Tagged: mandatory arbitration

“Arbitration proved to be devastating to Debbie Brenner of Peoria, Ariz., who believes she did not get a fair shake in her fraud case against a for-profit school chain that nearly left her bankrupt. In a rambling decision against Ms. Brenner that ran to 313 pages, the arbitrator mused on singing lessons, Jell-O and Botox. ‘It was a kangaroo court,’ Ms. Brenner said. ‘I can’t believe this is America.'”

Source: Michael Corkery and Jessica Silver-Greenberg. “In Arbitration, A ‘Privatization Of The Justice System.'” New York Times. November 1, 2015. http://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html.

“The consequences of arbitration clauses can be seen far beyond the financial sector. Even lawsuits that would not have been brought by a class have been forced out of the courts, according to the Times investigation. Taking Wall Street’s lead, businesses — including obstetrics practices, private schools and funeral homes — have employed arbitration clauses to shield themselves from liability, interviews and arbitration and court records show. Thousands of cases brought by single plaintiffs over fraud, wrongful death and rape are now being decided behind closed doors. And the rules of arbitration largely favor companies, which can even steer cases to friendly arbitrators, interviews and records show.”

Source: Robert Gebeloff and Jessica Silver-Greenberg. “Arbitration Everywhere, Stacking The Deck Of Justice.” New York Times. October 31, 2015. http://www.nytimes.com/2015/11/01/business/dealbook/arbitration-everywhere-stacking-the-deck-of-justice.html?_r=0.

“Individual employment arbitration exemplifies the decline of the civil jury. Companies require individuals to submit employment disputes to private judges. The Supreme Court’s seminal decision, Gilmer v. Interstate/Johnson Lane Corp., signals broad approval of this workplace dispute resolution method. The problem is that employees are pressured to waive access to a judicial forum, including a jury. A few years after Gilmer, millions of employees are now required to arbitrate. Firms embrace arbitration to lower dispute costs. But that is beginning to change as employers question its value. Key rulings make trials less expensive, while arbitrations are more costly. Remarkably, some employers are discarding arbitration to return to court, but with a condition: employees must waive access to a jury and agree to a bench trial.”

Source: Michael H. LeRoy. “Jury Revival or Jury Reviled? When Employers Are Compelled To Waive Jury Trials.” U. Pa. Journal of Labor and Employment Law. pg. 768-769. 2005.

“[A]t this point the federal policy favoring arbitration is so entrenched in the courts that a legislative solution is the only way out of the mire. Despite the shibboleth that Congress is broken, recent legislation (and an executive order) may suggest that change is on the way.”

Source: Wendi S. Lazar. Mandatory Arbitration: Searching For Fairness.  Law.com. March 5, 2015. 

“In a remarkably short period of time, the United States Supreme Court has dramatically rewritten the law governing arbitration. The Federal Arbitration Act of 1925 (FAA) permits non-judges to settle business disputes. It was passed as a reaction to many judges’ hostility toward arbitration agreements. The FAA states that arbitration agreements are ‘valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ In other words, Congress merely meant to place arbitration agreements ‘upon the same footing as other contracts.’ The underlying assumption was that these agreements would exist in negotiated contracts between parties with relatively equal bargaining power. In the 1980s, however, the Supreme Court began radically expanding the scope of the arbitration law, applying it to a plethora of fine print consumer and employment contracts the FAA’s drafters never could have imagined. The drafter also intended for the statute not to apply to employment contracts, though the Supreme Court has largely ignored this exception.”

Source: Alliance for Justice. “Arbitration Activism: How the Corporate Court Helps Business Evade Our Civil Justice System.” pg. 6. 2013.

“The secret nature of arbitration is one of the reasons it is so appealing to corporations. Open court proceedings can expose corporate misconduct on the public record, keep their wrongdoing secret, and avoid emboldening other customers and workers to bring legal action. Further, secrecy exacerbates the problem of repeat player bias: without a public record, it is extremely difficult to prove that a specific firm is systemically biased in favor of corporations.”

Source: Alliance for Justice. “Arbitration Activism: How the Corporate Court Helps Business Evade Our Civil Justice System.” pg. 5. 2013.

“Businesses pick from among several major firms that provide arbitration services, such as the National Arbitration Forum (NAF). These firms collect steep fees and pay arbitrators by the hour. Because major corporations create millions of dollars in business, a firm and its arbitrators have an incentive to keep corporate clients happy or risk losing business. Stark evidence of this ‘repeat player bias’ was revealed by a study that NAF’s top arbitrators rules for businesses against consumers 93.8% of the time.”

Source: Alliance for Justice. “Arbitration Activism: How the Corporate Court Helps Business Evade Our Civil Justice System.” pg. 4. 2013.

“Given the systemic nature of racism, the courts can no longer enable employers to supersede federal, state and city civil and human rights laws by compelling future employees into ‘mandatory’ arbitration, specifically on issues of ‘discrimination.’ What incentive do these employers have to comply with the civil and human rights laws? As demonstrated by WME, there is no incentive, and until companies are held accountable for their actions, the cycle will only continue.”

Source: July 10, 2011 Letter to P. Kevin Castel Seeking An Expedited Ruling on Defendants’ Motion To Compel Arbitration.

watch Lost in the Fine Print (2014) & understand more why I am fighting against the enforceability of William Morris’ mandatory, pre-dispute arbitration agreements!!

Congress needs to pass the Arbitration Fairness Act immediately!!!