded from public scrutiny. Some arbitration clauses even allow the business to pick the arbitrator without any input from the consumer.

A U.S. Supreme Court ruling in 2011 condoned the practice, giving Big Business the green light to avoid accountability in class-action lawsuits when they cheat large groups of customers out of relatively small amounts each. With these provisions, consumers are left to fend for themselves in an arbitration process that is stacked against them.

In 2017 the #MeToo movement showed how forced arbitration has been used by employers and powerful men, including Donald Trump, to silence women who are sexually harassed. Even our civil rights laws are not spared from the black hole of forced arbitration.

Wells Fargo and Harvey Weinstein are poster boys for what's wrong with forced arbitration. Wells Fargo was able to use forced arbitration  provisions  in its bank and  credit card contracts to shroud for years its massive fraud against its own clients. When those clients balked, they were forced into secretive arbitration instead of a court of law, allowing Wells Fargo’s crimes to go undetected far longer than they might have otherwise. The same sort of duplicity helped Harvey Weinstein use forced arbitration and non-disclosure provisions to conceal his practice of sexual assault and harassment involving scores of Hollywood actresses for decades. With victims muzzled and lacking a fair legal outlet to challenge  Weinstein, the movie
mogul became a serial sexual predator.

Consumer attorneys believe it is important to protect the right to trial by jury as established in the Seventh Amendment to the U.S. Constitution. No corporation or individual should have free rein to deceive or harm another person with no prospect of being held accountable for their actions.

WATCH: "Lost in the Fine Print," narrated by economist Robert Reich

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