Arbitration Clauses

It may seem like a trivial part of your terms of service for a cell phone or your retirement account: an arbitration clause. However, this forced arbitration clause is possibly the most insidious erosions of your basic constitutional rights.

Forced Arbitration Is a Violation of Your Constitutional Right to a Jury Trial

The Seventh Amendment to the US Constitution states unequivocally: “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.”

However, many contracts these days include an arbitration clause that forces you to enter arbitration rather than seek a jury trial to resolve disputes with an employer or service provider. One of the industries that uses this most commonly is the nursing home industry, in which families are told their loved one cannot receive care unless they sign the contract. With no real options, families are forced to sign away the rights of themselves and their loved one who is being put at the mercy of service providers with little incentive to provide quality care.

Remarkably, judges have upheld the legality of these contracts. A similar contract with provisions for indentured servitude or death as a penalty for violating its terms would likely be struck down, but the right to a jury trial is no less deeply enshrined in the Constitution than your right to life and liberty.

Arbitration Reduces Your Access to Fair Compensation

There are many good reasons to offer arbitration as an option: the potential for reduced costs by both sides, the ability to preserve amicability, and the potential for a speedier resolution. But what are the reasons for forced arbitration?

Forced arbitration means you have to follow their rules. This generally means that the corporation:

  • Picks the arbitrator, often from an arbitration company they have a long-term relationship with
  • Sets the ground rules for arbitration
  • Retains its own right to filing a lawsuit

In this situation, what do you think are your odds of getting a fair outcome?

Arbitration Reduces Our Ability as a Society to Check Powerful Interests

The jury trial is a powerful tool that promotes democracy and resists authority. Another reason why corporations want to avoid a jury trial is because they do not believe that a jury of average Americans—whom they do not believe are intelligent, educated, or sophisticated—has the ability or right to curb their power.

This is indicative of the contempt that they generally have for us all as consumers. We are, after all, dumb enough to buy their dangerous products in the first place.

Instead, an arbitrator is someone they have chosen, someone that they trust to make the right decision (i.e.—the decision in their favor). And if the arbitrator doesn’t make the right decision, he or she can always be replaced with one that will.

Arbitration Reduces Our Ability to Use the Courts to Expose Dangerous Secrets

Another important reason why companies choose arbitration is that everything in the arbitration can be kept secret. Many companies have been hurt when we found out what they really thought about us. Consider the outrage over Ford’s coldly calculated approach to the Pinto fuel tank, or the PR damage done by the infamous reversal of Allstate’s “Good Hands” into “Boxing gloves” to fight off claims. Arbitration is the next best thing to destroying corporate records—they can be used in arbitration without becoming part of the public record.

Unfortunately, this also means that individuals who might have suffered injury from a device or product are less likely to learn about the defect that caused their injury. They may never know they are a victim of corporate misconduct and may never get justice.

Don’t let corporations take away our constitutional rights to protect their profits and keep their dangerous secrets. Join the fight for justice today.