forced arbitration

The Growing Threat of Forced Arbitration

To protect the ability of both plaintiffs and defendants, the 7th Amendment was included in the Bill of Rights in the Constitution. This Amendment grants citizens that “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.” This means that consumers, employees, and other parties who may have a dispute have the right to pursue a claim in Court. If a person is cheated by a company, or is hurt through negligence, they have legal recourse to present their case in front of civil courts, which uphold the law and have the means to enforce their rulings.

However, an alarming trend among many companies is the practice of including forced arbitration in their contracts. Arbitration is a means of settling a dispute out of Court. Typically, both parties present their cases to an arbitrator or panel of arbitrators, who decide on the outcome. Many consumer contracts, such as those signed by customers when they sign up for services with companies like Verizon, Comcast, Ticketmaster, or Netflix, now include a clause that states that any disputes must be handled through arbitration, forfeiting the right to pursue the issue in Court, to participate in a class action suit, or to appeal any decisions. This detail is usually hidden in copious amounts of fine print, and most individuals do not even know that it’s been included.

The right to sue or pursue compensation in various situations is guaranteed through legislation such as the Credit Repair Organization Act, but the U.S. Supreme Court has already established in the 2012 case of CompuCredit v. Greenwood that this only means than an individual must have some general forum to dispute their claims, not necessarily a U.S. Court. For many companies, customers are locked in to the only form of arbitration chosen by the company.

Despite opposition from many groups, these forced arbitration clauses are finding their ways into more and more contracts, from phone service providers to employment contracts. Customers and workers are losing their rights to sue for negligence, defective products, discrimination, and abuse through signing away any recourse in the court systems.

While the effects and scope of forced arbitration continue to develop, it is imperative that each individual carefully review any contract before signing. You could be signing away more than you intended.