Forced Arbitration Stacks the Deck Against YOU!

If you haven’t heard of forced arbitration clauses, you aren’t the only one. Studies have shown that many people don’t know when they have agreed to arbitration, even though it’s a common way for companies to curb your rights.

Thousands of businesses, from credit card companies, banks and investment firms to cell phone providers, schools and nursing homes, are inserting legalese into employment contracts and service agreements called “forced,” “binding” or “mandatory arbitration.” When something goes wrong – and in some cases terribly wrong – the customer, renter, homeowner, resident, patient, employee, etc., is forced into arbitration. Many companies also use this legal sleight of hand to ban consumers from organizing into class action lawsuits, often the only practical way to hold deep-pocketed corporations accountable.

Uber and Lyft drivers failed in bid for sick leave.

Already a serious threat to civil justice before the COVID-19 pandemic, we are now seeing companies use this legal loophole to avoid responsibility for endangering workers and customers by not taking proper health precautions. Case in point: Uber and Lyft drivers tried recently to argue in court that they should be classified as employees and be eligible for sick leave due to COVID-19. Company lawyers had the case thrown out because of a forced arbitration clause in the driver employment contract. Knowing they don’t stand a chance in secretive, company-beholden arbitration hearings, drivers say the only way they can make ends meet is to continue driving, even if they are sick.

Bottom line: Forced arbitration clauses, along with legislative proposals to provide blanket immunity to company actions related to COVID-19, amount to a get-out-of-jail-free card for bad actors.

Arbitration Clauses Are Everywhere

Arbitration, which was once limited to contract disputes between businesses, now extends to legal disputes with consumers, employees, healthcare facilities and more. Companies argue that it’s a quicker, less expensive way to resolve conflicts. But there are other incentives for businesses as well. Private arbitration allows companies to hide misconduct that would otherwise be made public in court. Arbitrators are much more likely than jurors to rule in favor of employers and far less likely to give awards to workers when they find a company at fault for breaking the law.

Here are just some of the products and services sneaking forced arbitration clauses into contracts (click to read more):

Kids and Bike HelmetsMany nursing home contracts prevent patients or families from suing for abuse or neglect.

How Do We Fight Back?

Now, more than ever, it is important for Americans to recognize that forced arbitration is a serious threat to our constitutional right to a day in court. What happens if a loved one contracts COVID-19 in a nursing home because safety precautions were ignored? Or an essential worker is denied proper protective equipment? How do we hold those responsible for insufficient safety practices?

Start by reading any contracts before you sign on the dotted line. Call out this clause – often referred to as “binding mandatory arbitration,” “arbitration,” “mandatory arbitration” or even a “dispute resolution mechanism” – and try to negotiate it out of the contract. Also note that by clicking “Accept” when buying products online, you are often unwittingly agreeing to forced arbitration.

Ultimately, however, the only sure way we can trust products and services and be employed without giving up our legal rights is to pass federal legislation that bans forced arbitration. The Forced Arbitration Injustice Repeal (FAIR) Act, recently passed by the U.S. House of Representatives, seeks to end the practice of forcing consumers, employees and patients into a secretive, rigged arbitration system. Contact your senators here and make your voice heard in support of this important legislation!