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John Bair
John Bair
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Forced Arbitration: Did You Just Sign Away Your Rights?

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Last week, the American Association for Justice’s Women Trial Lawyers Caucus hit Capitol Hill to lobby for Bill S. 878/ H.R. 1844 , the Arbitration Fairness Act. This is a bill that affects all of us as consumers, and one that should not be overlooked. Don’t think it applies to you? If you have ever signed any of the following contracts (among others):

  • Employment
  • Credit card
  • Cell phone
  • Nursing home care

then there is an excellent chance that buried within at least one of those contracts is a forced arbitration clause. What does that mean for you? It means that you have signed away your right to bring an individual suit or participate in a class action suit against the corporation that issued the contract. Instead, should you have a disagreement with that corporation, you must enter into arbitration conducted at the discretion of the defending corporation.

The Sticking Points

Arbitration was initially intended to provide an efficient method of deciding disagreements out of court by having an unbiased arbitrator listen to both sides and make a decision that modeled what the parties might expect in court. With forced arbitration, though, it’s rarely the fair process that it was originally intended to be. Here’s the issue:

  • The corporation has the control: The corporation can determine who the arbitrator will be, what the rules of arbitration are, what the location for arbitration will be and how the arbitrator will be paid.
  • Private proceedings: Arbitration, unlike litigation, is not guided by any legal protections and is a private process. There is no requirement for an arbitrator to be trained, and there are no grounds for public review of an arbitration decision.
  • Legal protections are null: Remember the laws that protect Americans from discrimination based on sex, age, race, and disability? If the case goes to forced arbitration, those protections are non-existent.
  • Prohibitive costs: Arbitration can be a costly process for consumers; it is often expensive enough to prevent consumers from taking action.

The Arbitration Fairness Act does not ask that arbitration be done away with. Instead, it calls for a fair system in which consumers have the option to arbitrate, and that they can make that decision post-dispute.

To see the current list of sponsors in the House, visit:

http://www.govtrack.us/congress/bills/113/hr1844

To see the current list of sponsors in the Senate, visit:

http://www.govtrack.us/congress/bills/113/s878

If your representative is not listed, I strongly urge you to contact them directly or through AAJ’s Take Justice Back website.

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Related Posts:

Legislative Advocacy: A Primer

Protecting Our Rights on Election Day

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